I have seen some posts regarding bank accounts in various threads and thought i would start a topic to get all the info together.

I, like any others, need to sort out an account!


I have been told, by two business sources (1. ex bank manager who has worked for several companies 2. Buisness Advisor for the Government), that most personal accounts have in the terms and conditions which prohibit you from using your personal account for business. I have spoken to my building society as a 'mystery shopper' and they confirmed it. With that in mind I need to sort out an account.


So, I have so far been paid in cash and cheques and see this continuing.

1) Which bank or building society are you with for business?
2) What are the charges for depositing cash or cheques?
3) What are the charges and what are the charges for writing cheques/ taking out cash?
4) Do you have a card that you can use for purchases (say for petrol or music) and do they charge you for that?
5) Do you get any interest on the money in the account (I know I ask for a lot!)?


There are a few questions but any advice (even if it is XX are rubbish and lost my money!) is appreciated. I am off to go round all the banks later. What fun!

Thanks everyone!

I opened an account with HSBC at the beginning of the year and it is a really good service. To be honest, I'm not sure of all the ins and outs (bad I know!) but what I do know is:

1) Which bank or building society are you with for business? - HSBC
2) What are the charges for depositing cash or cheques? - zero (as long as they are below a certain amount - something like £50,000)
3) What are the charges and what are the charges for writing cheques/ taking out cash? - zero (as long as they are below a certain amount - something like £50,000)
4) Do you have a card that you can use for purchases (say for petrol or music) and do they charge you for that? - you get one after 3 months (trial period)
5) Do you get any interest on the money in the account (I know I ask for a lot!)? - not sure

Also - for people who are new in business or this is their first business account, you get an 18 month period without paying the monthly amount.

They also give you quite a bit of advice (if you want it/ask for it) on running business finances - which really helped me as I was clueless to begin with! You get assigned a personal business banking consultant as well.

HSBC also have really good insurance cover called "Life Choices" - there are a few different options, but the one that appealed to me sounded good for private instrument teachers, as it would cover you in case of illness, injury or incapacity to work if it affected you for 14 days or more. Also there's one that voers un-employment - I think there are lots of choices. Unfortunately, I can't afford this at the moment, but it really did seem worth it, because if I get ill any time and can't teach, or if I lost students, there would be no way of paying my bills.

Ooooo thanks for the great reply- that is exactly the sort of info I was looking for. I will pop into HSBC and have a chat with them when im doing my rounds later!

Thanks

Abbey National has free business banking - no charges for anything at all. I've got two seperate companies banking with them and they're fine - I operate it as a postal account - I post cheques to them to pay in and withdraw by cheque too - although they did send me a card to use in the cash machine (I cut it up). For music teaching I use cash and pay the very occasional cheque I receive into my current account. That's just because my pupils tend to pay cash - otherwise I'd have another Abbey National account.

I keep a separate account from the joint one shared with my hubby. Don't rush into getting a business account. If you are working as a sole trader and not as a registered company, you do not need a 'proper' business account. Go into several banks and get the best deal. Be honest, but if they try to insist just tell them you will take your account and your money and give it to another bank. Consider the post office and the banking service (Giro?), they will be happy to help. Also consider building societies and mutual societies as well. They will try very hard to sell you an account with additional costs, including insurance and such like which will cost you a set amount each month. These can be useful, but check your other insurace policies and work out if it cost effective, and are you already covered by other policies.

It is helpful to keep your business money separate from your household money, but not essential. It all depends how good you are at book keeping, or if you use someone else to do them for you.

Don't let the banks bully you into something you don't need or want. You are bringing an asset to them, ie your money and transactions, so be firm about what you want and what you need and what you are prepared to pay for in charges. But if you can don't pay charges and keep your account for personal use. People who work in banks do not know everything about money - just think of the economy and don't let them bamboozle you!

Good luck and I hope I don't sound too bad tempered.

Thanks for the advice.
I am sure they will be very eager to open an account for me until they realise how small scale I am (at the moment)- I'm not forecasting a £2million turnover!

I will go and have a chat with several banks/societies and lay some of my cards on the table and see what they say. I am hoping that a normal account will be fine. Maybe I'll just keep all my money in a box buried in the garden. That never hurt anyone. Apart from that millionaire in china, who deposited some every month. He then found an empty box one month, and had a heart attack. Perhaps I won't go with the box idea........

I use a normal current account. I looked into opening a business account a year or two back and was unimpressed with the conditions / people I spoke to - HSBC was about the most helpful. My own bank was singularly underwhelming.

Maybe in the light of helpful advice on this thread - thanks ! - I will investigate again but I haven't found problems with using an ordinary account.

Yeah, that's what I'd suggest. Ignore the bank clerk who might want to try selling you a business account. Who wants to pay extra for the privilege of having a business account?

I don't have a special business account - too mean to pay charges . I have an e-savings account that I keep specifically for my earnings, separate from my other personal and joint accounts. I pay all my cheques into it and take out what I've allocated as my monthly 'salary'. It used to earn quite a good rate of interest, but not now, and I've got a card for paying in and taking out from the machine.

Most of my earnings go into the joint account which I share with my husband. I also have a LloydsTSB business account which I pay a small amount into each month, and that in turn pays my tax bill (saves having to scrape together the money or take it out of our current account). It's simple to use, no frills and costs about £4 a month if I remember rightly.

But that's £48 a year ... £240 every 5 years...or a fabulous weekend break - you can get free business banking at a few banks now.

I do the same. It is absolutely NOT necessary to have a business account as a small business or sole trader, it just costs money (which of course you can put through your tax) and makes the banks richer. You can even use your personal current account for this if you are organised, but at some point I preferred to have a separate acount for my business. Using a savings account even gives you a half-decent interest (if there's such a thing considering the current climate).

Since I get mainly paid in cash apart from the occasional cheques and standing orders, I deposit my money in a savings account I have reserved as my "business account". If I buy things for the business with my private credit or debit card, I simply re-imburse myself from that account. If I need to pay myself a wage, exactly the same. Quite simple if you are half organised

I don't have a business account.
I don't earn anywhere near enough to need one.

I used to have a business account and then last year realised I was paying lots of cash (something like £60 every 3 months) for services I simply didn't use or need.

When I requested opening a new account and closing my business one the bank were a bit awkward with me saying I was a business and needed a business account.

Simply though I don't earn enough money to warrant having the account.

Reluctantly they bank (narclays) agreed to close my account and create a new personal account.

I now have one personal account for my teaching and one for my personal life.

My advice - don't get a business account unless you're earning mega-bucks!

That sounds a pretty good description of their reaction to your request!

Well I didn't want to say who the bank was......think i've got away with it ?

Or use one that's free - such as Abbey National

I did seriously consider Abbey Rational - and used that as a tool to get narclays to change their mind. My problem with Abbey Rational though was something to do with paying into my account or something....I can't really remember

Is there actually any advantage for a music teacher in having a business account?

I have been doing more research and visits..

It is amazing the difference in advice I have been given today.

It has completely ranged from one end to the other. The different range of accounts and interest rates is interesting too.....

Get used to the contradictions Musicsong we call it contrapuntal, remember?????????

Business accounts or premium accounts with added features are only worthwhile if you don't have the insurance or need the added features.

That's the way I look at it.