FSCS protection for business accounts: the current limit

The limit is £120,000, with eligibility conditions

From 1 December 2025, the FSCS deposit protection limit is £120,000 per eligible depositor, per authorised bank, building society or credit union. This is a statutory scheme limit, not a promised account balance, return or offer from a provider. Older material referring to the previous limit should not be used for a current calculation.

Eligible businesses can receive deposit protection, but the business must fall within the scheme rules. Certain categories, including many financial firms, are excluded. A business name or registration number is not enough to resolve an unusual case. Ask the deposit taker for its depositor information sheet and exclusions list, and check the FSCS explanation for your legal form.

The authorised firm is the unit that matters on the provider side. Opening several accounts with that firm does not multiply the limit. On the customer side, the legal depositor matters. A director might manage both personal and company money through the same online banking portal, but management access does not merge two legally distinct depositors.

Record the rule your cash policy uses and when it was checked. That makes it easier for another director or bookkeeper to understand the calculation and review it after a provider merger, a business restructuring or a change in the scheme limit.

Work out who legally owns each balance

A limited company is ordinarily a separate depositor from its directors. An eligible company can have its own protection even where a director also holds personal deposits with the same authorised firm. An LLP is also treated separately from its members for this purpose. The individual still needs to aggregate their own relevant personal accounts.

A sole trader is the same legal person as the individual running the business. Eligible personal and sole trader deposits with the same authorised firm are added together. Giving the trading account a business name does not create a second depositor. Separate statements or different app logins do not change that result.

For a partnership account, the FSCS explains that the partnership's claim is treated as one claim, rather than giving each partner a separate limit for that joint business balance. Do not apply the familiar personal joint-account explanation without checking how the business account is legally held. Unusual ownership arrangements need a specific answer.

If the business holds client money, trust money or funds belonging to others, obtain advice on the relevant treatment. Do not assume ordinary company-account rules resolve beneficial ownership. Keep records that distinguish your business's own working capital from money it holds on somebody else's behalf.

Different brands can share one authorisation

Two familiar account names may be trading brands of the same authorised firm. If so, the eligible depositor's balances are combined for the limit. Conversely, membership of the same corporate group does not automatically mean two separately authorised deposit takers share one limit. Check the actual authorisation rather than inferring it from ownership or branding.

Use the FSCS bank and building society protection checker and compare the result with the information sheet supplied for the account. Record the underlying firm beside the trading name. If the two sources appear inconsistent, ask the provider to explain before relying on separate protection. Save the answer with the date of the check.

Repeat this when a provider changes its legal entity or announces a transfer or merger. Read any explanation of transitional protection in the notice; do not assume that yesterday's arrangement continues indefinitely. The terms of the change and the scheme rules determine the result.

A practical account register should have one row for each account but a second view grouping rows by authorised firm. This reveals concentrations that are hard to see in individual statements. Keep access credentials out of that register: it should explain the protection arrangement without becoming a security risk.

Savings and current accounts use the same limit

Eligible current accounts, savings accounts, notice accounts and fixed-term deposits with the same authorised firm count towards the same depositor limit. A reserve labelled VAT, payroll or future equipment does not receive a separate allowance because it has a different business purpose. Relevant accrued interest also needs to be considered when measuring the protected balance.

Do not confuse the ability to withdraw with protection against failure. A fixed-term deposit can have withdrawal restrictions while still being an eligible deposit. An instant-access payment product can be readily spendable without being a bank deposit. These are different questions and both matter for business planning.

E-money and payment balances are not covered by FSCS deposit protection simply because the firm safeguards customer money in a bank. Your contractual relationship with the payment provider is different from holding your own eligible deposit account. Read bank accounts versus e-money for the distinction.

Where an app moves money into a separate savings arrangement, establish who holds the deposit and whether deposits you hold directly with that same firm aggregate with it. Do not treat every pot in an app as a separate institution. Get the product-specific disclosure rather than making the calculation from the user interface.

Do not build company cash planning around temporary high balances

The FSCS has additional protection for certain qualifying temporary high balances arising from specified events. Its consumer explanation is centred on events such as a home sale or particular life circumstances. A large business receipt is not automatically a qualifying event merely because it will remain in the account briefly.

This guide does not work out whether an exceptional company arrangement could qualify. It therefore does not treat temporary high-balance protection as a company cash-planning allowance. Ask the FSCS about the actual circumstances if this issue is relevant, and keep the documents establishing the source and timing of the funds.

A customer deposit, seasonal trading peak or money reserved for a tax bill should be examined under the ordinary business deposit rules unless a specific additional entitlement is confirmed. Describing money as temporary in your bookkeeping does not satisfy a legal scheme condition. The source of funds and qualifying event are part of the test.

The same discipline applies to unusual account ownership. If several businesses receive money through one account, changing the description in a spreadsheet does not necessarily create separate claims. Resolve the legal position before assuming that the total is protected on behalf of several eligible depositors.

Understand payout timing and operating continuity

The FSCS aims to compensate most eligible depositors within seven working days of a deposit taker failing. More complex cases can take longer and require additional information. Treat this as the scheme's usual process, rather than a guarantee that your particular business will have usable funds on a chosen payroll date.

Keep the account holder's name, address and legal details accurate. Retain current statements and evidence of ownership, especially after changing the business structure. If an institution fails, use official FSCS information and independently verified contact routes. Be cautious about messages asking for a payment or banking credentials to release compensation.

Continuity planning addresses the gap between a protected claim and immediate access to money. Consider who can authorise essential payments, what records are available if online banking is inaccessible, and how another authorised person would contact suppliers. Any alternative account needs appropriate controls and available funds; its existence alone does not create resilience.

Include expected receipts that arrive before related costs leave the account. A project deposit or a seasonal sales period can create a concentration that is absent from the month-end balance. Use the timing in the cash forecast to prompt the review, and document the underlying authorisation checks alongside it.

What to do next

Review a full trading cycle, including tax and payroll dates, rather than using only today's balance. List every deposit, group it by eligible depositor and authorised firm, and identify any amount requiring further consideration. Discuss unusual ownership or exclusion questions with the provider and the FSCS.

• List personal deposits as well as business deposits if you are a sole trader.
• Group current, savings, notice and fixed-term accounts by authorised firm.
• Check the provider's FSCS disclosure and save the current version.
• Record peak balance dates and expected incoming receipts.
• Review access arrangements for essential payments during disruption.
• Recheck after a legal-entity change, merger or business restructuring.

Using separately authorised firms can change how the scheme limit applies, but the suitable arrangement depends on the business's operations and legal position. This guide explains the mechanics rather than prescribing a particular split. For account features and enquiry preparation, visit business banking.