Is my Money Safe? How to Protect Your Business Funds

How to protect you business and personal funds.


As your business grows, it is likely the cash you hold in your company bank account(s) will grow too.

Any cash deposited with a bank or building society authorised by the Prudential Regulation Authority, benefits from the Financial Services Compensation Scheme (FSCS). The FSCS was set up by Government, to offer some protection when financial firms fail.

What is the compensation limit?

The compensation limit is £85,000 per bank or building society. If you have money in multiple accounts with banks that are part of the same banking group (and share a banking licence), they are treated as one bank. This means that the compensation limit applies to the total amount across all these accounts, not each separate account.

If your bank balances are over £85,000 it would wise to consider opening bank accounts with different banking groups (with separate banking licenses).  This ensures you gain maximum protection. It’s also a great way to use different bank accounts for different ‘pots of money’ such as VAT/Corporation Tax/Savings etc. 

You may even want to consider splitting your cash between different banking groups, even if you hold under £85,000, as if your bank/building society did go bust - your cash may be inaccessible for a period of time.


The above also applies to personal bank accounts, so again its worthwhile checking your accounts if your personal circumstances mean that you have significant funds invested in bank/building society accounts.  The FSCS limit also doubles to £170,000 for joint accounts.

You may also get temporary protection on high balances up to £1 million. This covers life events such as selling your home, inheritances, redundancy and insurance payouts where your cash deposits may increase. You get cover on these for six months if your bank or building society goes bust.

There is more information at https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/ -on what constitutes a life event.

How do I get FSCS protection?

You do not need to do anything to get this protection, you are automatically covered. You can find out if your bank/building society is covered at https://register.fca.org.uk/s/ 

Also note that is it not only cash that is protected by the Financial Services Compensation Scheme, it can also cover things such as pensions, investments, insurance and mortgages. More information can be found on the FSCS website here. https://www.fscs.org.uk/

Interest Rates

Finally, with the recent Bank of England hikes in interest rates, now is also a great time to review what current interest rates each of your bank account pays, in case there are better rates of interest that you can attract elsewhere. You’d be amazed at some of the variations out there, so we recommend you review all your bank accounts at least every 6 months to ensure you are getting the best deals out there in the market.