I had a great question recently from Robert who is basically asking what’s the quickest and easiest way to set up a bank account for his new limited company ?
Like many property investors nowadays Robert has set up a limited company in which to hold his (buy to let investment) properties because for some investors there can be significant tax advantages (ask your accountant if this would be right for you – you’d need to check)
I last went through the process of creating a bank account for a new limited company about two years ago.
At the time I was banking with a traditional bank, I won’t mention the name, with whom I had two active business bank accounts at the time, and had previously had two further business bank accounts with them.
I’d been banking with them for over 20 years.
All things considered I assumed that it would be relatively straight forward and easy to open a new bank account for my new limited company.
I was wrong!
After about two or three weeks of answering inane questions, going over old ground, providing information which they themselves had held anyway for over 20 years, I gave up.
It felt like we had to start from scratch, and they didn’t really want my business anyway.
But then I remembered that my friend Dixie (I did a great interview with Dixie which you can watch here https://youtu.be/7OZ9GNU-zlM) had casually recommended that I use Tide.
Tide are one of the new breed of online banks. And one of the major benefits is that all banking activity can be undertaken on your app on your phone, or on your PC.
However, this is the big learning.
It literally only took me 15 minutes to open my tide account!
How cool is that?
Having said that I was disappointed to find that there were limits on the daily amount of money that I could pay out or pay in, and limits on the amount of money that I could hold in my account at anyone time.
BUT
When I expressed my concerns via the help feature on the telephone app, I was told that that isn’t a problem.
All I needed to do was to go back into my app and open an associated account. With an associated account I could greatly increase the daily limits. So I did.
And opening the associated account took all of 30 seconds.
But there’s more!
I realised that the associated account doesn’t have to be in the same name as the first or main account.
So what does that mean, and why is that a good thing?
Well think about this.
What if you want to open up yet another new limited company, and you need yet another new bank account?
All you have to do, is create an associated account on your Tide app, remember that takes all of about 30 seconds, and then that account can have the name of your new business.
So in theory, on your Tide app, you can have accounts for up to four different businesses.
So I’m a total convert to Tide, and online and app based banking. It really is the way ahead.
Unless the traditional banks get their act together, I can see them disappearing over the next 10 years or so.
Sadly I get no kickback from recommending Tide!
And, since discovering Tide, I’ve now discovered Starling.
Starling are very similar but one of the big advantages for me, is that they make foreign exchange incredibly easy and very cheap. But it’s the same kind of principle as Tide.
It’s certainly much easier to open a business account on Starling than it is with a traditional bank, although for sake of full transparency, it is slightly more involved than opening an account on Tide.
But I think that they are both excellent.
So if you are ever in the position that Robert finds himself in, needing a new bank account for a new limited company to hold your buy to lets, I certainly recommend that you consider Tide or Starling.
Or perhaps one of the many other online banking applications that are now available.
After all, other banks and apps are available.
Here’s to Successful Property Investing.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
https://www.ThePropertyTeacher.co.uk
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to:
https://www.ThePropertyTeacher.co.uk/the-successful-property-investors-strategy-workshop