Opening a bank account

5th April 2017, 12:57am | By Steve |

Running any group costs money and it’s a good idea to start thinking at the beginning about where to get it from and how to look after it. As soon as your group has some money, you will want to give one person responsibility for keeping track of it (the Treasurer).

Having a group bank account is the best way to make sure the group’s money is kept safely. Most high street banks offer special accounts for community groups. You will need to have at least two members of the group willing to act as signatories. Funders usually require (and it’s a sensible precaution in any case) that you have a bank account where each cheque has to be signed by two people.

Our bank accounts information sheet provides advice about choosing a bank and how to open an account. It also includes a list of community bank accounts.

For more information on looking after your group’s money, see our section on Managing Money.

Guidelines on opening an account

Opening a bank account can take several weeks, or even a few months. Be careful to fill the application form in thoroughly, and send all the information that is requested. The bank may still write to ask for further details before opening the account.

Before applying for an account, check that it:

  • Is specifically for community groups, or charities if your group is a charity. Banks usually refer to community groups as “Clubs and Societies”.
  • Not for businesses. Banks usually charge for business accounts. (Confusingly, Community accounts are usually managed by the same team in the bank as Business accounts, and will be listed on bank websites under “Business” rather than “Personal”. So you will need to go to the Business section of the website, but choose a Community or Club and Society account.)
  • Offers “free banking”. This means you won’t have to pay any charges simply for having the account. (You will probably still have to pay for things like going overdrawn, stopping cheques or requesting extra statements).

To open a Club and Society account you will be asked for proof that your group is a voluntary, non-profit-making organisation and not a private business.

This could be one of the following:

  • Copy of your group’s Constitution
  • Charity Registration confirmation / Trust deeds (if group is a charity)
  • Memorandum and Articles of Association (if the group is a limited company)

Make sure you set your account up so that at least two people are required to sign each cheque, or approve withdrawals. You can have a pool of people who are named as ‘signatories’ for the account, any two of whom can sign cheques. The signatories should be people with good credit ratings (i.e. no ‘bad debts’) as the banks will run credit checks on all the signatories. Unless they have an account with that bank already it will usually be necessary for them to go to the branch in person with:

  • Proof of identity – e.g. driving licence, passport, child benefit book
  • Proof of address – e.g. utilities bill, benefit book, tax demand
  • New applicants may also need to provide several months’ worth of personal bank statements, or other proof of their financial situation.

Most banks now offer internet banking and the use of debit cards. These are very convenient but do not generally give the security of a cheque payment that requires two signatories. Your group will need to set up an internal system to ensure the account is checked on a regular basis and that all internet and card payments have to be approved by two people. For more information on how to look after your money and keep your accounts see our information sheet on Role of the Treasurer and Financial Rules.

Choosing a bank

Most high street banks offer some kind of community group account. You may find it easiest to use the bank that you bank with personally, or one that has a branch close to you. However, bear in mind that future treasurers may live elsewhere, or bank with a different bank personally, so it’s usually best not to make this the only factor in your decision making.

It’s important to make sure the account meets your group’s particular needs. Does it provide the banking methods you want (e.g. cheque book, internet banking, phone banking, debit card?). Some groups also choose to consider whether they feel happy with the ethics of the bank they use. Move your Money provide advice about this.

As well as high street banks, there are also some smaller banks which specialise in running accounts for community groups and charities. These generally have an arrangement which allows you to manage your account at a high street bank branch, even though your account is actually with a different bank. CAF Bank, listed below, is one of these).

Bank accounts for community groups

These are some bank accounts that are available for community groups. It’s not an exhaustive list, and we are not recommending these over any others. But here is some information to get you started.

Cooperative Bank Community Directplus Account

  • Suitable for community organisations with annual income under £1 million.
  • Apply by filling in a form and posting it to them, or call them on 0800 783 4741.
  • You can manage the account over the counter at Cooperative Bank branches or any Post Office, or by phone, post or online.
  • Cheque book, paying in book and debit card provided.
  • Free banking.
  • Groups can apply for grant of £1,000.

Natwest Community Account

  • Suitable for community organisations with annual income under £100,000.
  • Apply by calling them on 0800 056 1388.
  • You can manage the account over the counter at Natwest branches, or by phone or online.
  • Cheque book, paying in book and debit card provided.
  • Free banking.

Lloyds Bank Treasurers’ Account

  • Suitable for community organisations with annual income under £50,000.
  • Apply online or call them on 0800 056 0056.
  • You can manage the account in Lloyds Bank branches, online or over the phone.
  • Cheque book, paying in book and debit card provided.
  • Free banking.

Charities Aid Foundation (CAF) Current Account

  • Suitable for registered charities.
  • Apply by filling in an initial form on their website. They will then contact you.
  • You can manage the account by phone and online. You can also pay money in and make withdrawals at HSBC branches. You can set up online banking to require “dual authorisation”, which means two people have to authorise payments.
  • Cheque book, and paying in book provided.
  • Business debit card provided.
  • Card payment facility (i.e. allows you to receive card payments).
  • Minimum initial deposit £1,000

Metro Bank Community Account

  • Suitable for community organisations with monthly income under £10,000.
  • Apply by going into your local branch
  • Call them on 0345 08 08 508 to speak to the Customer Services Team.
  • You can manage the account over the counter at Metro Bank branches or by phone or online.
  • Cheque book and paying in book provided.
  • Free banking (up to 200 transactions/month).

Royal Bank of Scotland Community Account

  • Suitable for all community organisations and charities (both registered and unregistered)
  • To apply for an account phone 0800 056 1387
  • You can manage the account over the counter at Royal Bank of Scotland branches or any Post Office.
  • Cheque book and paying in book provided.
  • Free banking (up to £100,000 per annum turnover)

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