What is a business savings accounts?

A business savings account will usually earn more interest than a business bank account and are available as easy access, notice or for a fixed term. Business savings accounts don’t charge a monthly fee like some business current accounts. View today's best rates below or read our guide to business savings accounts to learn more. 


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Hampshire Trust Bank Logo
Hampshire Trust Bank 3 Year Business Bond (Issue 16) FSCS logo
FSCS logo
AER
2.10%
Notice / Term
3 Year Bond
Deposit
£5,000
Account Type
Business Fixed
Interest Paid
Anniversary
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 29/05/2019
Interest Type Fixed Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Limited Liability Partnership Not for profit organization Partnership Public Limited Company Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 2.10% paid at £5K
AER 2.10% paid at £5K

Information

Minimum Opening Amount £5,000
Maximum Investment £750,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Masthaven Bank Logo
Masthaven Bank 5 Year Fixed Term Bond FSCS logo
FSCS logo
AER
2.10%
Notice / Term
5 Year Bond
Deposit
£5,000
Account Type
Business Fixed
Interest Paid
Anniversary
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 26/09/2019
Interest Type Fixed Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 2.10% paid at £5K
AER 2.10% paid at £5K

Information

Minimum Opening Amount £5,000
Maximum Investment £500,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Redwood Bank Logo
Redwood Bank 1 Year Business Savings Bond (Issue 2) FSCS logo
FSCS logo
AER
2.00%
Notice / Term
1 Year Bond
Deposit
£10,000
Account Type
Business Fixed
Interest Paid
Anniversary
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 02/09/2019
Interest Type Fixed Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Limited Liability Partnership Partnership Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 2.00% paid at £10K
AER 2.00% paid at £10K

Information

Minimum Opening Amount £10,000
Maximum Investment £1,000,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Redwood Bank Logo
Redwood Bank 1 Year Business Savings Bond (Issue 2) FSCS logo
FSCS logo
AER
2.00%
Notice / Term
1 Year Bond
Deposit
£10,000
Account Type
Business Fixed
Interest Paid
Monthly
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 02/09/2019
Interest Type Fixed Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Limited Liability Partnership Partnership Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 1.98% paid at £10K
AER 2.00% paid at £10K

Information

Minimum Opening Amount £10,000
Maximum Investment £1,000,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Masthaven Bank Logo
Masthaven Bank 18 Month Flexible Term Saver FSCS logo
FSCS logo
AER
1.85%
Notice / Term
18 Month Bond
Deposit
£5,000
Account Type
Business Fixed
Interest Paid
Anniversary
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 03/12/2018
Interest Type Fixed Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 1.85% paid at £5K
AER 1.85% paid at £5K

Information

Minimum Opening Amount £5,000
Maximum Investment £500,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Hampshire Trust Bank Logo
Hampshire Trust Bank 2 Year Business Bond (Issue 25) FSCS logo
FSCS logo
AER
1.81%
Notice / Term
2 Year Bond
Deposit
£5,000
Account Type
Business Fixed
Interest Paid
Anniversary
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 04/10/2019
Interest Type Fixed Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Limited Liability Partnership Not for profit organization Partnership Public Limited Company Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 1.81% paid at £5K
AER 1.81% paid at £5K

Information

Minimum Opening Amount £5,000
Maximum Investment £750,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Masthaven Bank Logo
Masthaven Bank 1 Year Fixed Term Bond FSCS logo
FSCS logo
AER
1.80%
Notice / Term
1 Year Bond
Deposit
£5,000
Account Type
Business Fixed
Interest Paid
On Maturity
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 03/12/2018
Interest Type Fixed Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 1.80% paid at £5K
AER 1.80% paid at £5K

Information

Minimum Opening Amount £5,000
Maximum Investment £500,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Hampshire Trust Bank Logo
Hampshire Trust Bank 1 Year Business Bond (Issue 29) FSCS logo
FSCS logo
AER
1.76%
Notice / Term
1 Year Bond
Deposit
£5,000
Account Type
Business Fixed
Interest Paid
On Maturity
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 04/10/2019
Interest Type Fixed Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Limited Liability Partnership Not for profit organization Partnership Public Limited Company Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 1.76% paid at £5K
AER 1.76% paid at £5K

Information

Minimum Opening Amount £5,000
Maximum Investment £750,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Redwood Bank Logo
Redwood Bank 95 Day Business Savings Account (Issue 4) FSCS logo
FSCS logo
AER
1.75%
Notice / Term
95 Day
Deposit
£10,000
Account Type
Business Variable
Interest Paid
Anniversary
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 02/09/2019
Interest Type Variable Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Limited Liability Partnership Not for profit organization Partnership Public Limited Company Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 1.75% paid at £10K
AER 1.75% paid at £10K

Information

Minimum Opening Amount £10,000
Maximum Investment £1,000,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Redwood Bank Logo
Redwood Bank 95 Day Business Savings Account (Issue 4) FSCS logo
FSCS logo
AER
1.75%
Notice / Term
95 Day
Deposit
£10,000
Account Type
Business Variable
Interest Paid
Monthly
Go To Provider's Site
Account Information
Application Criteria
Access
Rates
Information
Additional Information

Account Information

Account Available From 02/09/2019
Interest Type Variable Rate
Account Management
Post
Branch
Internet
Telephone
Mobile App

Application Criteria

Minimum Turnover N/A
Maximum Turnover N/A
Available To
Limited Company Limited Liability Partnership Not for profit organization Partnership Public Limited Company Sole Trader

Access

Withdrawals Allowed
Early Access Allowed
Access Note N/A
Further Additions Allowed

Rates

Rate 1.74% paid at £10K
AER 1.75% paid at £10K

Information

Minimum Opening Amount £10,000
Maximum Investment £1,000,000
Min Age N/A
Max Age N/A
Taxation -

Additional Information

N/A
Note

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.

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Ask us anything?

A guide to business savings accounts

nigel woollsey

Nigel Woollsey

Online Writer

At a glance

  • Business savings accounts are available to all types of businesses, enabling them to save their surplus funds and earn interest.
  • Some accounts are only available to specific business sectors such as charities or solicitors.
  • As with personal savings accounts, you can choose between fixed rate bonds, notice accounts and easy access accounts.
  • Business savings accounts offer better rates of interest than business current accounts

Why should I use a business savings account?

Business savings accounts have higher interest rates than business current accounts, and therefore offer a far better return on any surplus funds your business might have. A business savings account can ensure you're prepared for any kind of crisis that may hit your company, whether it's late payment issues, losing a key member of staff and sales suffering as a result, or needing to replace the building's heating system (for example).

You should consider how quickly you might need access to these funds. If your cashflow is healthy then you might want to tie your money into a fixed rate business bond. This will pay you a higher rate of interest but will not allow you to access the funds until the fixed term period has expired. This usually starts at a year going up to five years, although much shorter terms of one, three, six and nine months are also available. If you think you may need to regularly access your business savings, then a business easy access account could be more suitable. Meanwhile, a business notice account can provide a happy medium, allowing better rates of interest than an easy access account but with the requirement to give between seven days’ notice up to 180 days’ notice.

Compare business savings account rates with those of business current accounts and you'll soon see why it's worth separating your funds.

Why should I choose a business savings account instead of a personal one?

If you run a limited company, the business is its own entity and is separate from your personal finances. As such, you can't put cash from that business into a personal savings account – and in doing so, into your own name – as it would likely trigger various tax implications. Therefore, you need a business savings account that's specifically for your business' funds.

The exception to this would be if you're a sole trader. In this case, you and your business are one and the same and you'd be able to save business cash in a personal account – the business is solely in your name and essentially all money you receive from that business is yours, though it could still be wise to have a separate account for any savings you want to keep for business purposes.

Are business savings accounts covered by the FSCS?

The Financial Services Compensation Scheme (FSCS) is available to some business customers of banks that hold a UK banking licence (note a single licence could cover multiple brands). Deposits of financial organisations, public authorities and local authorities are not covered, but generally micro, small and medium-sized businesses should be covered. To find out more about depositor protectionread to our guide on the subject.

What kinds of business savings accounts are available?

Business account type

Interest rate type

Access period

Fixed rate/term bonds

Fixed for the set term

No access – if access is permitted a penalty and/or closure of the account may result if you need to get your funds before the term ends

Notice accounts

Variable – can be changed at any time

Starts from seven days’ notice

Easy access

Variable – can be changed at any time

No notice required, but there may be limits on the number of withdrawals

Occasionally, business easy access accounts include a short-term bonus rate. This means that for a set period of time you will earn a higher rate of interest than the standard savings rate. Once the term has expired the rate will drop; sometimes this can be a significant difference in rate. So, it’s a good idea to compare business savings rates before your bonus is due to expire.

Variable business savings

Variable rate business savings 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 (or result in loss of interest) before you can make a withdrawal, the trade-off being that you'll usually get a better interest rate – however, the keyword here is 'variable', which means providers can change the rate on both of these account types at any time.

They each have their benefits – easy access savings accounts 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 varying from seven days, but more commonly 30 days to 120 days. 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 vary from one to five years although a more limited number of products is available outside this range but note it’s very rare that providers will allow you to make any withdrawals before the maturity. 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 savings 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 are business savings taxed?

All interest earned on business savings accounts is paid gross, which means that you'll need to account for any interest received so it is taxed appropriately. The tax you need to pay will depend on your business type and the interest you earn.

Sole traders use the personal tax allowance to calculate what, if any tax they need to pay on their savings. For the 2019/20 tax year, any interest earned over £12,500 is liable for tax at your personal tax rate. You should be ready to state how much interest you have earned in your annual self-assessment tax return. This is due by 31 January following your tax-year end.

Limited companies pay corporation tax, this is applied to any profits the business earns. Any interest earned on any business savings is included in your profit calculations. The tax you will need to pay is based on your financial year-end statement.

Can businesses have savings accounts?

Businesses can have as many savings accounts as they wish, as long as they meet the requirements of the bank or building society they want to open the account with. Many banks stipulate in their savings accounts terms and conditions that personal savings accounts should not be used by businesses, whether you are a sole trader or a large limited company.

Things to consider when looking for a business savings account

The key to getting the best business savings account for your specific business 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 interest rate include a bonus?

Occasionally, business savings accounts include a bonus rate – usually on easy access accounts. This is an additional rate of interest applied in addition to the main interest rate. It lasts only for a set period. After this you will only earn the main rate. Also remember that easy access accounts are usually a variable interest rate and the main rate (and possibly the bonus unless it is fixed) could be reduced at any time by the savings provider. 

What are the opening restrictions?

Some business savings accounts are only available to specific types of business. For example, an account may only be eligible to a limited company or a sole trader. In other cases, it may only be open to certain sectors of business, such as charities or client accounts for solicitors.

How can you open and access a business savings account?

Many business savings accounts can now be opened and managed online. This makes them as convenient and easy to use as you would expect from your business current account. However, there are some providers in the market who still only accept postal applications and instructions by phone or in writing. It may also be that you would prefer to have a branch-based relationship with your business savings provider, and generally the main high street banks and some building societies can offer this service.

What are the withdrawal restrictions?

The withdrawal restrictions depend on the type of business savings account; business fixed rate bonds typically offer no (or very limited) access during the fixed term, while easy access business savings accounts do not require any notice to make withdrawals. Notice accounts will allow withdrawals but only with the correct notice given (or a loss of interest penalty will likely be applied). Some easy access accounts may place a limit on the number of withdrawals you can make each year.

What is the minimum balance to open a business savings account?

Most business savings accounts come with a minimum investment requirement for both the opening and for the lifetime of the savings account. This can range from as little as a £1 for an easy access account, with notice accounts from £100 and fixed rate bonds at £1,000 and above.

Do business current accounts earn interest?

Business current accounts earn low or sometimes no interest at all for credit balances. Business savings accounts earn higher rates of interest and can bring better returns to your business compared to leaving these funds in your business current account.

What is a business deposit account?

Business deposit accounts (or investment accounts) are a type of savings account that allow your business to earn interest on lump sums or regular amounts of money paid into the account. There may be a notice period you need to provide to make withdrawals. If you don't give the required notice you could be penalised, usually by a loss of interest.

No notice business deposit accounts (also known as instant or easy access accounts) are suitable if you want to avoid being penalised for making unscheduled withdrawals. However, higher rates of interest can be obtained on notice accounts, so if you can take a longer-term view of withdrawals, this may better for your business. Notice periods are typically seven, 30, 60 or 90 days, although some accounts stipulate other periods. As a general rule, the longer the notice period, the higher the interest rate.

Moneyfacts tip

Moneyfacts tip nigel woollsey

If you want to earn the best rates of interest for your business funds, then look to open a business fixed rate bond. The rates are typically higher although you won’t be able to access you funds for usually at least a year.

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