Safety in rough seas
As a CFO, Treasury or Financial Controller, one of your primary responsibilities is to protect your company’s financial assets, including its business savings. But recent rough seas in the world of investing have made even the safest of assets feel unnerving. If your business has money in the bank, or is planning to hold more cash, it’s important to understand how you can protect it in case your bank becomes insolvent.
Fortunately, the UK government has set up an independent body to safeguard the savings of businesses and individuals. The Financial Services Compensation Scheme (FSCS) fully compensates each eligible company up to a limit of £85k in the event that your bank collapses. However, any cash over this limit held in the same account is at risk. The solution? Diversify your cash.
By spreading your business reserves across several banking institutions, you can make sure your company’s money is covered by the FSCS. It's worth noting that this protection limit applies to each individual bank or building society, rather than each account held with that bank.
Protection beyond FSCS
Diversifying is often a much safer way to keep your cash, but not just because of the FSCS. Because different banks react to market shifts in different ways, dividing your reserves between them often helps balance your cash portfolio and avoid the volatility you’d face if you concentrated your funds with a single firm.
But it also creates an opportunity for growth. Opening accounts with various terms, rates, and reputations helps you align your savings strategy to the company’s objectives. You might decide to deposit a portion into an instant access account with a reputable bank, while also locking some away in higher-yielding fixed-term accounts. This way, you would have emergency cash on hand should you need it, while the rest works hard towards your long-term financial ambitions.
How Flagstone can help you divide and prosper
Our cash deposit platform makes it easy to spread your business reserves across different banks ─ minimising your exposure to risk. With a single login, Flagstone gives you access to hundreds of savings accounts from dozens of UK banks, so you can move your money around easily without completing the laborious applications you would normally expect.