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The Financial Services Compensation Scheme (FSCS) is the UK’s statutory fund of last resort. It is a government-backed safety net designed to protect your money if a financial institution fails. Just as your personal bank account is protected, the FSCS provides a vital layer of security for small business owners, ensuring your hard-earned funds are safe as you grow.
What is the FSCS?
The FSCS was established to provide a guarantee for customers of authorised financial services firms. If a bank, building society, or credit union becomes insolvent and cannot pay back your money, the FSCS steps in to compensate you automatically.
As of 1 December 2025, the standard FSCS protection limit for eligible deposits increased to £120,000 per person or company, per authorised firm. This protection is free and applies to both retail (personal) and most business accounts, providing a robust level of security for the UK's small business community.
What is an authorised firm?
An authorised firm is a financial institution that has been granted a specific banking licence by the Prudential Regulation Authority (PRA). The FSCS protection limit of £120,000 applies per authorised firm, not per bank account or per brand.
This is a vital distinction because many different banking brands actually operate under the same authorised firm and share a single banking licence. If you hold money with two different brands that share a banking licence, your total protection is limited to £120,000 across both. If your combined balance exceeds this, the extra amount is not protected.
How to check if your banks share a licence:
Because banking groups can merge or change ownership, it is important to verify which brands share a licence to ensure your total business capital is covered.
To check if your money is protected, you can:
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Check the Financial Services Register: Every authorised firm has a unique firm reference number (FRN).
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Use the FSCS Protection Checker: This tool allows you to search by brand name to see who holds the licence.
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Consult consumer guides: Independent resources, such as MoneySavingExpert’s guide on safe savings, maintain regularly updated lists of which banks share a licence.
Please note: the Capital on Tap Instant Savings Account is powered by ClearBank, with deposits held by them, meaning Capital on Tap does not possess the customer's savings at any time. When checking the register, please search for “ClearBank” or FRN 754568.
How business funds are protected
While the standard protection limit applies to everyone, the FSCS assesses eligibility based on the legal entity that owns the money.
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Entity type |
How the FSCS views your protection |
|
Limited Company & LLP |
Separate: Your company is a separate legal entity, so its savings are protected independently from your personal funds. |
|
Sole Trader |
Shared: The law sees no distinction between you and your business, so personal and business savings share one single limit. |
|
Partnerships |
Single: The partnership is typically treated as one entity, receiving one instance of protection for the business account not one per partner. |
What are you protected against?
The FSCS is specifically designed to protect you against firm failure. This means if your bank goes bust and is unable to return your deposits, the scheme steps in to pay you back.
It is important to note what is not protected under the FSCS:
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Market fluctuations: Losses caused by investments going down in value.
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Fraud: Individual scams or fraudulent activity on your account (this is usually handled by the bank's own security and FCA regulations).
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Business performance: The FSCS does not compensate you if your business loses money through its daily operations.
Why credit facilities aren't protected by FSCS
One of the most common questions for business owners is how their credit card limit is protected compared to their savings. The key difference is that the FSCS protects assets (your money), not liabilities (money you have borrowed).
Because a business credit card is a facility where we lend money to you, there is no deposit for the FSCS to protect. If a credit provider fails, you do not lose your own capital; instead, the facility may be closed or the debt managed by an administrator. This is exactly how personal accounts work at high-street banks—your savings are protected by the FSCS, but your credit card is regulated by the Financial Conduct Authority (FCA) to ensure you are treated fairly.
Protection for Capital on Tap Instant Savings
The Capital on Tap Instant Savings account is powered by ClearBank, a fully authorised UK bank. Because ClearBank is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, your funds are FSCS protected.*
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Eligible deposits are covered: Your business savings are protected up to the £120,000 limit.
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Aggregated limits: If you hold other accounts directly with ClearBank or any of their other partners, those balances count towards the same £120,000 total limit.
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Fast compensation: The FSCS aims to pay back the majority of eligible deposit claims within 7 working days of a firm failing.
The bottom line
The FSCS ensures that eligible deposits held by small business owners receive the same statutory protection as those held by retail banking customers. Credit facilities like the Capital on Tap Business Credit Card are protected through FCA regulation and strict safeguarding. Eligible deposits in a Capital on Tap Instant Savings account, powered by ClearBank, are covered by the FSCS subject to eligibility, up to £120,000.
*Eligible deposits in your Capital on Tap Instant Savings account (powered by ClearBank) are FSCS (Financial Services Compensation Scheme) protected up to £120,000. Note that this limit applies to the total of all funds you hold across any accounts with ClearBank.
Frequently asked questions
Are all business bank accounts protected by the FSCS?
Most UK business bank accounts are protected, provided the institution is authorised by the Prudential Regulation Authority (PRA). However, very large corporations or certain financial institutions themselves may not be eligible.
Does FSCS protection cover my business credit card limit?
No, the FSCS only protects deposits (money you have saved). It does not cover credit limits or protect debts. If your credit card provider fails, you do not lose money; the facility may simply be closed or transferred.
How do I check if my money is protected?
You can use the official FSCS protection checker on their website. For Capital on Tap Instant Savings, you should check for "ClearBank," as they are the authorised firm holding your deposits.
What happens if I have more than £120,000 in my business savings?
Any amount over the £120,000 limit with a single authorised firm is not protected by the FSCS. To ensure full protection, many businesses choose to spread their cash across different banks that do not share a banking licence.
Does the FSCS protect against fraud on my business account?
The FSCS protects against the failure of a financial firm. It does not typically cover individual instances of fraud or scams. For fraud protection, you should look at your bank's specific security guarantees and FCA regulations.
