Guide · checked 25 October 2026
Bank account or e-money account: what's the difference?
Many business accounts look the same in an app, but your money can be protected in two different ways. In a bank account, eligible deposits are covered by the FSCS up to £120,000. In an e-money account, money is safeguarded instead. Here's what that means and how to tell which you have.
The difference in one table
| Bank account | E-money account | |
|---|---|---|
| Who holds your money | A bank authorised by the PRA | An electronic money institution authorised by the FCA |
| Protection if the firm fails | FSCS compensation for eligible deposits, up to £120,000 per depositor per banking licence | Safeguarding: customers' money must be kept separate from the firm's own funds |
| Is it FSCS-protected? | Yes, for eligible deposits | No |
| Interest | Possible | E-money can't earn interest; providers often offer a separate savings account through a bank |
What FSCS protection means
The Financial Services Compensation Scheme is the UK's compensation scheme for customers of authorised financial firms. If a bank fails, the FSCS can compensate eligible depositors, including many small businesses, up to £120,000 per depositor per banking licence. The limit applies to everything you hold with that licence, which can include accounts with different brands that share one bank behind the scenes.
What safeguarding means
E-money institutions don't take deposits in the way banks do, so their customers aren't covered by the FSCS. Instead, the rules require them to safeguard customers' money: keep it separate from the firm's own money, usually in a segregated account at a bank or protected by insurance. If the firm fails, safeguarded money should be returned to customers, minus the cost of the process. Recovering money this way can take longer than an FSCS payout.
Which business accounts are which?
From each provider's own pages, checked on 25 October 2026:
| Account | How your money is held |
|---|---|
| Tide | Accounts powered by ClearBank (UK bank): eligible deposits FSCS-protected. Some older accounts are e-money with PrePay Technologies and are safeguarded |
| ANNA Money | Main account is e-money with PayrNet Ltd, safeguarded and not FSCS-protected. ANNA's savings account is provided by Griffin Bank and is FSCS-protected |
| Zempler Bank | UK bank: eligible deposits FSCS-protected |
| Mettle | Bank account provided by NatWest: FSCS-protected. Mettle also mentions an e-money account with PrePay Technologies |
| Monzo Business | Provided by Monzo Bank Ltd, a UK bank |
| Starling | UK bank: FSCS-protected |
| Revolut Business | Revolut Bank UK Ltd is a UK bank. Business accounts are moving from Revolut Ltd e-money (safeguarded) to the bank, after which eligible deposits are FSCS-protected |
| Wise Business | Wise is authorised by the FCA as an e-money institution: money is safeguarded, not FSCS-protected |
See fees and offers side by side in our business account comparison.
How to check any provider
- Read the small print at the bottom of the provider's website. It should name the firm that holds your money and whether it's a bank or an e-money institution.
- Search the FCA register. The Financial Services Register shows each firm's permissions.
- Look for the FSCS statement. Banks usually display FSCS information. If a provider says money is "safeguarded", it's an e-money account.
- Check your own account terms, especially if your provider offers both kinds of account.
Does it matter for a small business?
For many small businesses, an e-money account works fine day to day. The difference shows up only if the provider fails. If you hold large balances, need interest, or want the simplest protection, a bank account with FSCS cover is the more straightforward choice. If you choose an e-money account, consider keeping larger reserves in an FSCS-protected savings account.
FAQs
Is an e-money account safe?
E-money institutions are authorised and regulated by the FCA and must safeguard customers' money. It's a different form of protection from the FSCS, not no protection.
Is Tide a bank or e-money?
Tide isn't a bank, but most Tide accounts are powered by ClearBank, a UK bank, so eligible deposits are FSCS-protected. Is Tide safe?
Is the FSCS limit per account?
No. It's per depositor, per banking licence, across all your accounts with that licence.