Santander 123 account for self-employed business account?

anonymon

I'm self employed and I've currently got a Smile personal account and a business account with The Cooperative. I'm getting next to no interest and after reading up on the current state of The Cooperative I'm thinking about switching away from them.

(What really scares me is that I have over the £85k protected in those accounts so if The Cooperative does go bust tomorrow I stand to lose almost £20k argh!)

My plan for savings is to open an ISA and savings account with NS&I as I'll get some interest and at least my money will be safe while I educate myself further.

With my personal account I'm thinking of switching to the Santander 123 account as it seems pretty hard to beat. (Apparently the customer service has improved since when I was with them a few years ago as well.)

My question is do I _need_ to have a separate business account or can I use the Santander account for everything? My business is quite simple when it comes to banking, I generally have one or two invoices being paid in each month and then I sometimes take money out when I want to spend it. (The invoices are often paid by international transfer from Europe.)

Does anyone have any idea if the Santander 123 account terms would allow this?

Many thanks, Anonymon.

grumbler

Banks don't like when personal accounts are used for business.

Re the T&C, you could have checked easily:
General Terms & Conditions

Ctrl+F, business

2.1 ...
You must not use the account for business purposes.

jonesMUFCforever

I don't think Santander will let you operate a personal account as a business one.
Then again what you tell them when doing the account opening is a different matter.

colsten

No bank will allow you to use a personal current account for business. If you choose to ignore this, you will invevitably find yourself with a closed account sooner or later.

Citing from the Santander General T&Cs for current and savings accounts, which you can find here:

2.1......You must not use the account for business purposes.

Just do you business in a business account and you will be ok. The Coop has a free business account if you can be bothered fulfilling the simple requirements.

You are right to worry about keeping more than £85K in any single financial institution. If I were you, I would move at least some of my funds pretty pronto. Though even if it wasn't for the £85K limit - why would you want to keep even a penny of your cash in the Coop? Their interest rates are amongst the bottom ones.

anonymon

colsten wrote: »

No bank will allow you to use a personal current account for business. If you choose to ignore this, you will invevitably find yourself with a closed account sooner or later.

Well the reason I ask was that on the small business page on this site (sorry it won't let me paste the link) it advises just using a personal account if you're a sole trader and the bank t&cs allow it:

"If you are a sole trader (not a limited company), then you may be able to use your normal bank account for your business, with all the better terms that involves (though check your terms & conditions - some banks won't allow this)."

colsten wrote: »

You are right to worry about keeping more than £85K in any single financial institution. If I were you, I would move at least some of my funds pretty pronto. Though even if it wasn't for the £85K limit - why would you want to keep even a penny of your cash in the Coop? Their interest rates are amongst the bottom ones.

Well originally I had switched to Cooperative because I was annoyed by poor customer service and I wanted to bank with someone more ethical. At the time I did not have much money at all past my monthly outgoings.

This has now changed obviously and I've been putting off sorting it out. Finally summoned the courage to look at it all over the last few weeks and realised how stupid my current situation is! I'm getting 0.12% interest on my business account and 0 on my personal. Neither have good online banking and the future of The Cooperative does not look rosey (or very ethical for that matter.)

I am in the process of opening an ISA with NS&I but I think it's going to be early next year before it completes (I'm waiting for the confirmation / identity checking stuff in the post.) I don't have another non-cooperative account to put money into in the mean time... hope they don't go bust argh!