Investment Club Bank Account

PotentialEnergy

I'm looking to set up an investment club in the coming weeks and one of the things to consider are bank and broker accounts.
So long as we agree to not want Unit Trusts/OEICs and Foreign Shares, X-O.co.uk looks the most cost-effective broker. Do advise if you know of another that offers even better value trading.

But, what about Bank Accounts? What is on offer and is there an account offering any interest?

Thanks

grumbler

PotentialEnergy wrote: »

But, what about Bank Accounts? What is on offer and is there an account offering any interest?

• Bank Accounts

PotentialEnergy

Too many of them are personal accounts only so I was hoping someone would tell me a club account that they feel offers good value and even possibly a bit of interest because they run a club account

xylophone

http://www.tsb.co.uk/business/accounts/treasurer-account/might suit?

or http://www.santander.co.uk/uk/business/clubs-charities-accounts

or https://www.metrobankonline.co.uk/Commercial/Bank-Accounts/Community-Accounts-for-Clubs-Societies-and-Charities/

milton1970

PotentialEnergy ... I needed to open an account for the same purpose a few years ago - it was a painful process.

I would caution on thinking banks will welcome you with open arms ... We made a number of applications with banks that I have a clean history with ( my credit score is perfect) and got rejected by all following reviews.

Basically they see risk in investment clubs so reject.

Suggest that you name your club something vague and apply to banks stating that the club has a broader social purpose ... And broaden purpose of club.

Good luck!

PotentialEnergy

Our first attempt to open an account at Santander was rejected because we didn't fit the criteria of being a 'not-for-profit' club.

So, where next I ask without incurring substantial business bank account charges?

Chino

PotentialEnergy wrote: »

So, where next I ask without incurring substantial business bank account charges?

One poster in this thread (post 4862) appears to have been able to open a free community bank account with RBS for his/her investment club, but that was over a year ago:
http://boards.fool.co.uk/investment-club-bank-account-13185714.aspx?sort=whole#13186511

PotentialEnergy

Thankyou Chino - As RBS/Natwest are now threatening to charge businesses for accounts in credit I'm not very hopeful that we'd get it. But, I shall certainly note it. A Community Account at Co-op may be our next shot or an account at Metro Bank. But, I have branches of Natwest and RBS that are readily accessible so I'll drop by and ask.

PotentialEnergy

After reading ProShare suggesting Co-operative Bank and the treasurer contacting them, he was told that the free banking was only for 18 months!

Metrobank was the next attempt and they've been very helpful! It'll be easy enough for the officers to visit the local branch and open the account there and then. Various things like signed minutes/constitution are needed and probably ID stuff would be as well albeit they generally check the local council registers.

So, for investment clubs, Xylophones suggestion of Metrobank looks like it will work. As a client of Santander I'm not impressed with their stance. Of course, as base rates fall are we still going to have the free banking any longer one asks even more after today's review trying to ramp up competition but trim charges for people going overdrawn?

Anthorn

PotentialEnergy wrote: »

I'm looking to set up an investment club in the coming weeks and one of the things to consider are bank and broker accounts.
So long as we agree to not want Unit Trusts/OEICs and Foreign Shares, X-O.co.uk looks the most cost-effective broker. Do advise if you know of another that offers even better value trading.

But, what about Bank Accounts? What is on offer and is there an account offering any interest?

Thanks

I am a member of a share club which is the same thing and the club is the same as any other club. It has a chairman and a treasurer and three people who all have to sign for debits. The bank account is a club account at Natwest.

I see a problem with an initial agreement to not invest in something even if it's a type of investment such as unit trusts. Usually that's decided at the regular meetings. Making a decision on what to invest in before people join detracts from the 10 heads is better than one theory.

I don't see the problem in opening a club bank account and the chosen broker will assist with that. The problem is getting people to join in the first place and getting them to keep up with their subscriptions. Personally, I would not join a new share club without a track record and I would advise against it.

PotentialEnergy

5 of the starters were in a previous club and we happily never bought Unit Trusts/OEICs as Investment Trusts provided equivalent closed end vehicles as well as ETFs/ETCs. The previous club got to £170K but had about 18 members and over half were sleeping members. Differences between a couple of actives led to one key individual deciding to leave whilst the trouble-maker couldn't be evicted. So, dissolution was the only answer.
We did buy UK listed stock paying divies in foreign currencies and sometimes experienced foreign companies taking over UK holdings or us suddenly getting plonked with foreign shares. As auditor, I could see the headache fair and square and the nause of trivial amounts in various foreign currencies having to be listed for tax returns. I had to check things out to ensure our statements to members of their tax liabilities were correct.There was total consensus beforehand to use X-O despite the limitations.

With all respect Anthorn, if everyone followed your requirement to join a club i.e. it having a track record, there wouldn't be any clubs as nobody would start one. If there are a group of you with a seasoned track record of investing and knowing the ropes, it is worth being there at the start. If 6 of you put in 2K to begin with, there is plenty of working capital to get a less vulnerable portfolio. If that is difficult to fund, you can buy Investment Trusts to dilute risk a bit at first.