According to the FCA and PRA the definition of accepting deposits is:
5(1) the regulated activity, specified in article 5 of the Regulated Activities Order (Accepting deposits), which is in summary: accepting deposits if:
(a) money received by way of deposit is lent to others; or
(b) any other activity of the person accepting the deposit is financed, wholly or to a material extent, out of the capital of or interest on money received by way of deposit.
5(2) In paragraph (1), "deposit" means a sum of money, other than one excluded by any of articles 6 to 9, paid on terms-
(a) under which it will be repaid, with or without interest or premium, and either on demand or at a time or in circumstances agreed by or on behalf of the person making the payment and the person receiving it; and
Paid on terms
5(3) For the purposes of paragraph (2), money is paid on terms which are referable to the provision of property or services or the giving of security if, and only if-
(a) it is paid by way of advance or part payment under a contract for the sale, hire or other provision of property or services, and is repayable only in the event that the property or services is or are not in fact sold, hired or otherwise provided;
(b) it is paid by way of security for the performance of a contract or by way of security in respect of loss which may result from the non-performance of a contract; or
(c) without prejudice to sub-paragraph (b), it is paid by way of security for the delivery up or return of any property, whether in a particular state of repair or otherwise.
Supposing we offered a service with basic current account functionality with no interest, no overdraft and charging a fee to cover any costs, we reckon:
- we'd only be caught by 5(1)(a) if we offered overdrafts or loans.
- we'd only be caught by 5(1)(b) if we tried to make a profit.