Fixed-rate business bonds lock a lump sum away at an agreed rate for the full term — usually one or two years — in exchange for a higher return than easy-access savings. None of the accounts below permit withdrawals before maturity. All are FSCS-protected to £120,000 per institution (the limit increased from £85,000 on 1 December 2025).
Rates change frequently. Always verify the current rate with the provider before applying.
| Provider | Rate (Gross/AER) | Minimum | Maximum | FSCS |
|---|---|---|---|---|
| Redwood Bank – 1 Year | 5.05% | £10,000 | £1,000,000 | ✓ |
| Shawbrook – 1 Year | 5.02% | £5,000 | £2,000,000 | ✓ |
| United Trust Bank – 1 Year | 4.99% | £5,000 | £1,000,000 | ✓ |
| Cambridge & Counties Bank – 1 Year | 4.80% | £50,000 | £5,000,000 | ✓ |
| TSB – 1 Year | 4.30% | £1 | £5,000,000 | ✓ |
| Santander Fixed Rate Bond | 3.60% | £10,000 | £5,000,000 | ✓ |
Business Bonds Compared
Redwood Bank 1 Year Business Savings Bond
- Interest Rate: 5.05% Gross/AER (fixed). Interest is calculated daily and can be paid monthly or annually — you choose at the time of opening.
- Access: No withdrawals or closures before maturity. Redwood will contact you in writing at least 21 days before the end of the term. Without instructions by two working days before maturity, funds transfer to a Redwood Call Account (no interest) and are then returned to your nominated account within ten calendar days.
- Minimum Balance: £10,000 minimum; up to £1,000,000 across multiple deposits within the initial funding window.
- Fees: Interest is paid gross — no tax deducted at source. No account maintenance fees are specified.
- Benefits: Highest rate on this page. Suitable for limited companies, partnerships, LLPs, sole traders, charities, associations, clubs, societies, and parish or local councils.
- Eligibility: UK-based businesses able to leave savings untouched for the fixed term. Maximum funding period is 14 days from opening. Up to four authorised users permitted.
- Application: Apply online or by post. All transactions via your nominated account.
- FSCS Protection: Eligible deposits protected to £120,000 per person. Joint accounts covered to £240,000.
Shawbrook Bank 1 Year Fixed Rate Business Bond
- Interest Rate: 5.02% Gross/AER (fixed) when interest is paid annually. Monthly interest option available at 4.91% gross.
- Access: No withdrawals or closures before maturity. At maturity, Shawbrook will communicate reinvestment, withdrawal, or transfer options.
- Minimum Balance: £5,000 minimum; up to £2,000,000 maximum.
- Fees: Interest paid gross. No maintenance fees specified.
- Benefits: Fixed rate for the full term. Suitable for sole traders, limited companies (limited by shares), and general partnerships (not LLPs).
- Eligibility: No more than four shareholders or required signatories. All directors and beneficial owners must be 18 or over, UK residents, and solely UK tax-resident.
- Application: Open and manage online or by phone.
- FSCS Protection: Eligible deposits protected to £120,000. Joint accounts covered to £240,000.
United Trust Bank 1 Year Bond
- Interest Rate: 4.99% Gross/AER (fixed). Interest is calculated daily using the cleared balance and paid on maturity, with an option to have it transferred to your nominated account annually.
- Access: No withdrawals, transfers, or closures before maturity. Without reinvestment instructions, funds move to a 7-day instant access account at United Trust’s prevailing rate before being repaid to your nominated account.
- Minimum Balance: £5,000 minimum; £1,000,000 maximum per account.
- Fees: Interest paid gross. No maintenance fees specified.
- Benefits: Fixed rate for one year. Account managed by email, post, or telephone.
- Eligibility: Available to limited companies, sole traders, education providers, clubs, societies, trusts, credit unions, and pension funds. Requires a transactional UK bank account in the business name as the nominated account.
- Application: Apply by post or online. You have 14 days from submission to fund the account by electronic transfer or cheque.
- FSCS Protection: Protected to £120,000 by the Financial Services Compensation Scheme.
United Trust Bank 2 Year Bond
- Interest Rate: 4.80% Gross/AER (fixed). Interest is calculated daily with the option to receive it annually or have it added to the bond.
- Access: No withdrawals, transfers, or closures before the maturity date. Without instructions, funds will be placed in a 7-day instant access account before repayment to your nominated account.
- Minimum Balance: £5,000 minimum; £1,000,000 maximum per account.
- Fees: Interest paid gross. No maintenance fees specified.
- Benefits: Two-year fixed rate with flexible interest payment options. Managed by email, post, or telephone.
- Eligibility: Same as the 1-year bond: limited companies, sole traders, education providers, clubs, societies, trusts, credit unions, and pension funds.
- Application: Apply by post or online within 14 days to fund the account.
- FSCS Protection: Protected to £120,000 by the Financial Services Compensation Scheme.
Cambridge & Counties Bank 1 Year Fixed Rate Business and Charity Bond
- Interest Rate: 4.80% Gross/AER (fixed). Interest is calculated daily and added to the account at maturity.
- Access: No withdrawals or closures before the term ends. Without instructions before maturity, funds default to an easy-access account at a nominal rate before becoming available for transfer.
- Minimum Balance: £50,000 minimum — not suitable for smaller businesses. Maximum £5,000,000 per account; £10,000,000 per entity across all Cambridge & Counties accounts.
- Fees: Interest paid gross. No maintenance fees specified.
- Benefits: Covers both businesses and charities. Managed online, by phone, or by post.
- Eligibility: Available to academy schools, charitable companies, limited companies, and sole traders based or incorporated in the UK, all liable to pay tax only in the UK. All associated individuals must be 18 or over. Not available to those liable for tax in other jurisdictions or to pension schemes.
- Application: Open with a single deposit from the organisation’s nominated UK bank or building society account, by transfer or cheque.
- FSCS Protection: Protected to £120,000 by the Financial Services Compensation Scheme.
TSB Business Fixed Rate Bonds
TSB offers three fixed-rate bond terms:
- 1 Year Bond: 4.30% Gross/AER (fixed). Interest calculated daily and paid annually on the account anniversary.
- 18 Month Bond: 4.00% Gross/AER (fixed). Interest calculated daily for the full term.
- 2 Year Bond: 3.90% Gross/AER (fixed). Interest calculated daily and paid annually.
- Access: No withdrawals or closures before maturity. Without instructions, funds transfer to an easy-access account at a nominal rate.
- Minimum Balance: £1 minimum — the most accessible entry point on this page. Maximum £5,000,000.
- Fees: Interest paid gross. No maintenance fees specified in the terms.
- Benefits: Multiple term options (12, 18, or 24 months) offer planning flexibility. Very low minimum deposit makes this accessible to smaller businesses.
- Eligibility: UK residents over 18 operating a UK-registered business. Not available to individuals who are currently bankrupt, have County Court Judgements, or are under an individual voluntary agreement.
- Application: Apply online or through the TSB Business Mobile app. You will need business bank account details, business activity information, and personal and business identification documents.
- FSCS Protection: Deposits protected to £120,000 by the Financial Services Compensation Scheme.
Santander Fixed Rate Business Bond
- Interest Rate: 3.60% (fixed). Interest is calculated daily and remains constant throughout the term.
- Access: Funds must remain untouched for the duration of the fixed term.
- Minimum Balance: £10,000 minimum; £5,000,000 maximum.
- Fees: No fees specified. Interest is presumed to be paid gross; tax management is the account holder’s responsibility.
- Benefits: Predictable fixed return. Suitable for existing Santander business customers.
- Eligibility: Available only to existing Santander Business customers with up to two directors, owners (shareholders), or partners. All must be over 18 and UK residents. Eligible business types: sole traders, partnerships, LLPs, and private limited companies.
- Application: Call Santander to enquire about opening. Must be funded with at least £10,000 and left untouched for the agreed term.
- FSCS Protection: Protected to £120,000 by the Financial Services Compensation Scheme.
What Is a Fixed-Rate Business Bond?
A fixed-rate business bond is a savings account that locks a lump sum away for a set period — usually one, two, or three years — at an interest rate agreed on the day you open it. Whatever happens to the Bank of England base rate during the term, the rate on your bond does not move.
The trade-off is total inflexibility. You cannot withdraw early, top up the balance after the initial funding window closes, or close the account before maturity. A few providers will release funds in genuine hardship cases, but most will not — the rate exists precisely because the bank can rely on the deposit being there for the full term.
Bonds suit businesses sitting on cash reserves already earmarked for a future use 12 or 24 months out: a tax bill, a planned expansion, a director’s bonus pool. They are a poor fit for working capital or any money you might need to reach for at short notice.
How Does the Interest Rate on a Business Bond Work?
The rate is fixed on the day you open the account and does not change for the full term, regardless of where the base rate moves. Interest accrues daily on your cleared balance and is paid either monthly, annually, or as a single lump sum on maturity — most providers let you choose at application.
Watch the Gross/AER distinction. The headline rate is usually quoted as AER (Annual Equivalent Rate), which assumes interest is compounded yearly. If you take monthly interest payments instead of letting them compound, the gross rate you actually receive is fractionally lower — Shawbrook, for example, pays 5.02% AER on annual interest but 4.91% gross on the monthly option. Interest is paid without tax deducted at source, so the business is responsible for declaring it.
Who Can Open a Business Bond?
Eligibility varies by provider, but the following entities are typically accepted:
- Limited companies — registered by shares and operating under UK law.
- Sole traders — individuals legally responsible for all aspects of the business.
- Partnerships — two or more individuals sharing management and profits. Some banks exclude LLPs.
- Charities — recognised and registered in the UK (Cambridge & Counties and Redwood accept charities).
- Associations, clubs, and societies — Redwood and United Trust both cover these entities.
- Parish and local councils — accepted by Redwood Bank.
All directors, owners, or partners generally need to be 18 or over and UK-resident. Santander requires applicants to be existing business customers; Cambridge & Counties imposes a £50,000 minimum which rules out smaller businesses. Shawbrook limits eligibility to partnerships (not LLPs) and companies with no more than four shareholders.
Review the specific terms of any provider before applying — conditions differ more than the headline rates suggest.
Should I Lock My Money Away in a Bond?
Three questions decide it.
Can the business genuinely do without this cash for the full term? Run a stress test: imagine a slow quarter, a late-paying customer, and an unexpected tax bill landing in the same month. If that scenario leaves you short without the bond money, it should not go in the bond. Most businesses are better served keeping at least three months of operating costs in an easy-access account before committing anything to a fixed term.
Where do you think rates are heading? Locking in at 5% looks smart if the base rate falls over the next year and easy-access rates drop with it. It looks less smart if the Bank of England raises rates and new bonds start offering 5.5%. Nobody can call this reliably, but shorter terms (one year rather than two) hedge the risk.
Is the uplift worth the lock-up? Compare the bond rate against the best easy-access business rate available today — not the average. If the gap is 0.3 percentage points on £50,000, you are trading total liquidity for £150 a year. If the gap is 1.5 points, it is £750 — a meaningfully different calculation.
Bonds reward discipline, not optimism. Only commit money you are certain you will not need.
Final Verdict
Best overall rate: Redwood Bank (5.05% AER). With a £10,000 minimum and a broad eligibility list covering sole traders, limited companies, partnerships, charities, and clubs, Redwood is the strongest pick for most businesses looking to maximise a fixed-term return. Monthly interest payments are available at a slightly lower gross rate.
Best for smaller minimum deposits: Shawbrook (5.02% AER) or United Trust (4.99% AER). Both accept from £5,000, making them accessible to businesses that cannot meet Redwood’s £10,000 floor. Shawbrook is marginally higher on rate; United Trust offers a wider range of eligible entity types.
Best for larger deposits: Cambridge & Counties Bank (4.80% AER, up to £5 million). The £50,000 minimum rules out smaller businesses, but the rate is competitive and the charity eligibility is a useful inclusion. Santander also accepts up to £5 million but at a lower rate and only for existing customers.
Best for accessibility: TSB (4.30% AER, from £1). The lowest rate on this page, but the only account with a £1 minimum. Worth considering for businesses with smaller cash reserves that still want a fixed-rate return. Three term options (12, 18, or 24 months) add flexibility.
Existing Santander customers: Santander (3.60%). The rate is the lowest here. Only worth considering if the convenience of staying with an existing banking relationship outweighs the rate differential.
FAQs about Business Bonds
Can I access my funds before the maturity date?
No. None of the business bonds on this page permit withdrawals before the maturity date. The fixed rate is offered precisely because the bank can rely on your deposit staying in place for the full term. If you anticipate needing the funds before then, a notice account or easy-access savings account is a more appropriate choice.
What happens when a business bond matures?
The provider will contact you near the end of the term with options: reinvest in a new bond, transfer to another account, or withdraw your capital and interest. If you give no instructions, most providers move your funds to a holding or easy-access account at a lower rate until you decide. Redwood, for example, transfers funds to a non-interest-bearing Call Account before returning them to your nominated account within ten calendar days.
Are there any fees associated with business bonds?
None of the bonds on this page charge account maintenance or opening fees. Interest is paid gross on all of them, meaning no tax is deducted at source — the business is responsible for declaring interest income and paying any tax owed. Review the specific terms before applying, as conditions can vary.
Is my investment in a business bond protected?
Yes. All providers on this page are covered by the Financial Services Compensation Scheme (FSCS), which protects eligible deposits to £120,000 per business entity per institution. The limit increased from £85,000 to £120,000 on 1 December 2025. If you hold bonds with more than one provider, each institution’s limit applies separately.
Can I hold multiple business bonds?
Yes. Businesses can hold bonds with multiple providers simultaneously, and the FSCS limit applies per institution — so splitting large deposits across two FSCS-covered banks can protect up to £240,000 in total. Some providers impose per-entity caps: Cambridge & Counties limits deposits to £10,000,000 in total across all accounts with them. Check individual terms before committing.
How is interest from a business bond taxed?
Interest from business bonds is paid gross — no tax is deducted at source. The business must declare this interest and pay any tax owed as part of its normal tax return. The applicable rate depends on the business structure (company, partnership, sole trader) and current legislation. Speak to your accountant if you are unsure how bond interest should be reported for your business.
Can a business bond be used as collateral for a loan?
This varies by provider and bond type. Some institutions may allow it, but the inflexibility of a fixed-term bond — which cannot be accessed or closed early — makes it a poor fit for loan collateral in most cases. Check with the provider directly if you anticipate needing to use the bond in this way before committing.
Methodology and Disclosure
BusinessExpert compares business bond providers by checking rates, minimum and maximum deposit limits, FSCS protection status, term options, interest payment frequency, and eligibility criteria directly against provider websites and published terms and conditions. We do not accept payment from providers in exchange for a higher ranking or more favourable editorial treatment. Where a link generates a referral fee, this is disclosed clearly on the relevant page.
Rates on this page were verified in May 2026 against each provider’s published savings terms. Rates change frequently and without notice. Always verify the current rate directly with the provider before applying — particularly for Gross/AER distinctions and any differences between annual and monthly interest payment options.
FSCS protection figures reflect the current statutory limit of £120,000 per eligible depositor per authorised institution, following the increase from £85,000 on 1 December 2025. Joint accounts are covered to £240,000 (£120,000 per person). Protection applies to eligible deposits only and does not cover investments or sums held with non-authorised firms.
None of the providers featured on this page are current affiliate partners of BusinessExpert. Provider links go to the relevant product page on each institution’s own website.