Summary of how safe a business banking app is
- Check whether your app is a bank or an e-money or payment firm. The protection is different.
- A bank is covered by the FSCS up to £120,000 per person per banking licence. A limited company has its own limit.
- A sole trader's business and personal accounts at the same bank share one £120,000 limit.
- An e-money or payment firm is not covered by the FSCS. It must safeguard your money, and the FCA says you should get most of it back if the firm fails.
- In the example, a limited company with £150,000 at one licence has £30,000 unprotected. Splitting the money at two licences removes the gap.
- Check your provider on the Financial Services Register and ask where your money is held.
Many owners now bank through an app. The app looks the same whether it belongs to a bank or not, but the protection behind it is not the same. Few owners know which they have until something goes wrong.
This page names no providers, because the answer is specific to each one and can change. The amounts in the examples are made up to show the method.
What kind of provider is your business banking app?
There are two main kinds, and the app does not tell you which.
- A bank. It holds deposits and is covered by the Financial Services Compensation Scheme, known as the FSCS.
- An e-money or payment firm. It is authorised and regulated by the FCA but is not a bank. The FSCS cannot protect money held with these firms.
Some e-money firms hold customer money with a bank. FSCS says those banks might have FSCS protection, so check where your money is held. If it sits in a trust arrangement, an FSCS claim can take up to three months.
What does the FSCS cover?
From 1 December 2025 the FSCS limit is £120,000. It applies per person, per banking licence, across all the accounts you hold there and not per account. FSCS says it generally protects companies' deposits regardless of the size of the company.
| Where the money is held | FSCS protection | What to know |
|---|---|---|
| Limited company account at a bank | Up to £120,000, its own limit | Separate from personal accounts at the same bank |
| Sole trader account at a bank | Up to £120,000 combined | Shared with personal accounts at the same bank |
| Account at an e-money or payment firm | None from the FSCS | The firm must safeguard your money, which is a different protection |
| Several brands on one banking licence | One £120,000 limit between them | Check the licence on the FCA register |
| E-money firm that holds your money at a bank | May be protected, depends how it is held | Ask whether the money is in your own account or a trust arrangement |
A banking licence is not the same as a brand. FSCS gives the example of one banking group that trades under several names, all on one licence. Money spread across those brands shares one limit. Our business savings accounts article shows what the protection means for a company's reserves.
What does the limit mean in pounds?
Take a limited company with £150,000 of cash. The limit is £120,000 per banking licence.
Worked example
A limited company holds £150,000 of cash
All with one banking licence
- Balance
- £150,000
- FSCS limit
- £120,000
- Above the limit
- £30,000
£30,000 not protected
Split across two licences
- Balance at bank one
- £75,000
- Balance at bank two
- £75,000
- Above either limit
- £0
£0 not protected
£30,000 protected by splitting the money. The two banks must hold separate banking licences, not just trade under two brand names
The company with all its cash at one licence has £30,000 above the limit. Splitting the same money across two licences brings every pound inside a limit. The sole trader below has a smaller version of the same problem.
Worked example
£90,000 in a business account and £50,000 in a personal account at the same bank
Sole trader
- Business account
- £90,000
- Personal account
- £50,000
- One shared limit
- £120,000
- Above the limit
- £20,000
£20,000 not protected
Limited company
- Company account
- £90,000
- Personal account
- £50,000
- Each has its own limit
- £120,000
- Above either limit
- £0
£0 not protected
£20,000 is the gap for the sole trader. A limited company and its owner each have their own limit, and the amounts are examples
The rules differ because a sole trader and the business are the same person for this purpose, while a limited company is a separate legal entity. That is one of several reasons owners of larger balances weigh up their structure.
What happens at an e-money firm?
E-money firms are not covered by the FSCS, though they are regulated. The FCA says e-money firms and authorised payment institutions must put your money in a separate safeguarding account with a bank, or protect it with an insurance policy or similar guarantee.
If the firm fails, the FCA says you should get most of your money back. It may take some time to receive, and it may not be the full amount. You would deal with the firm's liquidator or administrator, who distributes the money. FSCS adds that your money could be tied up for a while during the insolvency process.
The FCA also says some payment providers do not have to safeguard at all. Check which type your provider is.
How do you check your own provider?
- Find the operating company name. It is in the terms and conditions, because the app may use a brand name.
- Search it on the Financial Services Register. The register shows whether the firm is authorised and what permissions it holds.
- Check whether it is a bank. The FSCS checker and the register show whether the firm takes deposits.
- Ask where your money is held. Ask whether it sits directly for you in your own account or in a trust arrangement.
- Check the banking licence behind each account. Brands on one licence share one limit.
What should an owner do this month?
- Add up the cash you hold at each provider. Include business and personal accounts.
- Work out which providers are banks. Use the register and the FSCS checker.
- Compare each balance with £120,000. Use your own structure to decide what counts together.
- Decide what to do with money above the limit. Options include a second provider on a separate banking licence.
- Check who can approve payments on each account. Our signatories article explains how.
Protection is one part of what a business account costs, and our business bank account fees article covers the rest. You can see how similar businesses near you are doing with our free competitor report, and the IQ Money calculators let you put your own figures into the sums.
Questions owners ask
Is my business money safe in a banking app?
It depends on what kind of firm provides the account. A bank is covered by the FSCS up to £120,000. An e-money or payment firm is not covered by the FSCS. It must safeguard customer money, which is a different protection.
Does the FSCS cover a limited company's bank account?
FSCS says it generally protects companies' deposits regardless of the size of the company, up to £120,000 per eligible depositor. A limited company has its own limit, separate from any personal account at the same bank.
Is a sole trader's business account protected separately from their personal account?
No. FSCS says a sole trader is not treated as a separate entity, so personal and business accounts at the same bank share one £120,000 limit.
What does safeguarding mean?
The FCA says e-money firms and authorised payment institutions must put customer money in a separate safeguarding account with a bank, or protect it with insurance or a similar guarantee. If the firm fails, you should get most of your money back, but it may take time and may not be the full amount.
How do I check whether my provider is a bank?
Search the Financial Services Register for the firm's operating company name, which is in its terms and conditions. The register shows whether it is authorised and what permissions it holds.
Do two brands from the same banking group have separate limits?
Not if they share a banking licence. FSCS says protection is up to £120,000 per person per banking licence, so brands on one licence share one limit.
What should I do if my balance is above £120,000?
Consider holding the money with providers that have separate banking licences. Splitting accounts adds admin and approvals to manage, so check who can sign off payments on each one.
Keep reading
Sources
- E-money and FSCS protection (FSCS). Why FSCS cannot protect e-money and what to check.
- Small businesses and limited companies protection (FSCS). Company deposits and the £120,000 limit.
- How do banking licences affect FSCS protection? (FSCS). One limit per banking licence.
- Deposit protection for banks and building societies (FSCS). Sole traders and limited companies.
- Using payment service providers (FCA). Safeguarding and what happens if a firm fails.
- How to check a firm is authorised (FCA). The Financial Services Register.
This article is general information for owners of UK businesses. The amounts in the examples are made up to show the method. Protection rules and limits change, and your own position depends on your provider and how your money is held. It is not tax, legal or financial advice. Speak to a qualified adviser about your own circumstances.
