Shared banking licences: at a glance
What do I need to know? The Financial Services Compensation Scheme (FSCS) protects eligible deposits up to £120,000 per client, per banking group. The same limit applies whether you’ve opened a business or personal savings account.
What does it mean for me? If your business holds funds with different banks that share a licence, the FSCS only covers up to £120,000 of your combined balance.
Why does it matter? Financial crises can sometimes spread to multiple banks. So, holding cash across multiple licences can help ensure you receive a greater share of your cash if the unexpected occurs.
The FSCS protects eligible deposits in business savings accounts up to £120,000 per client, per banking group. When banks and building societies share a banking licence, the FSCS treats them as one entity for deposit protection purposes.
This can sometimes happen when two banks merge their operations. With a wave of bank mergers on the horizon, more businesses may need to review their cash management strategies.
In this guide, you’ll learn what a bank merger could mean for your business’s cash reserves, and how you could cover more of your cash with the FSCS.
Is FSCS protection per bank or per banking group?
FSCS protection for small businesses and limited companies applies per client, per banking group.
Some banking groups and building societies operate under one licence. This means that you could hold multiple accounts with banks under the same licence without knowing it. If this is the case, your entire balance is only protected up to the £120,000 limit.
How bank mergers are bringing more banks under one licence
Bank brands that may look separate can sit in the same group. When two banks merge, they may combine their banking licences, which can change your level of FSCS protection.
Recent bank mergers and combined licences
Virgin Money became part of the Nationwide group in October 2024, but its business only transferred to Nationwide Building Society on 02 April 2026. Since then, the FSCS has treated the two as one provider, so business deposits held with both share a single £120,000 limit.
Similarly, Santander completed its acquisition of TSB on 30 April 2026. The two banks currently retain separate licences, but Santander is expected to integrate TSB in the first half of 2027.
Licence integration rarely happens as soon as a merger completes. It can take months or even years, and each bank maintains separate FSCS limits in the meantime.
It’s important to note that FSCS coverage changes on the licence transfer date, not when the deal completes.
What happens to your business’s FSCS protection when banks merge
When two of your banks merge, the impact on your FSCS protection depends on how much you hold across your accounts.
For example, if you hold £100,000 in Bank A and £80,000 in Bank B, both with separate licences, the FSCS would protect the full £180,000.
If Banks A and B started operating under the same licence, the FSCS would only cover £120,000, leaving £60,000 unprotected if both banks go out of business.
The Prudential Regulation Authority (PRA) requires banks to notify customers before a licence transfer takes effect. This gives finance leaders a window to withdraw from fixed rate or notice savings accounts without the penalties that may usually apply.
How to protect more of your business cash
One way that finance leaders can increase FSCS protection for business reserves is by spreading deposits across accounts with separately licensed banks. This could help to protect your company’s cash if one of those banks goes out of business.
Businesses with over £1m in cash reserves would need accounts with at least nine separately licensed banks to protect the full amount with the FSCS. This could increase admin if you choose to do this manually.
Savings platforms make this process more straightforward, giving you access to accounts with multiple banks through one application.
Dividing cash reserves between multiple accounts can do more than reduce your risk. Finance teams often spread money across account types, including instant access accounts, notice accounts, and fixed rate accounts that can pay higher interest in exchange for reduced access.
This approach lets you match terms to cash-flow forecasts and ladder deposits around expected outgoings, while keeping other funds within reach when you need them.
Tracking your FSCS protection
Staying informed about licence transfers and mergers can help you rebalance your cash reserves before your business loses some of its protection. You can check whether any of your accounts fall under the same licence using the FSCS protection checker.
Savings platforms like Flagstone give businesses access to hundreds of savings accounts with multiple banks through a single application.
Our platform shows how much of the cash you hold with us is within FSCS limits, so finance teams can manage substantial reserves in one place with ease.
Spread your business cash across separately licensed banks with Flagstone
Diversify cash without the usual admin. With Flagstone, you can open and manage hundreds of business savings accounts from 50+ banks with one sign-up.
All in one place.
