When you run a not-for-profit organisation, you want as much revenue as possible to be used for the purposes of the charity, club or community — and there are bank accounts to help make that happen.
According to the Charity Commision, almost 90% of the UK’s 160,000 charities have an annual income below £500,000, and 72% are below £100,000. This means a significant amount of charities in the UK are eligible for the majority of community banks that are on the market.
Why is this such a big deal? Well, community banks generally offer many benefits and free day-to-day banking, so the not-for-profit can retain as much money as possible for its cause.
Despite its similar name, Bank of Scotland is not to be confused with The Royal Bank of Scotland (RBS), which also features on this list. Founded in 1695, Bank of Scotland is the fifth oldest bank in the UK still running today. The bank is based in Edinburgh and has been a subsidiary of Lloyds Banking Group for a little over 10 years, since Lloyds acquired HBOS.
Bank of Scotland offers those with a small, non-profit a Treasurers’ account. Bank of Scotland’s Treasurers’ account is a useful, charity-focused bank account that offers free day-to-day banking for organisations with under £50,000 in annual turnover. Customers also receive general support from the Management Team, which can save you time on administration. It’s possible to apply online or over the phone, but you will of course have to be over 18.
Note: you will be pointed to a business current account if your organisation’s turnover exceeds £50,000 per year.
Barclays is one of the largest and most influential British banks, and its history dates back to goldsmith banking in 1690. With £21 billion in annual revenue and almost 80,000 employees, you won’t be hard-pressed to find a local branch. In fact, there is a staggering 4,750+ of them dotted about in 55 countries — 1,600 of which are in the UK.
The Barclays Community Account is designed for small not-for-profit organisations. The idea is to give such charities and clubs the opportunity to put more resources into the community project, by getting free banking. Not only this, but customers will have access to Barclays’ impressive online and mobile banking infrastructure.
To be eligible, your not-for-profit organisation should have turnover under £100,000, you’ll have a valid UK mobile number and address, and have 3 or fewer officials in the organisation.
The Co-operative Bank may not quite match up to Barclays in terms of its size, but it sells itself as an ethical bank. As such, Co-Op avoids investing in companies that are involved in anything it deems unethical or dubious.
In 2013, the bank was part of a rescue plan as it struggled to meet its capital shortfall. Since, it has been trying to rebuild and restructure to become more profitable. Despite this, it remains to generously offer free banking to a wide range of not-for-profit organisations (statistically, most will qualify for an account).
In order to qualify for the Co-operative Bank’s Community Directplus account, you must be a registered charity, community interest company, co-operative or credit union with a turnover of under £1,000,000. On top of this, the organisation cannot deposit more than £100,000 in cash or deposit over 5,000 cheques (per annum).
Lloyds Banking Group was founded in 1995. Since then, it has gone on to become a major British bank and was acquired by HBOS in 2009. Lloyd’s has been a relatively consistent, steady player for customers over the years.
The Lloyds Treasurers’ account is intended for non-profit organisations such as clubs, societies, charities or churches. The account has a wide range of benefits and is perhaps one of the strongest community accounts on the market. However, there’s a key drawback: organisations must meet a very limiting cap of £50,000 annual turnover or under to be eligible.
Metro Bank is a relatively low-key bank in the UK, with only 70 branches and half a billion in revenues. Metro Bank’s core goal is not just to help individuals and businesses deliver results, but to be at the heart of the community with a strong commitment to customer service.
Metro Bank offers a Community account that is free, providing annual turnover is below a very generous £2 million. A £0.20 transaction fee occurs after the 200 free transactions is used up, so make sure to ask for an update regularly on how many free transfers remain. Unregistered charities are also eligible, but require some different documents. What’s more, the bank’s presentation cheques are a great way to express the scale of a large, impactful donation, or bring life to an event.
Royal Bank of Scotland, commonly known as just “RBS”, is a banking subsidiary of The Royal Bank of Scotland Group. Whilst there are 700 branches, these are disproportionately allocated in Scotland as opposed to being spread around the UK. This is likely because The Royal Bank of Scotland Group has other subsidiaries such as NatWest, which operates heavily in England, for example.
The company was founded in 1727, so there’s certainly a lot of business heritage there. The benefit of being one of many subsidiaries is that, although the different banks are very much seperate entities, there is potentially less friction than otherwise (i.e. if you were to switch bank between the two).
Because NatWest is a part of The Royal Bank of Scotland Group, there are very strong similarities between both of its charity bank accounts. In fact, the descriptions of the community account on both websites are almost identical. A key difference is that private business can potentially have an extra 6 months of free banking at RBS.
Reliance Bank claims to operate with a focus on customer care and to put people before profits. This is arguably part of the reason why it has very humble net income figures of just a few million.
It’s worth noting, that Reliance Bank is not a large multinational corporation like many of the others. If you’re expecting state-of-the-art online service and a mobile app, you’re better off looking elsewhere. However, if you’re looking to open a charity bank account, you are most likely going to be charity-minded. And the good news is that the profits of Reliance Bank are used for the charity work that the Salvation Army — its parent company — organises. This could be a good way to support a small, charity-focused bank as well as receive free banking services.
You can receive free banking if the following conditions apply to your organisation: under £500,000 turnover, an average balance of at least £5,000, no more than 25 entries per month and cash handled is £1,000 or less per week. This free banking offer is only guaranteed for 6 months.
Formally an investment of Lloyds Banking Group (hence the name “Lloyds TSB”), TSB now stands as an autonomous subsidiary of the large, Spanish banking group Sabadell. It has a presence in England, Scotland and Wales, with around 550 operating branches. TSB’s journey with Sabadell got off to a somewhat turbulent start when, during the data migration process, many customers lost access to online banking and were exposed to other customers’ account details. Things are looking up now, though, and TSB has returned to profit.
Despite a low £50,000 annual turnover limit for the Treasurers’ account at TSB, the benefits remain competitive. The account is intended to cut down the administration for small, not-for-profit organisations.
You may not have heard of Ulster Bank before, as it is predominantly only known in Northern Ireland and the Republic of Ireland. In fact, the company is even divided into two entities for both Northern and Republic of Ireland. Nevertheless, the bank’s accounts are however still offered throughout the UK, with UK Government Investments (UKGI) owning 62.4% of the company.
In order to be eligible for the Not for Profit account, an organisation must be either a charity, community/voluntary organisation, social enterprise, religious organisation or a community development financial institution. Unlike some of the other options, a fresh for-profit startup will not qualify. This does, however, mean there is an extra focus and intentional service designed to cater for not-for-profit organisations.
Ulster Bank offers eligible not-for-profit organisations 24 months free banking when the annual annual turnover is under £250,000. Organisations that qualify but have a turnover over this can still receive 12 months free banking, providing annual turnover is under £1 million.
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