Charity banking: four areas to look at

A recent report Charity Banking Challenges has highlighted that charities continue to be frustrated by barriers to banking. This is a recurring issue for SCVO’s Information Service, where we frequently receive enquiries about difficulties opening an account, banks requiring a costly solicitor’s letter to verify the names of trustees, problems when changing signatories or payment limits, and all-round poor service and a lack of understanding of our sector from the banks. Over the last few months, a particular issue has arisen with Lloyds/Bank of Scotland removing their Treasurers Account and moving clubs/societies to a new account with a monthly charge. 

SCVO have been involved in the work with UK Finance (the membership body for the banking and finance industry), charity and community representative organisations, and UK banking providers to develop UK Finance’s Voluntary Organisation Banking Guide. But this hasn’t solved all the problems, and due to heavy regulation in the banking sector, it seems change is not going to be quick. 

We will continue to press for change, but in the meantime we think it’s best to focus on making sure that charities and voluntary organisations are as informed and prepared as possible when dealing with their bank. We’ve updated our Bank account comparison table and suggest that trustees regularly review whether their bank account is the best one for their organisation’s needs. Here are four areas to look at: 

1. Consider your needs 

• Do you need access to a local branch, or can you do all your banking online? 

• Does the account you have offer online dual authorisation? To protect against fraud, any online payments should be approved by at least two people for additional security. 

• Is ethical banking important to your organisation? Should you consider your bank’s social and environmental stance? Determining ethics can be difficult but a good place to start can be to look at your mission and then check that your bank’s practices don’t run contrary to that. 

2. Do your research 

• Banks offer different products and services, and whilst some offer free banking, if your account is in credit, many accounts have monthly charges, or a minimum amount you need to deposit to open an account.  

• Check if you could you be getting a better deal elsewhere with our Bank account comparison table where we’ve pulled together information on banks offering tailored accounts for the sector, including some smaller ones, that are not high street names. Smaller banks are worth considering, as they’re often more flexible and understanding of our sector’s needs. Some of these specialise in running accounts for community groups and charities, and they generally have an arrangement which allows you to manage your account at a high street bank.  

3. Be prepared 

• All banks need to do ID checks on trustees and signatories, and most require a copy of your constitution. A few will also require a solicitor’s letter to prove that you are who you say you are if you’re opening a new account. Banks have a legal duty to know about the people who have financial responsibility in your organisation, so be prepared that this process may take some time. 

• Check the terms and conditions of the account for example how to change a signatory if one of your trustees leaves.  

• And do your part by keeping details of signatories current and notifying your bank of any changes. 

4. Not happy? Then switch 

• If you’re not happy with your bank, then think about switching and taking your organisation’s money elsewhere. . Organisations, just like individuals, tend to stay with the bank they’ve always been with, for fear of extra work and hassle, or a dread that something will go wrong if they switch. But don’t be complacent and stick with a bank if it’s not coming up with the goods. If you have a turnover of less than £6.5 million and fewer than 50 employees you can use the free Current Account Switch Service (CASS) which will close your old account and move your money, Direct Debits and standing orders across within seven days.  

• And you can always complain if you’ve had poor service. All banks have complaints procedures and if they are not to your satisfaction you can take your concerns to the financial ombudsman. Financial Ombudsman Service: our homepage  

If you’d like to have your say about your experience of charity banking, go to the Charity Banking Survey 2025. Run by Charity Finance, the objective of this is to uncover the state of play in the charity banking market and to help you benchmark your banking services against those received by other organisations.