The limit, and what it is counted against
The Financial Services Compensation Scheme protects eligible deposits up to £120,000 if a bank, building society or credit union fails. The Prudential Regulation Authority confirmed the increase from £85,000 in November 2025 and it took effect on 1 December 2025.
The limit applies per depositor, per authorised firm. In practice that means per banking licence. It is not per account, and it is not per brand. If your company holds three accounts with the same licensed bank, the three balances are added together and £120,000 of the total is protected.
Why the brand on the card tells you nothing
Banking groups arrange their licences in different ways. Some run several brands under a single licence, so money placed with two names you think of as separate banks is, for FSCS purposes, money placed with one. Others hold separate licences for separate brands, so each carries its own £120,000. You cannot tell which arrangement applies from the name on the account. You have to check the licence, and the FSCS publishes a tool for exactly that on its website.
A company holding £2m under one banking licence is protected on 6% of it. The remaining £1,880,000 sits on that bank's balance sheet as an unsecured claim if the bank fails.
Is a company eligible at all?
Most are. Since 2015 the scheme has covered deposits held by companies of all sizes, with a small number of exclusions, chiefly financial institutions and certain public bodies. If you are a trading business with a normal current or deposit account, the working assumption is that you are eligible, but the assumption is worth confirming with the bank in writing rather than inferring.
What this changes in practice
For a business with cash in the low millions, the limit is a rounding error. The protection that matters is not FSCS, it is the credit quality of the institutions holding the money and how much sits with any one of them. That is an argument for two things: knowing the licence behind every balance, and spreading larger balances across several assessed providers so that no single failure is a large share of your cash.
There is a second effect. Money that is spread deliberately tends to be placed deliberately, on a rate that has been compared, rather than left on whatever the main bank's default business rate happens to be. The protection question and the rate question usually get answered in the same exercise.
Three things to check this week
Which licence sits behind each balance. Use the FSCS checker, or ask the bank which authorised firm holds the deposit. How much of your cash is protected in total, once balances under the same licence are added together. What each balance is earning, because the answer to the first two questions is usually the moment the third one gets asked.