Written by Oliver Roylance-Smith
20th June 2013

Latest business savings accounts deals

If you run a business, you could benefit from placing any money that’s not being used in a specialist business savings account.

Cash that is not currently required as capital will usually generate more interest in a business savings account than in a business current account.

See below for a selection of business savings accounts that could be worth considering this month.*

Latest easy access account deals

If you don’t want to tie up potential business capital for too long, an easy access account might be for you. Currently, Aldermore is offering an account which could be a suitable choice if you want to open a business savings account but think you might need fast access to your capital at a later date. This account pays 1.50% gross/AER. Withdrawals are free and can be made online. They are unlimited as long as you maintain a minimum balance of £1,000 in your account at all times – bear in mind that an interest rate of 0.05% AER is payable on balances below £1,000.

Latest notice access account deals

You may be able to gain a slightly higher rate of interest – without too much restriction on withdrawals from your account – if you open a notice account. Manchester Building Society currently offers a 45-day account with a rate of 1.60% AER/gross, paid annually. This account is available to business customers with deposits ranging from £10,000 to £75,000.

Latest fixed rate bond deals

For those looking to save for a longer period of time, Principality is currently offering two business fixed rate bonds, which are exclusively available through Fair Investment Company. Both bonds require a deposit of between £10,000 and £5 million. The Intermediary 9-Month Business Bond offers a rate of 1.05% AER fixed with a minimum deposit of £10,000. For those looking to tie up cash for a little longer, the 18-Month Business Bond offers 1.25% AER fixed. To apply for either of these plans, you must be a register business in England or Wales.

If you want to tie up your cash for a little longer in return for a higher rate of interest, Cater Allen is currently offering a 3 year fixed rate business bond with an interest rate of 1.80% AER/gross, paid out at the end of the term.

AER – Stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. (As every advertisement for a savings product which quotes an interest rate will contain an AER, you will be able to compare more easily what return you can expect from your savings over time)

Latest fixed rate bond alternatives

If you are prepared to tie up cash for a set period, you might be interested in an alternative to a fixed rate bond known as a structured deposit plan. This type of plan typically lasts for a three to six year term, and could offer higher returns than a traditional fixed rate bond. Structured deposit plans offer returns that are linked to the performance of an Index such as the FTSE 100. Your capital is not put at risk, but any returns are not guaranteed as they are dependent on market performance.

Societe Generale offers business customers a six year deposit plan which aims to repay your initial deposit after six years and also provide returns based on the performance of 5 blue chip FTSE 100 stock market listed companies: The plan aims to return 7% for each year that all 5 shares finish at their starting value or higher. An alternative 6 year plan is on offer from Legal & General, which aims to return 125% x any rise in the FTSE, capped at 35%. This plan offers a low minimum deposit of £500, and is capital protected.

These are structured deposit plans and are capital protected. There is a risk that the company backing the plan or any company associated with the plan may be unable to repay your initial investment and any returns stated. In this event you may be entitled to compensation from the Financial Services Compensation Scheme (FSCS), depending on your individual circumstances. In addition, you may not get back the full amount of your initial investment if the plan is not held for the full term. The returns from structured deposits are not guaranteed. The past performance of the FTSE 100 Index and any companies listed on the FTSE 100 Index is not a guide to future performance.

No news, feature or comment should be seen as a personal recommendation to invest. If you are at all unsure of the suitability of this type of investment, both in respect of its objectives and its risk profile, you should seek independent financial advice.
* Data accurate as of 17/06/2013.