Business Savings Accounts - Best Savings Rates | moneyfacts.co.uk

Business Savings Accounts - Best Buys

Find a great home for your business' savings. Compare the best business savings accounts using Moneyfacts' independent best buys.
 

Variable Business Savings - Instant Access & Notice Accounts

CompanyAERNotice / TermDeposit


90 Day Notice Account
1.51%
90 Day£250


95 Day Business Savings Account
1.35%
95 Day£10000


90 Day Notice Account Issue 1
1.31%
90 Day£10000


100 Day Notice Business Account
1.25%
100 Day£500


90 Day Business Notice Account
1.20%
90 Day£1000


Business 100 Day Notice Savings
1.10%
100 Day£1000


Business Deposit 90 Day Notice (2nd Issue)
1.05%
90 Day£1000


100 Day Notice Business Deposit Account
1.05%
100 Day£10000


60 Day Notice Account
1.00%
60 Day£250


Business Saver 90 (Issue 1)
1.00%
90 Day£1000
Sponsored Products


35 Day Business Savings Account
1.00%
35 Day£10000


95 Day Notice
0.75%
95 Day£1000


Easy Access Account Issue 7
0.50%
None£1000


Business Instant Saver
0.40%
None£10000
Last Updated: Wednesday 22 November 2017 17:26

Moneyfacts.co.uk Best Buys show the best products chosen by our independent experts. Where we have been able to we have also provided a link for you to open an account today. Products shown with a yellow background are sponsored products.

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per person per institution.

Disclaimer:
All rates subject to change without notice. Please check all rates and terms before investing or borrowing.
 

Business Fixed Rate Bonds

CompanyAERNotice / TermMin Investment


Fixed Term Deposit
1.86%
12 Month Bond£1000


Term Deposit
1.50%
1 Year Bond£1000


Business Fixed Term Deposit
1.46%
12 Month Bond£10000


Business 1 Year Bond
1.45%
1 Year Bond£500


Fixed Rate Bond
1.35%
1 Year Bond£10000


1 Year Fixed Rate Savings Account
1.30%
1 Year Bond£1000


1 Year Business Fixed Rate Bond Issue 13
1.30%
1 Year Bond£5000


Business FlexiBond
1.30%
1 Year Bond£10000


1 Year Business, Trust and Charity Bond Issue 15
1.30%
1 Year Bond£10000


Fixed Rate Deposit Account
1.25%
1 Year Bond£1000
Sponsored Products


Customised Fixed Rate Account
2.00%
5 Year Bond£1000


Business 2 Year Bond
1.70%
2 Year Bond£500


6 Month Fixed Rate Savings Account
1.00%
6 Month Bond£1000


Business 1 Year Saver
0.75%
1 Year Bond£10000


Business 6 Month Saver
0.55%
6 Month Bond£10000


Business 95 Day Saver
0.55%
95 Day£10000
Last Updated: Wednesday 22 November 2017 17:26

Moneyfacts.co.uk Best Buys show the best products chosen by our independent experts. Where we have been able to we have also provided a link for you to open an account today. Products shown with a yellow background are sponsored products.

Eligible deposits with UK institutions are protected by the Financial Services Compensation Scheme up to a maximum level of protection of £85,000 per person per institution.

Disclaimer:
All rates subject to change without notice. Please check all rates and terms before investing or borrowing.
 

Guide to business savings accounts

Running a successful business requires the ability to plan ahead, and having the right business savings accounts (sometimes known as business deposit accounts) can go a long way to shoring up your finances for the future. It’s essential that you have accounts that can fulfil a variety of needs, from a short-term home for your excess funds to a fixed rate bond that can offer long-term growth – you can start your search by looking at our Best Buys and comparing business savings account rates to find the best possible deal.

But first, we take a look at business savings accounts in more detail and the various options available, helping ensure you’re fully informed about this specialist sector of the savings market.

On this page:

  1. What are business savings accounts?
  2. Why should I use a business savings account?
  3. Tax on business savings accounts
  4. Are business savings accounts covered by the FSCS?
  5. What kinds of business savings accounts are available?
  6. How to compare business savings accounts

What are business savings accounts?

Business savings accounts are much like the personal variety in that they allow you to earn interest on excess funds, but they’re solely used by businesses as opposed to individuals. They allow you to squirrel away any surplus funds your business has to grow your pot for the future, perhaps to act as a cash reserve or to save for new equipment and fuel long-term growth.


Why should I use a business savings account?

You may be wondering why you should be using a business savings account instead of a current account. Well, the answer is simple – it’s because business savings account rates are far higher than those that can be found for current accounts, and therefore offer a far better home for any surplus funds

It goes without saying that you’ll still need to make sure you’ve got a suitable current account that can meet your business requirements, and that you’ll need enough left in it to cope with general business expenditure. But why leave any excess cash languishing in it to earn paltry rates of interest? Compare business savings account rates with those of current accounts and you’ll soon see why it’s worth separating your funds.

It’s all about making your money work as hard as possible, which is why you won't want to keep all your funds in your business current account - doing so will mean you're earning next to nothing in interest, so although you’ll need to keep enough in there for effective cashflow, the rest can be put to far better use elsewhere. 


Tax implications:

Tax implications will be different than for individual savers, however, as businesses don’t get a personal savings allowance. All interest is now paid gross, rather than having 20% tax automatically deducted at source, which means you’ll need to notify HMRC of any tax your business owes on its savings interest.


Are you covered by the FSCS:

The fact that these accounts are essentially a business arrangement also means depositor protection may be different. Money held in a business savings account will only fall under the protection of the Financial Services Compensation Scheme (FSCS) if you’re a small business, which means your firm has to meet two of the following criteria:

  1. It has 50 or fewer employees
  2. It has a turnover of £6.5 million or less
  3. It has a balance sheet total of £3.26 million or less

If not, you’re categorised as a larger business, and as such won’t be covered by the scheme (which protects the first £85,000 an eligible business has under a single UK banking licence). Either way, you’ll still need to make sure you’ve got the right account, so knowing what’s out there is vital


What kinds of business savings accounts are available?

Much like with personal savings accounts, those of the business variety can generally be separated into two categories – variable accounts and fixed rate bonds.

BUSINESS VARIABLE SAVINGS

Variable rate accounts are typically easy access or notice varieties, and which one you choose will depend on your business needs. Easy access business savings accounts allow instant access to your funds in case of an emergency, whereas notice versions will require you to give notice to your provider before you can make a withdrawal, the trade-off being that you’ll usually get a better interest rate (however, the key word here is “variable”, which means providers can change the rate of both of these account types at any time).

They each have their benefits – easy access business savings deals allow you to get your hands on any surplus cash instantly, and you’ll generally be able to make as many deposits and withdrawals as you’d like, with most having low minimum balances and few withdrawal restrictions. They don’t pay the most competitive rates, but for flexibility, they can’t be beaten.

Business notice accounts, on the other hand, come with a few more restrictions, with notice periods typically varying from 30 days to 120. Some will allow you to access funds earlier, but there’ll usually be a penalty, often in the form of reduced interest. That’s why it’s important to be truly organised with business notice accounts so you can give the notice period required, but for expenses such as tax bills – when you know the payment date and can plan your withdrawal accordingly – they could be ideal.

It’s important to consider how much access your business might need to any saved funds before choosing an account, or you may want to split your deposits between several options to get the right mix of access and potential returns. You may even be focused on long-term growth and don’t mind keeping a portion of business funds totally out of reach for a few years, in which case business bonds could be ideal.


BUSINESS FIXED RATE BONDS

Business bonds work in much the same way as fixed rate accounts for personal use, in that you can choose between a variety of terms and secure different interest rates accordingly. Generally speaking, the longer you’re willing to lock funds away for, the higher the interest rate you’ll receive, but you’ll need to make absolutely certain you won’t need access to your business’ funds for the duration of any fixed term.

Terms typically range from one to three years, and most providers won’t allow you to make any withdrawals before the maturity date – and if they do, you’ll probably have to pay a hefty penalty. You generally won’t be able to add funds to such accounts, either, which means they’re only suitable for businesses that wish to lock a lump sum away.

The trade-off for this complete lack of flexibility is that the rates on business bonds tend to be far better than their variable rate counterparts, and the rate is guaranteed, too, so you know exactly what your return will be by the end of the term.


How to compare business savings accounts

The key to getting the right business savings account is to compare the options thoroughly, and that means considering everything from the headline rate to the smaller details of the account. Each one comes with different features, but here are a few general things you may want to bear in mind:

  • Does the rate include a bonus? - While the rate offered may seem appealing, make sure to check whether or not it includes a short-term bonus – if it does, you’ll need to re-evaluate the account when the bonus falls away and the rate drops accordingly.
  • Opening restrictions - Take a close look at the opening restrictions to make sure you can benefit from the account – do you meet the turnover criteria, for example, and is your type of company eligible? It’s all about spending time looking at the small print.
  • Access options - Some accounts can only be opened and operated in certain ways – some might be branch-based while others can only be managed by phone or post, for example – so make sure to check that you’re happy with the access options provided by your potential account.
  • Withdrawal restrictions - The withdrawal restrictions will often depend on the type of account you go for, with business bonds typically offering limited access while easy access business savings accounts will often give you unfettered access to your funds. However, these days even some variable rate accounts come with withdrawal restrictions (they may only let you make a certain number of penalty-free withdrawals each year), so make sure to check to ensure you’re not penalised.
  • Minimum balances - Most business savings accounts come with a minimum investment requirement, but some also require you to maintain a minimum balance at all times, otherwise you may miss out on the headline rate.

It’s these kinds of things you’ll need to think about when comparing business savings accounts, and that way, you can make sure you’re getting the deal that meets your needs – but you need to go about it the right way.

Start the process by using our Best Buys. You can use the charts to find the best business savings account rates and products across the market, complete with details of all essential features, helping you to compare the options on a like-for-like basis and ultimately ensure you make the right decision for your business.

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