Banking for a small business

Susievintage

I run a small business. At the moment I have about GBP 160,000 sitting in two business accounts in Abbey. A friend has recommended that I spread the money around in case of bank collapse - but is there any protection at all for business accounts? If not, I can see that it spreads the risk somewhat, but it wouldn't get me any actual protection (like the GBP 50,000 guarantee for personal money), would it? Would it be worth the hassle?

ccpd83

I hope it doesnt collapse.. or is in danger of doing so. Im in the middle of filling out an application to get an Abbey Busienss account. I had better do a bit of reasearch !!

nrsql

small businesses get the same protection as personal accounts - £50,000.

I have moved money over the last year to a BOS premium account, cater Allen term deposit, Close Brothers fixed term Bonds.
BOS is good as it's instant access and easy to move money. The interest rate was good but it's dropped a lot recently - think it's 1.75% which isn't that bad. You probably have a deposit account with Abbey which you would want to keep funded so this is good to quickly move money to and from your current account.

Someone posted recently about a BS business account which looked good - can't remember which one it was though.

edit
it was
http://www.harpendenbs.co.uk/business-notice.asp
Currently 3%

Susievintage

nrsql: Thank you for confirming the GBP 50,000 limit - very comforting. I shall look into the BoS account.

ccpd83: I wasn't suggesting that Abbey is in trouble - it's just that you never know these days! I have been perfectly happy with Abbey as my bank for over five years now, but I do wonder whether keeping all my money in one place is foolish - that's my only concern with them.

If any other small businesses out there are going through the same decision-making process, I'd be delighted to hear your conclusions.

nrsql

Would be sensible to move some money elsewhere even if you don't want to bring it down to 50k.
Even if Abbey don't get into trouble there may at some time be difficulty in accessing your money so having some with another institution would be useful.

I got a fair bit more interest with Investec than I could get elsewhere but since that's reduced and the differnce isn't so much now I've moved more to other institutions and now move money out as soon as it comes in. Everything goes through the investec current account to make accounting easier.

martinman3

Susievintage wrote: »

At the moment I have about GBP 160,000 sitting in two business accounts in Abbey.

I hope that most of it is in their Business Reserve as their Business Bank account pays just 0.01% on any amount.

I don't think that Abbey will go under but they are taking the p**s with their business account rates while offering new business customers significantly better deals (check it out and see). I consider that a good reason to move some of your money out.

poppysarah

I think they're all taking the P*ss. Now I can see why the preferred business model is to extract profits, spend it up a wall, and then claim money off the government for a bailout.


I have a BOS current account for day to day stuff and it's easy to transfer money into their savings account.

Mr_Maker

Susievintage wrote: »

nrsql: Thank you for confirming the GBP 50,000 limit - very comforting. I shall look into the BoS account.

ccpd83: I wasn't suggesting that Abbey is in trouble - it's just that you never know these days! I have been perfectly happy with Abbey as my bank for over five years now, but I do wonder whether keeping all my money in one place is foolish - that's my only concern with them.

If any other small businesses out there are going through the same decision-making process, I'd be delighted to hear your conclusions.

I have 40k in Close Brothers FSB Diamond account i am a small Ltd Company and not sure if the money is safe or protected, i am thinking of spreading it around but cant really find any decent rates, thought Northern Rock might be a good bet now its owned by the government, also thought i might put it in a high interest account in my own name but i am not sure the inland revenue will like that

nrsql

Close bothers is protected to 50k.
If hat's all your money the problem might be that it culd take months to access it if reying ion potection. If it's money you will never need to access quickly then that's not a problem.