Choosing a bank for Ltd co

IronWolf

I've just set up my Ltd co and need to set up a bank account for it. I will be receiving both GBP and USD and would to hold each in the account as some of my expenses are in USD, but apart from that I'm not sure what else I should be looking out for.

Also I'm aware that any business savings aren't protected under FSCS so want to choose a bank I think is at low risk of bankruptcy.

I was thinking HSBC, anyone have any advice?

InsideInsurance

SMEs are covered by the FSCS as per http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-deposits/

Turnover: not more than £6.5 million
Balance sheet total: not more than £3.26 million
Total number of employees: not more than 50

Business banking isnt free, at least not in the long term, and suspect most people either select their personal bank as their business bank or the one with the lowest fees.

IronWolf

InsideInsurance wrote: »

SMEs are covered by the FSCS as per http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-deposits/

Turnover: not more than £6.5 million
Balance sheet total: not more than £3.26 million
Total number of employees: not more than 50

Business banking isnt free, at least not in the long term, and suspect most people either select their personal bank as their business bank or the one with the lowest fees.

Ah good to know thanks. I guess I'll just choose based on convenience and fees then.

Aquamania

There's a link in the sticky to a thread (and article) on best business accounts

IronWolf

Aquamania wrote: »

There's a link in the sticky to a thread (and article) on best business accounts

Ah yes and theres even an MSE page on it. Thanks!

Savvy_Sue

IronWolf wrote: »

Ah good to know thanks. I guess I'll just choose based on convenience and fees then.

Remember to ask specifically about $ transactions in and out, the costs might vary hugely.

TheTracker

Consider the USD question carefully, that will probably drive the choice more than anything else. And consider accepting USD through some other electronic service if possible, rather than depositing them with the bank, if that makes financial sense. That depends on the size and frequency of the deposits. You should be able to crunch some figures.

The main banks give a period of free banking for "startups" so do use that word. One bank didn't want my business (ie he wouldn't class it a startup) when the chap learnt I already had another business banking with them so I should have kept mum. Some banks also give extended service if you hold a personal account as well, eg Santander give an 18 month versus 12 month free period if you have a 123 account.

Business accounts can be a pain to set up due to the extra ID requirements. So another factor might be whether they have competitive savings accounts for reserved funds. They are even more stingy that in the personal account market for instant or notice accounts.

Finally, be careful about telling them you may have turnover of 250k+. This is shorthand for them often disqualifying you from free banking and assigning what they may call a more personal service but what I call a way to fund their staff who try to sell you more services. So if you expect 250-500 I'd be reticent to tell them 250+, and in my experience they don't chase you away if you exceed it. Every penny counts.

As other have said watch out for upsell. One bank I had used to call me any time a large deposit was made as they wanted to know what I was planning to do with it and would I like to hear more about this or that. No. Goodbye bank. I don't want my monthly fee paying for such initiatives.

Do note that you can switch business current accounts these days provided you're under £2m revenue.

Savvy_Sue

TheTracker wrote: »

Consider the USD question carefully, that will probably drive the choice more than anything else. And consider accepting USD through some other electronic service if possible, rather than depositing them with the bank, if that makes financial sense. That depends on the size and frequency of the deposits. You should be able to crunch some figures.

Can I just ask what the other possibilities for a Ltd Co accepting US$ deposits might be? DS1 has a small Ltd with occasional (but hopefully more frequent) US$ payments for his games going into a NatWest a/c and if there's an easy way for more of it to reach him and his collaborators he ought to be happy!

CKhalvashi

HSBC is the bank I'd first turn to, as the international payments out are very cheap compared to other banks.

For inward payments, we are using individually negotiated charges, so I can't remember off hand what the original cost was before this.

It, like many other things banking, is going to be a case of shopping around for the best deal.

missile

Most banks will offer you free banking for 12 months


As far as I know, RBS business banking direct is the only current account which offers>
Free banking is offered indefinitely

The charges for the day to day running of your account (known as a "service" charge) will not apply. However, charges for "unarranged borrowing & "additional services" are not part of the free banking offer.


NOTE; you would be charged for additional services e.g. USD transactions.

TheTracker

Savvy_Sue wrote: »

Can I just ask what the other possibilities for a Ltd Co accepting US$ deposits might be? DS1 has a small Ltd with occasional (but hopefully more frequent) US$ payments for his games going into a NatWest a/c and if there's an easy way for more of it to reach him and his collaborators he ought to be happy!

Eg fastspring, stripe, paypal. You'll pay a few % fee. If "games" means web savvy, he can whip up a Stripe payment in no time. For larger values a USD account in UK, or even in US. Or even Bitcoin, with very little or no fee, but low penetration and high volatility. Wish there were better options...