Bank accounts for third sector organisations

Selecting the most suitable bank account for a community group or charity depends on several factors, including fees, cash handling options, digital banking features, and requirements for setting up an account. This page highlights the most relevant accounts for different organisational needs while also recognising that niche options may exist and should be researched further.

Certain banks require a solicitor’s letter to confirm the legal signatories eligible to access the charity account and funds. These banks include Barclays, HSBC, CAF Bank, and Triodos Bank. Organisations should prepare the necessary documentation before applying.

When to open a bank account

Opening a new bank account can take weeks, sometimes months. A lot of funders will require you to provide your bank account details at the point of application - so plan ahead, and ensure you have an appropriate bank account, in the organisation's name, ready for when you need it. Once your governing document is in place - and assuming it grants the governors the ability to operate a bank account - you should take the necessary steps to open a bank account, based on research to ensure it is the right account for your planned needs.

Documents required to open a bank account

This will vary between banks, but the kind of documents often sought are:

• Proof of charitable status
• Company registration details
• Proof of identity and address for all trustees and those who will operate the account (e.g. passport, driving licence, utility bill, council tax bill)
• Proof of address for the last three years
• Proof of the board/committee resolution to open the bank account (which should be recorded clearly and explicitly in the minutes of the meeting)
• A copy of your governing document (e.g. constitution, articles, trust deed)
• A letter from a solicitor to confirm the legal signatories eligible to access the charity account and funds (some banks require this, not all)

In our experience, it can take several months to open a bank account, and it can speed things up if you gather all of the ID requirements for your committee/board members and have them all attend the branch at the same time, if there's a local branch for your chosen bank. Almost all banks require every member of the committee/board to be at least 18 years old.

• Confirmation from Companies House that you can use the name you have chosen (not often required, but it can be).

Multiple bank accounts

Some organisations open different accounts for different projects/purposes. This is not necessary, and can cause problems with mandates, signatories, charges and the risk of using the wrong account, to name a few. It can be appropriate to have multiple accounts for things like investments, achieving higher interest rates and so on, if you have a healthy bank balance.

Financial Management/Record-keeping

Proper financial management procedures are critical - regardless of the size of the organisation, amount of financial transactions, number of projects etc. Tracking income and expenditure and being able to fully demonstrate how money is received and spent, with paper records, receipts, statements etc. is critical, regardless of size. The management committee/board should set the rules, take key decisions and ensure these are recorded in the minutes, to demonstrate that finances are being managed properly.

This is really important - we are called into organisations where allegations of fraud, theft or misappropriation have been bandied around and people are unable to prove that there has been no wrongdoing, whether there has or not been any. Always record everything and maintain full audit trails of everything, with all decisions made and recorded properly - group chat and text messages are not great (and often not at all appropriate), e-mails are generally better (assuming all trustees/committee members/directors are included and fully involved in understanding the need, proposal and impact), minutes of meetings are ideal (you should aim for this, or ensure you are operating under a scheme of delegated authority - see below). Nobody wants to be accused of wrongdoing - ensure there are full records to prove that you have not done anything wrong, and you'll be able to have such accusations dismissed.

Scheme of delegated authority

This is a document which makes it clear who has the power to do certain things (and therefore, who hasn't). It commonly focuses on financial commitment and spend, but should cover most key decisions and limits of authority. For example, who can make a statement to the press, who can approve a purchase of more than £pound5,000 (or whatever limit is appropriate to your circumstances). This avoids doubt or confusion, and can prevent a wide range of harmful or impactful situations that we've encountered many times over the years.

Cash handling

Always maintain detailed records around how cash is handled in your organisation - who can handle it and who cannot, how, when and where, including where it must be stored and how. Nobody should take or receive cash without proper receipts. Cash should be banked, especially larger amounts - this helps with reconciliation and producing year-end accounts. Consideration needs to be given to personal safety when handling, transporting, depositing and withdrawing cash from the bank.

Process for opening a bank account

1. Identify organisational needs: consider transaction volumes, ethical banking preferences, and required banking services

2. Compare account options: use the comparison table below to identify the most suitable bank

3. Prepare documentation: gather all necessary legal and financial documents

4. Apply for the account: submit an application online or in a branch

5. Complete verification: expect ID checks and verification steps before approval

6. Set up online banking: ensure dual authorisation if required for financial oversight

Choosing a bank/bank account

There are a number of things to take into account and you should undertake your own research before deciding what is best for your needs. Our table below was produced at the end of March 2025 and was correct at the time of publication. Please do not rely entirely on the table.

If ethical considerations are important your group, Triodos, Co-operative Bank, and CAF Bank are recognised for their approach to ethical banking.

A charity account is only available to a registered charity (which includes a SCIO). If you are not a registered charity, you can only open a community bank account.

Things to consider:

• Charges for operating the account
• Additional charges for transactions (e.g., paying in cash, cheque handling)
• Free banking limits before charges apply
• Cash handling options (branch access, Post Office compatibility)
• Estimated time required to open an account
• Requirements to open an account (eligibility criteria, necessary documentation, ID checks)
• Digital banking options and associated costs
• Availability of dual authorisation for digital transactions
• Specialised charity banking services (e.g., grants management, fundraising integration)
• Ethical banking options
• Solicitor’s letter requirement

Online-only banking options

Any questions? Spot a mistake on this page? Suggestions for improvement? Any banks missing? - please do get in touch. You can e-mail [email protected] or call us during normal business hours on 0800 389 6046.

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