The Guide to Community Interest Bank Accounts

If you run a community interest company (CIC), a charity or any kind of not-for-profit group in the UK, you’ve probably been told you need a special bank account.

This guide is designed to walk you through the process in plain English. We’ll explain what a community interest bank account is, why you need one, how to open one, and what to look out for. Whether you’re just starting out or thinking of switching banks, these tips will help you on your way.

What’s a Community Interest Bank Account?

Simply put, a community interest bank account is a type of business bank account designed for organisations that exist to benefit the community rather than make a profit.

That includes:

• Community interest companies (CICs)

• Charities

• Clubs and societies

• Voluntary groups

You’ll often see these referred to as charity bank accounts or community bank accounts, but they all serve the same purpose: keeping your group’s money separate from personal finances.

You’ll usually need one of these accounts if you're applying for grants, accepting donations or paying regular bills as a group.

Why You Can’t Use a Personal Account

While it might seem less of a hassle to use your current account for your group’s finances, it’s really not a good idea. Plus, many banks won’t allow it.

A community interest company bank account not only keeps things tidy, but also gives you access to tools like:

• Online banking

• Cheque books

• Debit cards

• High-street branch access

• Mobile banking apps

Some even pay interest on your balance. However, be cautious, as these accounts often come with monthly fees attached.

Do You Have to Pay Fees?

Not always. Like with regular business accounts, some community interest bank accounts don’t charge a monthly fee. However, most banks will charge for extras like:

• Paying in cheques

• Going overdrawn

• Sending money overseas

• Setting up direct debits

The key is to carefully compare the conditions of each account. Some ‘free’ accounts may end up costing more over time, depending on how your group handles its money.

What to Look for in a Community Interest Bank Account

Every group has slightly different needs, so start by making a quick list of what your CIC or community group needs to do with its bank account.

Here are a few things to consider:

• Do you need a debit card for regular purchases?

• Would a cheque book be helpful for grant payments?

• Will you need to pay in cash or cheques regularly?

• Is online banking or an app important?

• Would you benefit from access to a local branch?

Once you know what you’re after, you can start comparing accounts side by side.

While not every comparison tool includes community-specific accounts, our service can help you compare a wide range of small business bank accounts to suit your needs.

What You Need to Open a Community Interest Bank Account

Applying for a community interest bank account isn’t quite the same as opening a personal account. You’ll need to prove your organisation is legitimate and genuinely not-for-profit.

Here’s what most banks will ask for:

• Proof you’re a community group

• Two or more signatories

• Proof of ID and address for each signatory

• Personal bank statements for verification

Make sure all your paperwork is up to date and signed. This will make the process go much smoother.

Already Got an Account? It Might Be Time to Switch

Even if you’ve already opened a community interest company bank account, it’s worth reviewing it periodically. Banks frequently update their fees and features, and switching business bank accounts is relatively easy.

Many banks offer a 7-day switching service that automatically transfers your payments and direct debits. If your current account is charging more than it should or doesn’t offer the features you need, it could be time to look elsewhere.

In Summary

Running a community interest company is all about making a difference, and the right bank account can help you achieve this without unnecessary financial strain.

Whether you’re just getting started or shopping around for a better deal, remember:

• Look for features that fit your group’s needs

• Watch out for hidden fees

• Don’t be afraid to switch

With a bit of research, finding a suitable community interest bank account doesn’t have to be complicated.