FSCS: how much is protected in a UK business bank account?

Key takeaways

• The FSCS limit is currently £120,000 per eligible business, per authorised provider, protecting qualifying deposits if a UK-authorised bank, building society or credit union fails.

• The £120,000 limit applies across all accounts held with the same authorised firm, not to each individual account. This can also include different banking brands that share the same authorisation.

• Businesses holding more than £120,000 can spread deposits across multiple separately authorised providers to increase the total amount covered by FSCS protection, subject to eligibility.

It’s a fair question, especially when you’ve worked hard to build up a balance. The rules around deposit protection aren’t always clear, and the details can really matter. 

Having confidence in where your money sits will allow you to run the business with peace of mind.

Let’s unpack what’s covered and what to look out for. 

How much of your business deposit is FSCS protected? 

Eligible deposits are protected up to £120,000 per account holder, per authorised provider. That includes business current accounts, savings accounts and cash ISAs held with a UK authorised bank, building society or credit union. 

The limit applies across all accounts you hold with the same provider. So, if you have more than one account at a single bank, your balances are added together for Financial Services Compensation Scheme (FSCS) protection. 

In a joint account, each account holder is covered up to £120,000, which doubles the total protection to £240,000. 

If you’re managing multiple banking relationships or thinking about moving funds, it's worth checking whether your providers are considered part of the same group under FSCS rules. See our blog on how many bank accounts a UK business can have for more.

Some banks operate under a single banking licence, meaning the limit applies across brands, not just individual accounts. A quick search on the FSCS website can give you the clarity you need to make informed choices.

The eligible deposit limit increased from £85,000 to £120,000 in 2025.

Temporary high balance protection

Sometimes, your business might hold more than £120,000. For example, after selling a property or receiving an insurance payout. FSCS has a provision for this: temporary high balance protection. It can cover up to £1 million for six months in specific situations. 

These include: 

• Selling a business asset 
• Receiving an insurance policy payout 
• Being awarded compensation from a legal claim 

You don’t need to register in advance, but if you need to claim, you may be asked to provide documentation. 

It's a good idea to keep clear records of the source of any temporarily high balances – it'll make the FSCS claim process much smoother. Finance teams should log the origin and date of receipt for any balance that materially exceeds the standard £120,000 limit.

Temporary high balances can be particularly useful during major business transitions such as acquiring new premises or receiving a tax refund. In moments like these, cash flow can spike quickly. Knowing this extra layer of protection exists, means you can focus on running your business without worrying about whether that money is at risk. Heres' our blog on improving cashflow when during business transitions.

And while six months might seem like a short window, it gives you breathing space to make a plan. Just make sure you keep a clear record of where the money came from, and why it’s sitting in your account, that’ll help smooth the process if you ever need to claim. 

Which accounts and providers are FSCS protected?

FSCS protection only applies to deposits held with UK authorised institutions regulated by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

Accounts that are usually protected: 

• Business current accounts 
• Business savings accounts 
• Cash ISAs held at UK authorised providers 

Accounts and providers that aren’t covered: 

• Investment accounts
• Cryptocurrency wallets
• Insurance linked accounts 
• Friendly societies
• Electronic money firms without a banking licence

If you’re not sure whether your bank is FSCS protected, check the FSCS bank checker or the FCA register. 

Find out more on why FSCS protection is essential for your business in our article, FSCS protection: how it safeguards your business bank deposits

Common misunderstandings about FSCS protection for businesses

• "I have more than one account, so I get more protection"
  Unfortunately not. The £120,000 limit applies per person or business, per authorised firm, not per account. 
• "All banks are FSCS protected" 
  Some financial providers don’t hold the right kind of licence to offer deposit protection. Always double check before opening or funding an account. 
• "Insurance policies are included"
  Only certain general insurance claims are covered under FSCS. The insurance policy itself isn’t protected in the same way a savings account is.   
• "Challenger banks offer less protection than traditional high street banks"
  Protection is determined by FCA and PRA authorisation, not by the size or age of the bank. An authorised challenger bank offers the same FSCS protection as a large high street provider
• Ways to keep your business funds protected 
  • Split funds across different FSCS authorised banks or building societies 
  • Use the FSCS bank checker tool to verify protection status 
  • Keep track of how much you hold with each provider and review it regularly 

When you’re growing fast, it’s easy to overlook the finer details of your banking setup. But a quick review every quarter or even just once a year can make a big difference to how protected your money is. It’s also worth educating your wider finance team, so everyone involved knows what to look out for. 

If your accountant or bookkeeper manages multiple accounts, make sure they understand FSCS limits too. It’s a simple step, but it could prevent an unexpected gap in your protection if a provider fails. And if you’re unsure whether a fintech app or online account offers FSCS cover, always check – it’s not always obvious. 

Business protection doesn’t need to be complex. But it does need to be intentional. 

How to protect business deposits above the FSCS limit 

• Established businesses holding more than £120,000 in reserves can spread deposits across multiple FSCS-authorised providers. Each authorised firm provides a separate protection limit
• Verify that each provider is independently authorised, not just a different brand within the same banking group. Use the FSCS bank checker to confirm
• Businesses managing larger cash reserves may benefit from holding a mix of instant-access savings and notice accounts, allowing both protection and return optimisation
• For businesses managing surplus cash above the FSCS limit, a relationship manager can help think through appropriate account structures, depending on the business's liquidity needs and risk profile

What to look for in an FSCS-protected banking partner

Picking a bank isn’t just about the best rate. It’s about trust. A good banking partner should be FSCS protected, fully authorised by the FCA and PRA, and open about how they safeguard your money. 

At Allica Bank, we’re proud to offer FSCS protected business current and savings accounts. We work closely with growing businesses to give them the tools and confidence they need to plan for the future. 

Allica was among the voices that argued for the 2025 FSCS limit increase, which extended protection from £85,000 to £120,000 for SME depositors.

We also believe in transparency, so if you’ve ever had questions about how your deposits are protected, we’ll always give you a straight answer. No jargon. No hidden terms. Just clear guidance you can rely on. 

Final thoughts 

When it comes to protecting your business finances, small decisions can make a big difference. FSCS protection isn’t just a safety net, it’s peace of mind.  

Knowing how much of your money is covered, and by whom, helps you plan confidently and protect what you’ve worked hard to build. 

That’s why you’ll get FSCS protection and all the tools you need to grow with confidence at Allica.

Because smart businesses don’t just earn more. They protect better. 

Frequently asked questions about FSCS protection

What is the FSCS limit for UK business bank accounts?

The current FSCS limit is £120,000 per business per authorised provider.

Is my limited company eligible for FSCS protection?

Most UK-registered limited companies are eligible, provided the account is held with an FCA and PRA authorised bank, building society, or credit union in the company's name.

Does FSCS protection cover business savings accounts?

FSCS protection applies to both business current accounts and business savings accounts held with authorised providers

What happens to my business bank deposits if a bank fails?

The FSCS steps in automatically. Businesses do not need to apply for cover in advance.

Can my business hold more than £120,000 in one account?

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Disclaimer: This is information – not financial advice or recommendation

The content and materials featured in this article are for your information and education only, and are not intended to take into consideration any particular recipients’ financial situation. The product details and interest rates referred to are correct at the time of writing.

The information does not constitute financial advice or recommendation and should not be considered as such. Allica Bank will not accept any liability for any loss, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.