By: Money Navigator Research Team
Last Reviewed: 27/01/2026
FACT CHECKED
Quick Summary
A restricted Tide business account usually means the account is still open, but some actions are disabled (often temporarily while checks are completed). A closed account usually means the provider has ended the account relationship and is moving toward final reconciliation and returning any remaining balance (subject to holds, fees, disputes, and legal/compliance constraints).
A critical practical point: closure is not always “two months’ notice”. Under Tide’s platform terms, termination can be immediate (0 days’ notice) in certain situations – including where a fraud prevention agency determines a fraud or money laundering risk, or where continuing becomes unlawful or contrary to relevant rules or guidance.
See the termination provisions in Tide’s official terms (Clause 36) in the Tide Platform terms (PPS), and how the Financial Ombudsman has described “immediate closure” under those terms in decision DRN-4567472.
This article is educational and not financial advice.
Restricted vs closed: the shortest useful definitions
“Restricted” (temporary controls)
“Restricted” commonly indicates the account is open, but some functions are limited – for example bank transfers out, adding new payees, card spending, or certain in-app features.
Tide itself describes “paused” accounts as typically temporary while checks are carried out (its wording and examples are in Tide’s explainer on paused accounts). In day-to-day terms, this usually feels like reduced account functionality, rather than the money “disappearing”.
“Closed” (relationship ended)
“Closed” commonly indicates the provider has ended access and is winding down the account. Payment features usually stop (or wind down quickly), cards are cancelled, and the provider moves to final reconciliation before any remaining balance is returned.
Importantly, “closed” can happen with notice or immediately, depending on the contractual basis and circumstances (see the termination section in the Tide Platform terms (PPS)).
The “immediate closure” warning: when “closed” can mean 0 days’ notice
Many people assume closure always comes with a notice period. Tide’s platform terms include a general termination route “by giving you two months’ notice”, but also set out situations where termination can be immediate – including (among other triggers) where a fraud prevention agency determines that a fraud or money laundering risk is present, and where laws or rules make continuation unlawful or contrary to applicable requirements (Clause 36 in the Tide Platform terms (PPS)).
The Financial Ombudsman has also referenced Tide closing accounts immediately (or without notice) where Tide met the criteria in its terms – for example in decision DRN-4567472. Practically, this is why “closed” can mean locked out straight away, rather than a managed 60-day run-off.
What “restricted” usually looks like in a Tide business account
A restriction is often experienced as a capability change, not a “balance change”. Funds can still show in the account, while the ability to use them is limited.
Common patterns include:
Outgoing payments paused: bank transfers out may be disabled or fail.
Card controls applied: card spending may be limited, declined, or temporarily disabled.
Feature-level locks: actions like adding payees, changing details, or using certain payment routes can be blocked.
Inbound may still work (sometimes): depending on the rail and the restriction type, incoming payments may still land – but this varies.
If you’re trying to understand how an app-based account is structured (bank vs e-money models can behave differently during restrictions), a factual starting point is the FCA Financial Services Register and our internal explainer: App business accounts: bank or e-money?.
For a wider explanation of why UK business accounts get restricted across providers, see: Bank compliance reviews explained.
What “closed” usually looks like in a Tide business account
When an account is closed, the change is typically structural:
Account services stop: payment features generally stop and cards are cancelled.
New payments are disrupted: Direct Debits/standing orders usually fail going forward; inbound transfers can be rejected/returned depending on rail and timing.
Reconciliation happens next: the provider usually finalises fees, disputes, and compliance steps before returning any remaining balance.
Two “closed” accounts can feel very different day-to-day:
Closed after notice: a managed wind-down where some actions remain possible until the end date.
Closed immediately: access may end straight away, and the account shifts immediately into reconciliation mode.
Why restrictions happen (and why reasons can be vague)
Restrictions often sit inside risk and compliance controls: firms generally need to know who they’re dealing with and whether activity matches the expected profile (see the UK’s Money Laundering Regulations 2017 and industry guidance such as the JMLSG guidance).
Providers may also be limited in what they can say in certain situations. Concepts linked to “tipping off” sit within the UK proceeds-of-crime framework (see the Proceeds of Crime Act 2002). For how that shows up operationally, see our internal explainer: Why banks can’t explain restrictions.
When a restriction turns into closure
A restriction can be lifted. It can also progress to closure if the provider decides it cannot continue the relationship.
In many real-world sequences, the path looks like trigger > restriction > review > decision > lift restriction or close. We cover that general decision flow here: Compliance restriction vs closure: bank decision process.
The important caveat: not all closures follow a long sequence. Under the Tide Platform terms (PPS), there are scenarios where termination can be immediate – so a restriction may be brief or not visible as a distinct stage.
Summary Table
| Scenario | Outcome | Practical impact |
|---|---|---|
| Temporary restriction while checks run | Account remains open; some actions disabled | Outgoing payments may fail; cards may decline; cashflow timing becomes uncertain |
| Restriction limited to certain rails/features | Some features work; others blocked | Operational workarounds may be needed (e.g., card works but transfers out don’t) |
| Closure after notice | Relationship ends on an end date | Payment setup needs unwinding; services stop at (or shortly after) the closure date |
| Immediate closure (0 days’ notice) | Relationship ends straight away (where terms allow) | Access may end instantly; account moves into reconciliation/returns workflow |
| Closure with remaining balance | Provider reconciles then returns remainder | Release can be delayed by fees, disputes, and compliance steps |
Scenario Table
| Scenario level | Process level (what’s happening behind the scenes) | Outcome level (what it means day-to-day) |
|---|---|---|
| “Restricted” label appears | Monitoring trigger > internal review queue > controlled access | Day-to-day paying and card use becomes unreliable until controls are lifted |
| Outgoing transfers disabled | Outbound rails paused while checks complete | Suppliers, payroll, and tax timings can be disrupted |
| “Closed” (after notice) | Exit decision > managed wind-down > reconciliation | Cards cancelled at/near closure; new payments increasingly fail |
| “Closed” (immediate) | Immediate termination trigger under terms > reconciliation | Lockout can be immediate; practical access may switch to statements/support only |
| Complaints raised | Provider complaints process > possible escalation | Outcomes depend on eligibility and what the provider can evidence and disclose |
Payments, payroll, and “in-flight” transactions: what usually changes first
In many cases, the first visible impact is payments, because payments move value out of the account.
Payroll: restrictions can affect payroll timing where outbound transfers are paused. See: Payroll when business account is closing or restricted.
Payments already sent (“in-flight”): whether an outgoing payment completes depends on where it is in processing when controls/closure occur. See: Outgoing payments if account closed mid-processing.
Balances and cover: bank deposits vs e-money safeguarding
App-based business accounts can be structured differently. In UK terms, people are often trying to understand whether they’re dealing with:
FSCS deposit cover for eligible deposits at authorised banks/building societies (see FSCS: what we cover); or
safeguarding arrangements used by e-money institutions (which are not the same thing as FSCS deposit cover).
Because provider models vary, the practical question is which structure applies in your case – starting with regulatory status via the FCA Financial Services Register. For the internal deep-dive, see: Safeguarding vs FSCS deposit cover.
Tide Business Bank Account
Tide is widely used as an app-based business account, and “restricted” vs “closed” statuses typically show up as feature access changes (payments, cards, in-app actions), with knock-on effects that depend on the specific control applied and the underlying structure.
For a neutral overview of Tide’s plans, fees, and trade-offs, see our Tide business account review.
Frequently Asked Questions
“Restricted” and “frozen” are often used interchangeably in everyday language, but they can describe different control levels. “Restricted” frequently means some functions are limited, whereas “frozen” is often used to imply a broader lock where most outbound use is blocked.
In practice, the label matters less than observed behaviour: whether transfers out work, whether the card works, and whether the account can receive funds. Two accounts can display similar wording in-app but behave differently depending on which features are locked.
Yes. Many providers apply targeted controls, and outbound payments are a common first control point because they move funds irreversibly. Restrictions can be narrow (for example, blocking bank transfers out) while still allowing statement access or limited card functionality.
The edge case is where a broader control is applied, affecting card usage and inbound routes as well. That tends to happen where the risk control is applied at account level rather than at a single feature or rail.
There is no single standard timeline. Restrictions are tied to what needs to be checked and how quickly information can be reviewed, which can vary by case and by the provider’s internal processes.
A practical edge case is when a restriction is a precursor to closure. Some restrictions are lifted; others are followed by an exit decision. And where a provider’s terms allow immediate termination, the “restricted” stage can be very short or not clearly visible as a separate status.
Often, once closure takes effect, new incoming payments are rejected or returned, but the outcome depends on the payment rail, timing, and whether the account details remain active during any wind-down period.
An edge case is an inbound payment initiated before closure but settling after. Depending on scheme rules and provider processes, it may still arrive and then be returned, or it may be rejected upstream. That’s why closure can create reconciliation problems for invoices already issued.
Closure generally means Direct Debits and standing orders stop being processed. During restrictions, some providers also block new mandates or stop scheduled outgoings, particularly where outbound rails are paused.
Timing is the main edge case: an item already in a processing window can sometimes still be attempted, and then either paid or returned. This is one reason restrictions/closures can produce inconsistent results across payments that look “similar” from the business’s perspective.
Sometimes. Restrictions can be feature-specific, so the card may still authorise while bank transfers out are blocked, or vice versa. It depends on the control that has been applied and the provider’s system design.
A key edge case is delayed presentment (where authorisation and settlement are separated). Even if a card authorises, later settlement can be affected by controls, closure, or balance availability once fees and holds are applied.
It depends on whether the funds are held as an eligible bank deposit or as an e-money balance. FSCS deposit cover applies to eligible deposits at authorised banks and building societies (see FSCS: what we cover).
Where the balance is e-money, the relevant concept is typically safeguarding rather than FSCS deposit cover. Understanding which structure applies starts with the provider’s regulatory status on the FCA Financial Services Register, and then the specific product/structure being used.
Under Tide’s platform terms, there is a general termination route “by giving you two months’ notice”, but the same termination section also provides for immediate termination in certain circumstances – including where a fraud prevention agency determines a fraud or money laundering risk, or where continuing becomes unlawful or contrary to relevant rules/guidance (see Clause 36 in the Tide Platform terms (PPS)).
The Financial Ombudsman has also described cases where Tide closed accounts without notice, considering whether Tide met its contractual criteria for immediate closure (see decision DRN-4567472). Separately, providers may be limited in what they can disclose in some contexts (the legal concept of “tipping off” sits within the Proceeds of Crime Act 2002).
Holds can occur for several reasons, including reconciliation, unpaid fees, dispute windows, or compliance-related controls. Payment ecosystems can generate liabilities after the original transaction date (for example, reversals and chargebacks), and some providers manage that risk through delayed release or reserves.
An edge case is where the displayed balance does not equal “transferable right now” because the provider applies internal holds while it completes checks or reconciles unsettled items. This is one reason closure can feel slower than expected even when a balance is visible.
Requests often focus on confirming identity/ownership, the nature of the business, and the reason for certain activity patterns – consistent with customer due diligence and ongoing monitoring expectations (see the Money Laundering Regulations 2017 and the JMLSG guidance).
Edge cases arise where activity changes quickly (new countries, new products, unusual transaction sizes) or where corporate structure is complex. In those situations, a review may involve more documentation and take longer simply because more facts need to be verified.
“Restricted” and “closed” are best understood as control states in a risk system, not as moral judgments. Restrictions are often a way to limit certain actions while the provider reconciles what it sees (transactions, counterparties, patterns) with what it knows (customer profile, ownership, business model).
The most common misunderstanding is treating closure as always “a notice period event”. In practice, contracts often include both a standard notice route and an immediate termination route for defined circumstances.
That’s why two businesses can see “closed” and experience very different realities: one gets a wind-down; the other sees immediate lockout followed by reconciliation and any balance return process.
Sources & References
Official Tide terms (termination and immediate closure triggers): Tide Platform terms (PPS)
Tide’s explanation of account pauses (how “paused” can work in practice): Tide account paused? Here’s why
UK AML framework: Money Laundering Regulations 2017
Industry AML guidance: JMLSG guidance
UK proceeds-of-crime framework (including concepts relevant to disclosure limits): Proceeds of Crime Act 2002
Regulator register (authorisation checking): FCA Financial Services Register
Deposit scheme scope: FSCS: what we cover
Ombudsman route overview: Financial Ombudsman Service: how to complain
Example ombudsman decision referencing immediate closure under terms: FOS decision DRN-4567472
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