Is money safe in a business account? FSCS and e-money explained

Money in a business account with a UK bank or building society is protected by the Financial Services Compensation Scheme (FSCS) up to £120,000 per eligible depositor, per bank. Money with an e-money institution (EMI) is not FSCS protected if that firm fails. Instead the EMI must safeguard it, which usually means you get most, but not always all, of it back.

The type of provider matters more than the app or brand name. This page explains both kinds of protection and how to check yours.

How much does the FSCS protect?

The FSCS protects up to £120,000 per eligible depositor, per bank, building society or credit union, for failures on or after 1 December 2025. The Bank of England confirmed the rise from £85,000 on 18 November 2025.

The FSCS aims to pay within seven working days of a bank failing. Temporary high balance and other complex claims take longer.

How does the limit work for each business type?

The FSCS applies the limit differently depending on the legal form of your business.

So a sole trader with £70,000 in a business account and £60,000 in personal savings at the same bank has £130,000 there but only £120,000 protected. A director’s personal savings do not reduce their limited company’s limit.

The FSCS says some charities can claim too. Its eligibility rules note that large businesses are generally excluded from claims, with some exceptions for deposits, so larger groups should check the Depositor Protection rules. Our guide on limited company vs sole trader covers the legal difference.

What if two banks share a licence?

Banks in the same group that share one banking licence count as one bank. The £120,000 limit then covers your combined balance across all of them.

If you hold more than £120,000, spread it across banks that do not share a licence. You can check licences on the FCA’s Financial Services Register.

What happens to money in an e-money account?

An e-money institution is not a bank and is not covered by the FSCS if it fails. The FCA says plainly that “your money won’t be protected by the Financial Services Compensation Scheme” with an EMI or authorised payment institution.

Instead, EMIs must safeguard customer money. They do this either by keeping it separate from their own funds in an account in the firm’s name, or by an insurance policy or similar guarantee.

If an EMI fails:

1. An administrator or liquidator takes over.
2. You claim from them, not from the FSCS.
3. They return safeguarded money to customers.
4. Their costs may be deducted, and recovery may take some time.

The FCA says you “should get most of your money back”. Small payment institutions do not have to safeguard at all, so ask what protection they offer.

Is there any FSCS cover for e-money?

Yes, in one narrow case. The Bank of England’s PS2/23 extended FSCS deposit protection to eligible customers of EMIs and payment institutions if the bank holding the firm’s safeguarded funds fails. The rule took effect on 12 March 2023.

That covers failure of the bank behind the EMI. It does not cover failure of the EMI itself.

What has changed for e-money safeguarding in 2026?

The FCA’s stricter safeguarding rules came into force on 7 May 2026, under policy statement PS25/12. They aim to reduce shortfalls and return money faster if a firm fails.

Under the FCA’s safeguarding requirements, firms must now:

• reconcile safeguarded funds at least once every business day
• send the FCA a monthly safeguarding return within 15 business days of month end
• arrange regular safeguarding audits

These rules make safeguarding stronger. They do not turn it into FSCS protection.

How to check your own account

1. Find the legal name of the provider. Look in the terms and conditions or at the bottom of its website, because brand names differ.
2. Search the Financial Services Register. It shows whether the firm is a bank, an EMI or a payment institution.
3. Check shared licences. Add up balances at any brands that share one.
4. Total your balances per bank. Compare them with the £120,000 limit for your business type.

Which applies to you?

• If your account is with a UK bank or building society, you have FSCS cover up to £120,000 per licence.
• If your account is with an EMI, your money is safeguarded, not FSCS protected.
• If an app says your money is held by a partner bank, read the terms to see whether you hold a deposit with that bank or e-money.
• If you hold over £120,000 at one bank, consider splitting it across unconnected banks.

What to do now

Check the provider type of every business account you hold, using the Register. For a fuller comparison, see e-money vs business current account, our business bank accounts guide and how to switch business bank account.

Frequently asked questions

Are business bank accounts FSCS protected?

Yes, if they are with a UK-authorised bank, building society or credit union. Cover is up to £120,000 per eligible depositor, per bank, for failures on or after 1 December 2025.

Is e-money FSCS protected?

No, not if the e-money institution itself fails. Your money must be safeguarded instead, and the FCA says you should get most of it back, minus possible costs.

Does a limited company get its own FSCS limit?

Yes. A limited company or LLP is a separate legal entity, so it has its own £120,000 limit at each bank, separate from its directors.

Do sole traders get separate FSCS cover for business accounts?

No. A sole trader’s business and personal accounts at the same bank share one £120,000 limit.

How quickly does the FSCS pay out?

The FSCS aims to pay within seven working days of a bank, building society or credit union failing. Complex claims, including temporary high balances, take longer.