Opening a bank account for voluntary and community organisations : Parks Community UK

Some of the major banks and building societies offer special accounts for small voluntary and community organisations and give free banking as long as your account is in credit. The conditions and benefits vary slightly from bank to bank – the details for each are listed here.

From a recent chat (June 2020) on the @ParksCommUK Twitter account a shortlist of favoured banks emerged:

Unity Trust
CAF Bank
Monzo
Lloyds
Tide
Co-op Bank

We also list other banks for consideration in this article.

Opening an account

To open an account you can go into the local branch or ring the contact number. They will give you forms to fill in. Once this has been done and the forms returned to the bank, they will send you an account number and passbook/chequebook depending on the type of account. You can then start using the account.

Banks and building societies generally require proof that your group is a voluntary, non-profit making organisation and not a private business. This could be one of the following:

Letter from the chair and secretary of your group
Copy of the resolution passed at your first meeting authorising your group to open an account with the bank
Copy of your group’s constitution
Charity registration certificate/trust deeds (if group is a charity)

At least two people should sign each cheque that your group writes. You can have a pool of people (ideally three or four) who are named as signatories for the account, any two of whom can sign the cheque. Having a pool of people as signatories, means that the treasurer has several choices when he/she needs a signature and prevents a problem when people are ill, on holiday, etc.

Note: it is not a good idea for the treasurer to have cheques in the cheque book already signed by one of the signatories because this cancels out the reason for having two signatories in the first place.

The bank/building society will require evidence of the identity of each signatory and unless the signatory has an account with that bank already it will be necessary for them to go in person to a branch of the bank (not necessarily the one where the account has been opened), with:

Proof of identity – eg driving license, passport, child benefit book
Sometimes they require photographic evidence
Proof of address – eg utilities bill, benefit book, tax demand
The signatories should be people with good credit ratings (ie no bad debts) as the banks will often refuse to accept people as signatories that they consider a high risk, however trustworthy

Make sure you tell the bank that you are a non-profit making organisation. If you do not make this clear you will be treated as a small business and you will pay more bank charges than you need to.

Bank accounts

All the accounts listed offer ‘free banking’, ie no day to day charges, unless specified. You will still be charged for things like going overdrawn, stopping cheques, extra statements, etc.

When you are looking for information on the internet remember that most banks refer to community and voluntary organisations as ‘clubs and societies’. Accounts for these groups are usually classed as business banking.

The information sheets will be updated annually but if you want to check these in detail, the british bankers association produce comparative tables for charity and club and society accounts that are available online at www.moneyfactsonline.co.uk/mfbaf

Bank of Scotland/Halifax

Tel: 0800 587 0800 www.alliance-leicestercommercialbank.co.uk

Halifax Treasurer’s Account

Cheque account
Interest paid annually on balances of £2,500 or more
No minimum balance or initial down-payment
Unlimited deposits and withdrawals can be made at the local branch with a passbook free of charge.

Lloyds tsb

Tel: 0845 3 000 000 www.lloydstsb.co.uk

Treasurer’s Account

Cheque account
Turnover must be below £50,000 per annum
No interest paid
No initial down-payment or minimum balance
Free banking

The Co-Operative bank

Tel: 08457 212212

www.co-operativebank.co.uk

Community Directplus

All credits free of charge
All debits including standing orders and direct debits free of charge
No monthly fees
Interest paid on balances in credit
Banking by phone, internet, post or through post offices
Can apply for project funding of £500-£1000 from the customer donation fund

HSBC

Tel: 08457 404 404

www.ukbusiness.hsbc.com/hsbc/mm/business-bank-accounts

Treasurer Account

Cheque account with the ability to make and receive payments by cash, cheque or internet
Pays interest
No initial down payment or minimum balance
Turnover must be below £100,000 per annum
Free banking
Free audit letter or certificate of balance

Triodos Bank

Tel: 0500 008 720

www.triodos.co.uk

Triodos bank works specifically with “organisations and groups that create real social, environmental and cultural value”. They have a range of accounts specifically for such groups, including savings accounts.

Their current accounts provide cheque and deposit books which can be used at local royal bank of scotland branches.

Charity Current Account

No minimum opening balance
Cheque book and paying in book
Direct debits, standing orders and other automated payments
Interest on credit balances
Some charges made for day to day banking

Also available to groups which are not registered as charities but do meet the criteria listed above.

NatWest Bank

Tel: 0800 200 400

www.natwest.com

Community account

Chequebook account
No minimum balance or initial down payment
Free banking if your annual expenditure is less than £100,000
Banking by internet or local branch
You can also open a community reserve account which will pay interest.

The Nationwide Building Society

www.nationwide.co.uk

Treasurer’s trust account

Passbook not cheque account
Pays interest
An initial down-payment of £50 is required
Free banking
Cheques can be issued for you by the branch free of charge.

Unity Trust Bank

Tel: 0121 616 4101

www.unity.uk.com

This is a bank run specifically for non-profit making organisations and has a variety of current and deposit accounts available. While the rates and facilities don’t vary hugely from the high street banks and building societies, the service may be more tailored to your needs and the investment of the bank goes into more ethical areas (community development).

Ideal current account

Cheque account
Free banking but no interest paid
Turnover would be below £250k per annum
Ideal deposit account
Pays interest (tiered rates)
Instant access to funds

Note: all accounts run on postal/telephone banking but you can nominate a local high street bank and use their counter services, eg for cash withdrawals.

CAF bank – Charities Aid Foundation

Tel: 0800 954 8797

www.cafonline.org

CAF is a registered charity that provides tailor-made financial products and services exclusively for the voluntary sector. Caf bank is a subsidiary of caf (charities aid foundation).

CAFCash account