Can you have more than one business bank account?

If you run your own business, it makes sense to open a business bank account to keep your personal and business finances separate.

But have you ever wondered how many business bank accounts you can have? We explain all you need to know in our guide.

How many business bank accounts can a UK business have?

There’s no set rule on the number of business bank accounts a UK business can open. In theory, you can open as many as you like, as long as you meet the eligibility criteria for each account, your provider approves your application, and you pass the credit check (if applicable).

You might find that some providers have their own restrictions on the number of accounts you can hold with them. But there’s nothing to stop you from applying for multiple business bank accounts with a range of different providers.

Why would a business have multiple accounts?

There are several reasons why you might want to open more than one business bank account.

For example, you might want to separate certain expenses, keeping money for salaries, taxes and other expenses in different accounts. Alternatively, you might want to open separate accounts to trade in different currencies and reduce currency exchange fees, or to take advantage of different benefits and features, such as high interest rates, cashback on spending or invoicing tools.

Another reason for splitting balances across multiple accounts is to ensure your business doesn’t exceed the Financial Services Compensation Scheme (FSCS) limit. This protects deposits of up to £85,000 per banking group. If you hold more than £85,000 with one banking group, it’s best to deposit some of these funds into a business account with a provider from a different banking group.

Benefits of having multiple accounts

There’s a range of benefits to opening more than one business bank account:

• Better financial organisation:Opening separate business accounts can help you to set aside money for different purposes, ensuring you have sufficient funds to cover tax bills, salaries and so on.
• Access to extra perks and benefits:This can include fee-free currency transfers, cashback on spending or interest on balances.
• Enhanced fraud protection: Separating your business funds into different accounts gives you extra protection in the event that a criminal gains access to one of your accounts.
• Increased financial protection: If you have more than £85,000 with one banking group, transferring the excess into a separate bank account with a provider from another banking group ensures more of your funds are covered under the FSCS.

Downsides of having multiple accounts

As with anything, there are also drawbacks to keep in mind when opening multiple accounts:

• Can be harder to manage: Having multiple business accounts to manage and juggle can quickly get confusing.
• Additional fees: Some business bank accounts charge monthly or annual fees, so if you have more than one account, you may need to pay multiple charges.
• Impact on credit score: Opening multiple bank accounts in a short space of time can have a larger negative impact on your credit score if a credit check is carried out each time. It’s best to space out applications by at least 3 months, preferably 6.
• You might need to meet different conditions for each: In some cases, you might need to maintain a minimum balance for each account which can become difficult.

How to manage multiple business bank accounts

If you decide to open more than one business bank account, it’s important to have a plan in place for managing them. Follow the tips below to help you:

Set a purpose for each account

You might have one account for managing transactions in foreign currencies, another for collecting income, another for payroll and a fourth for paying tax bills and other expenses, for example. This can help to ensure that funds are allocated correctly.

Regularly check your accounts

It’s important to monitor your business bank accounts on a regular basis to keep an eye out for fraudulent transactions or payments that might have gone into the wrong account.

Categorise your transactions

You can use accounting software and other automation tools that help you to categorise transactions with ease, saving you time and helping you to gain a better understanding of what is being spent where.

Monitor who has access

Think about which members of your team should have access to which account. Maintain an up-to-date list of individuals and their permissions and review this access regularly.

Bottom line

Opening more than one business bank account can prove hugely beneficial for some companies, but it’s important to take steps to ensure each account is well managed and that transactions don’t get mixed up.

When comparing business accounts, consider which providers are part of which banking group, look at fees and charges, and also consider features such as access, interest rates and other perks.