The Guide to Charity Bank Accounts

Whether you're setting up a new charitable organisation or managing an existing one, opening the right charity bank account is a vital step. While it may seem simple to use a personal current account for your charity's finances, doing so can lead to complications down the line. A dedicated bank account helps maintain transparency, improves financial control and ensures compliance with regulations.

In this guide, we’ll explain how to open a charity bank account, what features to look for and how to choose the best charity bank account for your needs.

What is a Charity Bank Account?

A charity bank account is specifically designed to serve the needs of charities, clubs, societies and community interest groups. Unlike standard personal or business accounts, they’re set up in the name of the charity and typically offer features tailored to non-profit organisations.

While managing charity funds through a personal account is possible, it’s not recommended. Keeping personal and charity finances separate is critical to accountability and compliance.

Why You Should Open a Charity Bank Account

There are several benefits to setting up a dedicated bank account for your charity:

• Keeps your charity's finances separate from personal income

• Offers features designed for managing donations

• Features to safeguard against misuse

• Helps build a credit history in your charity’s name

• Increases trust with donors and volunteers

Even if your charitable operations are on a small scale, opening a charity bank account early can make scaling easier in future.

What Makes the Best Charity Bank Account?

When searching for the best charity bank account, consider the following features:

• Free digital transactions without monthly fees

• Access to mobile and online banking

• Ability to accept donations via bank transfer or direct debit

• Dual authorisation controls for enhanced security

• FSCS protection to secure your funds

• Support for recurring payments and payroll management

• Dedicated customer support trained in working with charities

Some banks offer free banking for charities, which is especially useful for organisations operating on tight budgets.

Can You Use a Personal Bank Account for Charity Finances?

While using a personal account may seem more straightforward, doing so comes with risks. Your finances could take a hit if the charity faces financial issues. Additionally, it may raise concerns with the Charity Commission or HMRC.

For small charities not yet registered, a business bank account could be a better alternative than a personal one.

Opening a Charity Bank Account: What You Need

To open a charity bank account in the UK, you’ll generally need the following:

• Charity name and business address

• Names and addresses of all trustees or directors

• Annual income estimate

• Charity registration number

If your non-profit raises less than £5,000 a year, it may not be eligible for registration with the Charity Commission in England and Wales. In this case, many banks allow you to open a standard business bank account in the name of the charity.

The application process is typically straightforward and often entirely online, even with high-street banks.

Comparing Charity Bank Accounts

Choosing the right account requires more than just looking at fees. You’ll want to compare features such as:

• Online and mobile access

• Overdraft and credit facilities

• Chequebook availability

• Cash deposit options

• Customer service and support channels

It may even turn out that a business bank account meets your charity’s needs, especially if you're not yet eligible to register with the Charity Commission.

Comparison services can help you quickly review the options available across traditional high-street banks and digital providers. This way, you can find a charity-friendly business bank account that matches your organisation’s size and structure.

How to Switch Charity Bank Accounts

Switching charity bank accounts is similar to transitioning between business accounts, and often comes with the convenience of the Current Account Switch Guarantee. This makes it easier to move to a new provider without interrupting your current service or your business operations.

It’s a good idea to review your charity’s banking arrangements regularly. Even if you’re happy with your current provider, better features, lower fees or improved services could be available elsewhere.

Choosing a Charity Bank Account

Choosing the right bank account is an important, but often overlooked, aspect of managing a charity effectively. Whether you're looking for your first account or switching to a better provider, take the time to evaluate your options carefully.

A good charity bank account simplifies financial management, supports transparency and protects your organisation from financial missteps. With the right tools and support, your charity can focus on what matters most.