• Visitors can check out the Forum FAQ by clicking this link. You have to register before you can post: click the REGISTER link above to proceed. To start viewing messages, select the forum that you want to visit from the selection below. View our Forum Privacy Policy.
  • Want to receive the latest contracting news and advice straight to your inbox? Sign up to the ContractorUK newsletter here. Every sign up will also be entered into a draw to WIN £100 Amazon vouchers!

FSCS - Business vs Personal bank account protection

Collapse
X
  •  
  • Filter
  • Time
  • Show
Clear All
new posts

    FSCS - Business vs Personal bank account protection

    Hi All,

    Any accountants or someone with knowledge on the below.

    Say a bank has 1 banking license for simplicity say like Al Rayan which tops charts just now for Business and personal savings - Comes under Deposit Protection FSCS.

    1. Then you open a business saving account for £85,000 under the business.

    2. You then open a personal saving account for £85,000.

    If you have both under 1 banking license, are you covered for £85,000 for both?

    If something went wrong would you get the £170,000 back as business accounts are treated different to personal bank accounts?

    I have searched web for an absolute answer but cant find anything definitive.

    #2
    Pretty sure both accounts would be protected to the same level (i.e. £85k each) as the company account is not technically yours, you are just managing it for the Ltd, so it is treated as separate from the personal account even if you access both via the same login for online banking etc.

    Don't worry, just make sure you're with a bank 'too big to fail'.
    Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

    Comment


      #3
      you do know

      Originally posted by Delboypass View Post
      Hi All,

      Any accountants or someone with knowledge on the below.

      Say a bank has 1 banking license for simplicity say like Al Rayan which tops charts just now for Business and personal savings - Comes under Deposit Protection FSCS.

      1. Then you open a business saving account for £85,000 under the business.

      2. You then open a personal saving account for £85,000.

      If you have both under 1 banking license, are you covered for £85,000 for both?

      If something went wrong would you get the £170,000 back as business accounts are treated different to personal bank accounts?

      I have searched web for an absolute answer but cant find anything definitive.

      you do know the FSCS would never really pay out in the event of a major banking fail its current funding cap is £4.03bn, RBS For example got £50Billion bailout to keep it aloft, meaning you would get £8500 of your £85000 back

      Comment


        #4
        Good point

        Yes, under certain circumstances, the Government would have to bailout and nationalise again rather than payout.

        I doubt they could let a large UK bank fail and would destroy confidence in the banking system.

        Okay - I think i am safe enough to have a personal and business bank account under same license then.

        Comment


          #5
          Isn't it more a case that the FSCS protection is the current level where you're safe from a 'haircut' or 'bail in'?

          So if/when things go pete tong again, anyone with a balance over £85k can expect to have their 'at risk' portion messed with, depending on what the government decides to do. Likely a percentage loss somewhere between 1% and 100% of the 'at risk' portion.

          The government would 'print' the rest to bail out up to £85k.
          Maybe tomorrow, I'll want to settle down. Until tomorrow, I'll just keep moving on.

          Comment


            #6
            Originally posted by Delboypass View Post
            Hi All,

            Any accountants or someone with knowledge on the below.

            Say a bank has 1 banking license for simplicity say like Al Rayan which tops charts just now for Business and personal savings - Comes under Deposit Protection FSCS.

            1. Then you open a business saving account for £85,000 under the business.

            2. You then open a personal saving account for £85,000.

            If you have both under 1 banking license, are you covered for £85,000 for both?

            If something went wrong would you get the £170,000 back as business accounts are treated different to personal bank accounts?

            I have searched web for an absolute answer but cant find anything definitive.
            The business account isn't yours. It belongs to your business, you are just nominated to manage it. So you will get compensated for your personal account and your business will get compensated for the business account. You are irrelevant in the latter. You aren't thinking like a business.

            I couldn't find much to say this either but the difference between the two accounts is pretty fundamental so not surprising there isn't any guides about something that doesn't exist.. if you get me.

            Found these links though.

            Confirms your business will get it. Answers the question assuming you and the business are completely separate entities.

            An example of the Co-op that actually do answer the question. It's right at the very bottom almost like an after thought which, I think, also speaks volumes.
            https://www.co-operativebank.co.uk/b...formybusiness?

            Bearing in mind the amounts you are talking about here it wouldn't go amiss to spend a couple of minutes asking the bank themselves.
            Last edited by Contractor UK; 13 May 2018, 16:42.
            'CUK forum personality of 2011 - Winner - Yes really!!!!

            Comment


              #7
              Originally posted by tarbera View Post
              you do know the FSCS would never really pay out in the event of a major banking fail its current funding cap is £4.03bn, RBS For example got £50Billion bailout to keep it aloft, meaning you would get £8500 of your £85000 back
              Yes it's a bit of a red herring really, like a few of the insurance services people on here use ;-)
              ⭐️ Gold Star Contractor

              Comment

              Working...
              X