Personal & Business Accounts, should they be in the same bank?

[OneWonder]

Hi,

As i already have current account which is personal (debit card). But i have NO "credit" cards with any bank (or ever had one).

So i'm looking to open up a "business" debit account, so i can keep my business transactions separate from the personal account.

Right now i'm planning to open 2 user-generated-content websites in different niche's. So majority of the incoming comes from adverts displayed on the site.
And i do this all myself, so that makes me a sole trader.


Should i open a business debit account in the same bank ? Or should i go to another bank ?

I need to hear your thoughts, especially the pros & cons about each choice.

Thanks

 

[OldWelshGuy]

it isn't ideal to have them in the same bank, because they can offset on account against the other. i.e. if your bsuiness account is overdrawn they can mvoe the money from your personal account, and the other way around.

 

[Adauxi]

It makes lots of sense to separate business and personal finances. It will save you time (and maybe money) when it comes to preparing accounts too.

If you are running as sole trader, then separate banks make more sense. If you use a ltd company or LLP, then you can use the same bank provided you haven't guaranteed any liabilities of the entity.

Remember also the £85k cap per bank on protection.

You should think about fees too - your existing personal bank may or may not be competitive. Banking fees can quickly add up if you are on the wrong deal - many banks offer cheaper startup banking deals.