Company Formation

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Choosing several business bank accounts
 

All of the main UK high street banks offer some form of business banking. The products vary and the interest rates and charges are all different. Whilst keeping all of your banking with one bank is easy is it the best thing for your new business?

Using one bank can help to streamline your finances. On the face of it placing all your business banking requirements with one organisation can make life a lot easier.
You get one set of statements
Only one bank account needs to be reconciled
You may deal with a local bank manager and have a great relationship
Online banking is easy with all your banking in one place

But is this the best way to operate your business?

There are a few simple points to consider-
The interest rates on saving may not be competitive
Not all banks charge service fees for banking
Overdraft, credit card and loan interest charges may be cheaper elsewhere
However a more important issue is whether you should keep all of your eggs in one basket? For a start the government-backed Financial Services Compensation Scheme (FSCS) only protects up to £85,000 of savings. This may seem like a high figure but if your business account reserves increase how safe is your money if its all with one bank?

Have you consider the damage to your business if through a misunderstanding, error or genuine reason a bank chose to deny access to your account. A second account with another bank would allow you to continue to receive and make payments. Do you want one bank making decisions on your company’s overdraft or ability to borrow funds.

There are many reasons to build a good working relationship with a bank but there are also serious implications if you choose not to spread your company finances across two or three different banks.

Read our Business Blog for regular updates about finance, the economy, news of interest and related stories.

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