Business and personal accounts with the same bank?

bpk101

Hi,

I have a business account with Starling and i was looking to open a personal account with them too, along with a joint account for my OH and I.

Is having the 3 accounts with the same bank a good idea or could i run into potential conflicts i.e. security issue with one locking me out of the other two, insufficient funds in one automatically pulling funds across from another without my consent etc.

Any thoughts?

Ebe_Scrooge

There won't be any issues - each account is its own separate entity.  The bank can't transfer money from one account to another of their own volition.  I've got a business account, a joint current account, a savings account and 3 kids' accounts all with the same bank, never had any problems at all.

bpk101

Ebe_Scrooge said:

There won't be any issues - each account is its own separate entity.  The bank can't transfer money from one account to another of their own volition. 

That's what i was expecting, although someone's comment on another site made me question it.

Is there any chance that Starling could operate differently in this regard or is this general banking practice to treat accounts as separate entities regardless of them having the same name attached to it?

Not that i'm expecting any problems, but on the off-chance a direct debit did bounce for some reason i'd be upset if it had an impact on a joint family account for example. Would be good to know before choosing who to open the account with. 

Ebe_Scrooge

You'll be fine.  A bank can use what's called a "right of offset" if you're in debt to them ( as explained here: https://www.stepchange.org/debt-info/debt-collection/right-of-offset.aspx ).  However, this would only be used in extreme circumstances - a one-off missed DD due to insufficient funds or similar would be no problem.  Well, obviously you'd have to sort out the missed payment with the payee, but you know what I mean

eskbanker

They have the same setoff terms that most banks do:

https://www.starlingbank.com/docs/legal/account/Current-Account-Terms-and-Conditions-General-Part.pdf

Set Off

If you are in arrears or owe us any money for any reason, we may set off amounts you hold with us in any Account against the amounts you owe us. This means there will be less funds available for you in your Accounts. We will only exercise this right where we consider it is reasonable to do so and, where practicable, once we have given you notice in advance.

Such terms wouldn't typically be activated simply from a bounced DD but having multiple accounts with the same bank definitely does open you up to the possibility of money being set off, so if you're keen to avoid that then use different banks.

I don't know if it's been reported that Starling freeze multiple accounts in the event of investigations, but certainly some banks do this, so given the large number of banks out there, putting all your eggs in one basket seems an avoidable risk....

General_Grant

For an account which is on-line only, I don't see a problem.

For others it might mean a slight inconvenience.  I once had a business account with Lloyds and now have only personal ones (current and savings).  However, because of that business account (long since closed), I cannot close savings accounts on-line but always have to go into a branch.  I believe this is because of the "off-setting" option.  The only current account I have closed with Lloyds was via the CASS so have no idea whether that too would require a branch visit if not via the CASS.

cx6

My advice would be to keep your personal and business accounts at different banks. This would be particularly true if you are having an overdraft on the business account.

Other may feel that is being too cautious.

Daliah

I am quite a Starling fan but I still wouldn't put all my eggs into the same basket. Every bank can get hit with problems, general or personal ones, so I like to spread my risk. There are alternatives which work similar to Starling - Monzo being one, Chase becoming another one when they finally support Direct Debits, scheduled for March (this year!). My preference of the two would be Chase, not least because of their lovely 1% cashback.

bpk101

eskbanker said:

... if you're keen to avoid that then use different banks.
... given the large number of banks out there, putting all your eggs in one basket seems an avoidable risk.

Using different banks sort of defeats the purpose of what i'm trying to achieve though i.e. a simpler system for managing my money.

Having to sign into and navigate 3 different app interfaces that all do sort of the same thing but in annoyingly very different ways will be such a time and energy zapper.

eskbanker

bpk101 said:

eskbanker said:

... if you're keen to avoid that then use different banks.
... given the large number of banks out there, putting all your eggs in one basket seems an avoidable risk.

Using different banks sort of defeats the purpose of what i'm trying to achieve though i.e. a simpler system for managing my money.

Having to sign into and navigate 3 different app interfaces that all do sort of the same thing but in annoyingly very different ways will be such a time and energy zapper.

Entirely up to you how you prioritise features and characteristics of different ways of working, but compromises will be needed as you can't have everything, i.e. simplicity brings its own risks....

bpk101

Daliah said:

There are alternatives which work similar to Starling - Monzo being one

I already have a personal account with Monzo which i've rarely used. I did consider keeping it and making this my one personal account (which i currently use Lloyds for) thus having personal with Monzo and business with Starling. However, i find the Monzo app so much more confusing than Starling, it's just not as intuitive. 

As for a joint account, a lot of people have warned me off Monzo joint accounts as they've had nothing but problems with them. Which is why i arrived at the conclusion... Starling for everything.