Best savings accounts for charities with rates up to 5.25% (2024)

If you run a charity, you should already have a current account to help you keep your charity’s finances separate from your own.

However, it can also be worth opening a savings account to house any surplus funds.

Compare savings accounts for charities

Table: sorted by interest rate, promoted deals first

Can a charity have a savings account?

Yes, a charity can open a savings account, so long as it meets the qualifying criteria. You will usually need to show you are a UK registered charity, trust or unincorporated association and trustees and directors will usually need to be permanent UK residents too.

A number of banks offer savings accounts for charities and opening one can enable you to earn interest on any extra cash you have, helping your money to grow.

What type of savings account should a charity have?

Unlike bank accounts, your charity does not have to open a savings account. By law, any charity that receives at least £5,000 per year has to be registered with the Charity Commission, the regulator which oversees the charitable sector in the UK. All registered charities must have their own bank account. But there are no such rules for charity savings accounts.

However, it can still make good financial sense to open a savings account for your charity. The one you choose will ultimately depend on what you need it for and whether you need easy access to your cash.

You can usually choose from:

• Easy access accounts. These often only require a minimum deposit of £1 and enable you to pay in money and withdraw it whenever you like. However, interest rates are generally less competitive.
• Notice accounts. This type of account requires you to give several days’ notice before you can access your money – this could be anywhere between 30 and 120 days depending on the account. However, interest rates are generally higher than easy access accounts and you can pay in money whenever you like.
• Fixed rate bonds. This type of account requires you to lock away your cash for a set term, say anywhere between 3 months and 5 years. In return, you receive a more competitive rate of interest – the longer you lock away your money, the higher the rate will be. This is generally a better option if you have a lump sum to invest as you can’t usually add to your funds during the term, but make sure you check if there is a minimum deposit requirement as this can be a few thousand pounds.

Some charities might prefer to have a combination of accounts. For example, you could leave some money in an easy access account that you can easily get hold of to cover unexpected costs. You could then put any money you won’t need short-term access to into a fixed rate bond which will earn more interest.

Pros and cons

An overview of our savings accounts for charities comparison

Bottom line

Opening a savings account for your charity can make good financial sense if you have surplus cash as it can enable your money to grow and even help provide an income. When deciding which account is best for your charity, think about whether you will need to access the funds in the short term or if you can lock them away for a number of months or even years.

Frequently asked questions

• Yes, if the provider you've chosen has a UK banking licence, your money should be protected up to £85,000 by the Financial Services Compensation Scheme (FSCS). That said, charities do need to meet certain eligibility criteria to be able to claim compensation with the FSCS and eligibility is assessed on a case-by-case basis. But most charities are covered.

• No, as a charity you can get certain tax reliefs. This means you don't have to pay tax on most types of income, including savings interest, as long as you use the money for charitable purposes.

• You can often apply for a charity savings account online or you might be able to do so over the phone. You will usually need to provide some basic details about yourself as well as your charity name and address.