Business Savings Accounts

Business Savings Accounts

Compare Best UK Business Saving Accounts

Account
Nationwide 95 Day Notice Business Savings
Interest Rate
1.10%
Gross/AER
Term
95 Day Notice
Minimum Deposit
£5,000
Account
Aldermore Easy Access Business Savings
Interest Rate
1.00%
Gross/AER
Term
Easy Access
Minimum Deposit
£1,000
Account
Nationwide 45 Day Notice Business Savings
Interest Rate
0.85%
Gross/AER
Term
45 Day Notice
Minimum Deposit
£5,000
Account
Nationwide Instant Saver Business Savings
Interest Rate
0.65%
Gross/AER
Term
Instant Access
Minimum Deposit
£5,000
Account
Nationwide Business 5 Year Fixed Rate Saver
Interest Rate
1.75%
Gross/AER
Term
5 Years
Minimum Deposit
£5,000
Account
Aldermore Bank 1 Year Business Fixed Rate Bond
Interest Rate
1.70%
Gross/AER
Term
1 Year
Minimum Deposit
£1,000
Account
Nationwide Business 3 Year Fixed Rate Saver
Interest Rate
1.40%
Gross/AER
Term
3 Years
Minimum Deposit
£5,000
Account
Aldermore Bank 6 Month Business Fixed Rate Bond
Interest Rate
1.15%
Gross/AER
Term
6 Months
Minimum Deposit
£1,000
Account
Nationwide Business 2 Year Fixed Rate Saver
Interest Rate
1.10%
Gross/AER
Term
2 Years
Minimum Deposit
£5,000
Account
Nationwide Business 1 Year Fixed Rate Saver
Interest Rate
0.80%
Gross/AER
Term
1 Year
Minimum Deposit
£5,000
Account
Nationwide Business 6 Month Fixed Rate Saver
Interest Rate
0.75%
Gross/AER
Term
6 Months
Minimum Deposit
£5,000

Business Savings Accounts are provided by most UK bank and building societies ranging from business instant access accounts to business notice accounts. Some providers also offer business savings bonds which have a fixed savings term.

A business savings account differs from a current account in that it is not used for day to day transactions and therefore the account provider will generally pay interest for money held in the savings account. A business savings account can run along side a current account and with internet banking moving money from a current to a savings account is now fairly straightforward process.

As with many business deposit accounts the terms offered will depend on how much you are looking to deposit the notice period terms, if any, interest payment terms and with some accounts your business turnover. The best high yield business accounts tend to be operated on an online basis where operating costs are kept to a minimum by providers.

For many businesses keeping cash that is not used as immediate working capital in a current account is normally better off in a business savings account. A business savings account will pay interest on either a monthly, quarterly, half yearly or annual basis.

Business savings accounts can be set up by a business with different notice periods to benefit from higher rates of interest e.g. an instant access savings account, a 30 day business notice account and a 180 day business savings account all provide could be used. There are many bank and building society providers who will happily pay competitive rates of interest for the privilege of holding business savings. As a general observation the main high street banks who hold most business savings pay interest at the lower end of the spectrum.

For notice accounts up to 180 days interest rates can be considerably higher, so for businesses that can plan their cash requirements ensuring you are maximising interest through using high yield business accounts should be considered. Depending on the business deposit account interest payment ranges from monthly, quarterly, half yearly to yearly.

For business owners concerned about what happens if the bank or building society holding their money fails, there is protection under the Financial Services Compensation Scheme (FSCS) for smaller businesses. As an indicative guide smaller businesses are protected as long as it meets two of the following criteria: 1. Turnover is not more than £6.5 million 2. Balance sheet total is not more than 3.26 million 3. No more than 50 employees.

Business Instant Access Savings Accounts

Where money can be accessed without any interest penalty charge. The withdrawals process may differ from provider to provider. Some banks or building societies allow you to transfer funds direct into your current account online, while others require a postal or telephone process. Depending on how quickly you need access to funds this should be considered when you select the account right for your business.

Business Notice Savings Accounts

Range from 7 day notice to 180 day notice and will offer higher rates of interest. Interest penalties will generally apply if money is withdrawn within the notice period.

Business Saving Bonds

Are designed for businesses who can tie up money for a set period typically ranging from 6 months to 5 years. These business fixed rate bonds pay attractive levels of interest but you need to be confident capital can be committed for the duration. Often a high minimum balance will apply for these types of longer term business savings bonds.

Alternative Business Savings Plans

As an alternative to business saving bonds you may wish to consider structured deposit plans which range in term from 3 to 6 years. Structured deposit plans normally have their return linked to the stockmarket and therefore can offer higher potential returns than cash. With these plans returns are not guaranteed and there are usually charges for withdrawing capital early.

There is a wide range of business savings account deals to choose from so we have listed some of the features to look out for:

  • Minimum business savings deposits – some business savings accounts require a minimum level of funding
  • Business Savings Access – Depending on the business savings account access will be through the branch, online telephone or post. Some accounts are only available to businesses based in a local areas or regions. Restrictions may apply depending on business turnover
  • Business Savings Interest – some savings account providers will pay interest monthly and others quarterly, half yearly or annually
  • Business Savings Withdrawal Penalties – Generally speaking the longer you can lock your surplus business cash away the better the interest rate you can expect to get. If you need access to your money at short notice interest penalties may apply. Some providers will allow a limited number of penalty free withdrawals a year
  • Savings Protection for Businesses – The Financial Services Compensation Scheme (FSCS) was mainly set up to protect individuals. However some businesses are covered. As an indicative guide to qualify for the scheme a business must meet two of the following criteria to qualify for the FSCS depositer scheme; (a) turnover no more than £6.5 million (b) Balance sheet not more than £3.26 million (c) Total number of employees no more than 50
  • Online Access – A number of business savings providers offer online access and the option of linking your current account to your savings account. This not only makes management easier but also provides an additional security feature

With interest rates at the time of writing at an all-time low the impact in real terms of inflation on your money is not to be underestimated in eroding the buying power of a company’s cash. Use our business savings comparison tables to ensure you get a good savings rate. We also provide selected market leading savings accounts for personal use.

When trying to save money for the future, there are several options open to cash savers. Options include instant access savings accounts, easy access savings accounts, notice savings accounts, fixed rate bonds and structured deposit plans.

With interest rates at the time of writing at all time lows many savers are looking for a range of best saving plans. For savers who are prepared to tie up capital for a year or more typically higher rates of interest are available from savings providers.

A fixed rate bond is a way of gaining a fixed rate of higher interest on your savings for a fixed period of time, typically between one and five years. Generally speaking the longer your savings can be locked away, the higher the interest rate you can get on your money. Some providers offer fixed rate bonds within a Cash ISA so you benefit from tax free interest returns.

Providers normally have a minimum subscription age of 18 but some providers offer options to younger savers.

Normally there is a minimum commitment for depositing money into a fixed rate bond – usually around £1,000, but this can be more. This makes bonds unsuitable for those who wish to top up a savings account in small increments, as this is not usually possible beyond the first lump sum, therefore could look into alternative savings and investments plans.

Having a fixed term means that bonds have a maturity date at which time you will be contacted by your savings provider and provided with options on how you wish your money to be returned to you – you may be given options of putting the money into a new account in which case you should always shop around before accepting a savings deal offered by an existing provider as the rate of interest may or may not be competitive.

Product providers do not normally allow you to access your money during the term and if they do there are normally conditions which may involve a loss of interest so ensure you read the small print before you sign up. Some fixed interest providers will allow one withdrawal a year without penalties.

Interest paid on your savings is treated as income and you may have to pay tax on it depending on your circumstances. If you don’t pay tax you can receive interest gross if you complete HMRC tax form R85. Some accounts will pay interest gross and it is up to you to declare any tax owed to the Inland Revenue.

Fixed rate bonds are cash deposit based and you will get back your original deposit plus any interest owed unless the bank or building society gets into serious financial difficulty. In the unlikely event that this happens the Financial Services Compensation Scheme would pay compensation of up to £85,000 per account holder per authorised institution.

The length of time that savers choose to deposit their money depends on personal financial time frames and other budget and savings considerations. If you need rapid access to your cash, bonds are possibly not the best savings option – it might be preferable to look at an alternative savings options or just an instant access savings accounts.

Minimum deposits can vary from £500 to over £2000. Make sure that you are happy to part with that amount of money for a longer period of time! It is worthwhile having a five-year plan of projected expenses – such as mortgages, car purchases, or planning for a family or retirement – to ensure that you will not need access to your fixed rate bonds account.

Withdrawals are either not permitted or restrictions will apply. Read the provider terms and conditions so that you know what you are getting into. Some providers for example will allow one withdrawal during the term without penalties.

The payment of interest can also vary- some offer monthly interest, others quarterly or annually, and some only pay at the end of the agreed term. Choose a product that fits in with your requirements for the best rates of high interest.

Tax is payable on interest accrued unless you are a non tax payer in which case you can receive interest gross if you complete HMRC tax form R85. Alternatively it is often possible to take a Cash ISA fixed rate bond (current cash ISA allowance for 2018/19 is £20,000 per individual) from which interest can be taken tax free.

If you have cash ISAs from previous tax years you may be able to transfer to a new Cash ISA provider offering a fixed rate bond cash ISA deal.

Please note that this information is based on current law and practice which may change at any time.

1. Consider all options – from instant access to fixed rate bonds to instant access options – All have advantages and disadvantages when trying to build a nest egg for the future.

2. Check the market – shop around to find the right savings plan for you. Interest rates are changing all the time and deals come and go on a regular basis.

3. Make sure you find a product that works for you –  The choice of bond is dependent on the amount of money you intend to deposit, the fixed rate, and the length of the fixed rate period. Whether you want the account to be operated on an online account basis, postal basis or telephone basis. These should all be taken into consideration before making your choice. Read the savings provider terms and conditions carefully.

4. Read the fine print – determine when the provider is likely to let you access your money, how much notice is required, and if there are any penalties for requesting access before the bond matures.

5. Some deals require you to have the interest paid into a current account – check the small print.

6. Check the small print on how interest is paid –  If monthly or annually this will be need to be declared if you submit a tax return. If interest is paid on maturity this may be useful for tax planning purposes.

7. Many deals require you to have internet access –  Some are offered on a postal or branch basis – check the small print.

8. Check that your money is covered by the Financial Services Compensation Scheme – they will guarantee £75,000 of savings against institutional failure. Most UK banks should have this cover, but Irish banks that do not have a UK arm may not be covered by the FSCS.

9. Check what happens when your savings product matures – Providers will write to you when your account matures; if you do not respond the provider will often put your savings into a low or no interest holding account until you provide instructions on what you want to do with the money. It is therefore important to diarise the maturity of your bond and have in mind what you want to do with the money.

10. What is the tax treatment if you are a non taxpayer – If you are not a tax payer many providers will pay interest gross on submission of the relevant HMRC tax form.