The registration catch, what you need to apply, the checks banks run, and how long it takes
Opening a charity bank account is mostly a matter of having the right documents ready and passing the bank’s checks, but there is one catch that trips people up, and it is worth knowing before you start. For most structures, the Charity Commission asks for proof of income before it will register you, and a bank often wants you registered before it will open an account. Each can seem to need the other first.
This guide walks through how to get an account open: the way around that catch, what you need to have ready, the checks a bank runs, and how long it tends to take. To compare the banks and what they charge, our charity banking guide sets out the options; this page is about getting one open.
Do you need to register before you can open an account?
The answer depends on your structure. Set up as a CIO and the catch does not arise – a CIO comes into being when the Commission registers it, and there is no income threshold to prove, so you register first and open the account afterwards. For a charitable company, trust or unincorporated association, the Commission asks for proof of at least £5,000 annual income before it registers you, and that is where the circle can form: the bank wants proof you are a charity, the Commission wants proof of income, and each seems to need the other first.
Two things break the circle. Proof of income does not have to be a bank statement – the Commission also accepts a formal funding offer from a recognised funder, or your latest approved accounts, so a new charity with a grant offer in hand may not need the account to register at all. And several banks open a community or charity account for an organisation that is not yet registered, on the strength of its governing document and trustee details – CAF Bank and Unity Trust both take unregistered charities. Open one of those, run your first income through it, and the statement becomes the proof the Commission is looking for.
What do you need to open a charity bank account?
Banks differ, but most ask for a common set of things, so it saves time to gather them before you apply. You will usually need your governing document, proof of the charity’s status, such as its registration number, where you have one; the details and identification of the trustees and any authorised signatories, with proof of address, and your expected income and how the account will be used.
Banks also want to see that opening the account was a proper decision of the board. The trustees should pass a resolution to open the account and record it in the minutes, naming the account and its signatories – a small step that banks increasingly ask to see. Some banks, Barclays and CAF among them, also ask for a solicitor’s letter confirming who the legal signatories are, so it is worth checking the requirement early rather than being held up by it late.
What checks does a bank run, and what policies might it ask about?
Before it opens an account, a bank has to satisfy itself about who you are and where your money comes from. It runs identity and anti-money-laundering checks on the charity and on the individual trustees and signatories, and usually a fraud and credit check on the organisation. How much it asks beyond that depends on the charity – its size, what it does, and where it operates. A small local group draws fewer questions than one that handles a lot of cash or works overseas.
That is also where a bank may ask about your policies. Depending on your risk profile, you might be asked to show a finance policy, an anti-fraud policy, or an anti-money-laundering policy – less as a box to tick than as evidence the trustees are managing the charity’s money responsibly. These are worth having in place regardless of the bank, since financial controls sit within the trustees’ duties, and our charity policies guide covers what each should contain.
If you would rather get the whole setup right at once – the governing document, the policies, and the account – with someone who does this regularly, book a free call, and we’ll work out where you are and what is left to do.
How do you open the account, step by step?
The process runs in a reasonable order. Choose the account first, since the right one depends on your size and how you will use it – our charity banking guide compares the banks, the fees and the eligibility rules. Gather the documents above, and pass the board resolution to open the account, minuting it. Apply next, usually online, and complete the bank’s identity and anti-money-laundering checks for each signatory. Once the account is open, set up the controls before you use it: name your signatories and turn on dual authorisation, so two people are needed to approve a payment.
How long does it take?
Plan for it to take longer than you might expect. Some accounts open in about a week – CAF Bank and Barclays both aim for around five working days once they have everything – while others run to several weeks, and Unity Trust, for one, quotes up to 35 days for most applications. What usually slows it down is missing paperwork or checks that need chasing, so having your documents, your minuted resolution, and your signatories’ identification ready before you apply is what keeps it moving. Start the account early, ideally before you need to receive money, so a slow opening does not hold up a grant or your registration.
Getting the account open
Much of what makes opening an account go smoothly is having the groundwork in place first – the governing document settled, the resolution minuted, and the signatories agreed. If you’d like help setting your charity up properly from the start, banking included, our charity setup and registration support works through it with you, from the governing document to the open account.
