A Quick Guide to Savings Accounts for Charities in 2023

As a UK-based charity, managing your finances effectively is a crucial part of how you support your cause. While donations and grants are vital to the success of your work, maintaining strong financial foundations through managed savings is also very important. Charity savings accounts provide the most secure and efficient way to grow your funds whilst adhering to financial regulations. In this article, we take a good look at charity savings accounts in the UK and provide some helpful insights to help you make informed decisions for your organisation.

Let’s get started.

What is a Charity Savings Account?

A charity savings account is a savings account designed specifically for registered charities in the UK. It serves as a secure and specialised account where charities can deposit their funds and earn interest on their savings. These accounts are typically offered by banks and building societies and are tailored to meet the unique needs of charitable organisations. One of the primary functions of a charity savings account is to provide a safe and reliable place for charities to store their funds. By keeping their money in a dedicated account, charities can separate their operational and donation funds from personal or other business finances. This separation is essential for maintaining transparency, accountability, and financial integrity, as it ensures that funds are utilised exclusively for charitable purposes.

“But Charity savings accounts offer a wide range of benefits beyond keeping your money safe.”

By depositing funds into these accounts, your charity will earn interest on these savings, making your money work harder and creating a valuable source of additional income for the organisation. Furthermore, some charity savings accounts enable you to manage your funds flexibly. You can have varying levels of access to your money, depending on the type of account you choose. Generally speaking, the longer you lock away your money, or the more notice you have to give to make a withdrawal, the higher rate of interest your savings will earn.

For example, some accounts offer instant access, allowing charities to withdraw funds whenever needed, while others may require a notice period or have fixed terms. These accounts may offer higher interest rates. The choice of account type depends on the specific financial goals and requirements of the charity.

“It is important to note that charity savings accounts are distinct from regular personal savings accounts or business accounts.”

They are specifically designed to cater to the unique regulatory and operational requirements of charities. As such, they come with additional features and benefits that are tailored to the charitable sector. These can include specialised customer support, preferential interest rates, or access to additional financial services that can aid charities in managing their finances effectively. When opening a charity savings account, it is essential to ensure that the financial institution offering the account is reputable and fully authorised by organisations including the Financial Conduct Authority (FCA).

The FCA regulates financial services in the UK and ensures that the institution operates within the established guidelines and standards.Additionally, the account should be protected by the Financial Services Compensation Scheme (FSCS), which safeguards eligible deposits up to £85,000 per person or, in the case of charities and businesses, per authorised institution. Overall, a charity savings account provides registered charities in the UK with a secure and dedicated platform to store their funds, earn interest, and effectively manage their finances.

By choosing the right type of account and partnering with a reputable deposit account provider, charities can optimise their financial resources which contributes to the long-term sustainability of their charitable activities.

Types of Charity Savings Accounts


Instant access accounts

Instant access accounts are a popular choice for charities that require flexibility and immediate access to their funds. With these accounts, charities can deposit and withdraw money as needed without any restrictions or penalties. While instant access accounts offer the convenience of being able to access funds for day-to-day expenses (or in emergency situations), they generally offer lower interest rates compared to other account types, such as fixed-term bonds and notice accounts.

Fixed-term bonds

Fixed-term bonds are savings accounts that require charities to deposit their funds for a predetermined period, typically ranging from a few months to several years. These accounts often offer higher interest rates compared to instant access accounts, making them an attractive option for charities that have surplus funds they can lock away for a specific timeframe. The longer the duration of the bond, the higher the interest rate tends to be.

Fixed-term bonds provide charities with the opportunity to earn a more substantial return on their savings as long as the funds remain untouched for the agreed-upon period.

Notice accounts

Notice accounts require charities to provide advance notice, typically between 30 and 90 days, before making a withdrawal. These charity savings accounts strike a balance between accessibility and earning potential. They usually offer more competitive interest rates and provide charities with a slightly higher return compared to instant access accounts.

Notice accounts are suitable for charities with relatively stable cash flow and those that can plan their expenses in advance. By giving notice within the required timeframe, charities can access their funds while still earning interest.

When choosing the best bank account for their savings, charities should consider their cash flow requirements, the availability of surplus funds, and the level of flexibility needed to access the money.

Some key factors to consider when selecting a type of charity savings account include:

  • Liquidity needs: If the charity requires immediate access to funds for day-to-day operations or unexpected expenses, an instant access account allows for quick and easy withdrawals. This type of account allows for quick and unrestricted withdrawals without penalties but comes with lower interest rates compared to fixed-rate bonds and notice savings accounts.
  • Financial planning: If the charity has surplus funds that it can commit for a fixed period without needing immediate access, a fixed-term bond may provide higher interest rates. However, it is crucial to carefully assess the charity’s future financial needs before committing to a fixed-rate bond.
  • Stability of cash flow: If the charity has a relatively stable cash flow and can plan its expenses in advance, a notice account can offer a balance between accessibility and earning potential. The notice period allows the charity to give advance notice of a withdrawal while still earning competitive interest rates.

It is advisable for charities to assess their financial requirements to determine the most suitable type of account that aligns with their specific goals and needs.

By understanding the features and benefits of each type of charity savings account, charities can make informed decisions to maximise the earning potential of their funds while ensuring access to the necessary resources when required.

Although this email and article may contain helpful information and tips, this is not advice. You may wish to seek advice from a financial advisor if you are unsure what’s best for your circumstances.