Choosing the best business savings account can be crucial for effective financial planning.

However, researching providers can be confusing and time-consuming with so many savings account options. 

Whether you need fixed returns or withdrawal flexibility, this article aims to help you find the best business savings account for your financial goals.

Pros and Cons of Having a Business Savings Account

Pros:

  1. Earn Interest: Money held in a business savings account grows over time, providing an additional source of income for your business.
  2. Range of Accounts: Several types of business savings accounts are available, catering to a wide range of needs, including instant access.
  3. Security: Business savings accounts are typically securely held at banks or financial institutions regulated, insured, and covered by FSCS.
  4. Separate Funds: Keeping your business savings in a different account than your everyday operating funds helps you stay organised and avoid mixing business and personal finances. 
  5. Financial Planning: A dedicated savings account allows you to plan for future expenses or opportunities like new equipment or expansion.
  6. Risk Management: Business savings accounts provide a low-risk option for managing excess cash flow and mitigating financial risks. Keeping some of your funds in a liquid and secure savings account protects your business from unexpected cash flow disruptions, market volatility, or unforeseen circumstances that could impact your revenue streams.
  7. Building Creditworthiness: Lenders and creditors may view businesses with adequate savings as less risky and more reliable borrowers, potentially improving your access to financing, better loan terms, and favourable interest rates when needed for future investments or expansion projects.

Cons:

  1. Lower Interest Rates: Unlike other investments, such as stocks or bonds, business savings accounts typically offer lower interest rates, meaning the returns may be modest compared to higher-risk investments.
  2. Fees: Some business savings accounts may have costs, such as monthly maintenance or transaction fees, which can reduce the overall return on your savings.
  3. Inflation Risk: If the interest rate on your business savings account is lower than the rate of inflation, the real value of your savings may decrease over time in terms of what they can buy.
  4. Opportunity Cost: By keeping your money in a business savings account, you may miss out on potentially higher returns from other investment opportunities. 
  5. Tax Considerations: While interest earned on business savings accounts is typically taxable as income, the after-tax return may be lower than expected, especially if your business falls into a higher tax bracket. Additionally, if your business savings exceed certain thresholds, you may be subject to additional taxes or reporting requirements, affecting your overall net returns.

What are the Best Savings Accounts for Businesses? The Verdict in 60s

The best business savings account depends on how much you want to save and how frequently you need access to your savings.

However, we have included our best picks of the bunch below when considering a fixed-term, easy access and notice account, along with an the alternative to a traditional savings account.

The Allica Bank 12-Month Fixed-Term Savings Account offers an excellent fixed interest rate of 5.15% AER, ideal for businesses looking for guaranteed returns over a set period. However, a minimum deposit of £20,000 won’t suit businesses with a small lump sum. 

The Tide Business Savings Account gives greater flexibility, allowing you to access your savings whenever possible. With a variable interest rate of 3.81% AER, a minimum balance of £1 and no maximum limit, it’s ideal for businesses with restricted cash flow. However, deposits that can earn interest are capped at £50,000, and you must be a Tide business customer to apply for the account. Whilst a free current account is available, this could be a disadvantage if you don’t want to open multiple current accounts with different providers. 

The United Trust Bank Business 180-Day Notice Base Rate Tracker Account offered a higher interest rate than the other providers featured in this article, standing at 5.25% AER (variable). Unlike a fixed-term savings account, you can withdraw after giving 180 days’ notice, giving you flexibility for unexpected expenses. However, there’s currently no online banking facility, which may make managing your account inconvenient.

Wise Interest offers a competitive alternative to traditional savings accounts. It acts similarly to an easy-access savings account, with immediate access to your funds. There’s no minimum or maximum balance, and it offers a high variable interest rate of up to 3.67% to 5.05%, depending on which currency you hold your savings in. However, several fees make this business savings option less cost-effective, and you’ll need a Wise business account to access this feature.

Who should consider a business savings account:

  • Businesses with surplus cash: Companies that often have excess cash sitting idle can benefit from the interest accrued in a business savings account, making their money work for them.
  • Firms with financial stability: Businesses that have covered their immediate expenses and have predictable cash flow patterns are well-suited to take advantage of savings accounts.
  • Entrepreneurs planning for future expenses: Saving for planned future expenditures, such as expansion or equipment upgrades, can be more effective with the added interest from these accounts.

Who should not consider a business savings account:

  • Businesses with high-frequency transactions: If your business requires frequent access to its funds for daily operations, the typical transaction limits often seen in some types of a savings accounts might be too restrictive for your needs.
  • Start-ups with fluctuating cash flow: New businesses or those experiencing variable cash flows might find the limitations on withdrawals and the potential fees for not maintaining a minimum balance challenging.

All Our Best Business Savings Accounts at a Glance

Account NameTypeInterest RateOur RatingLearn More
Allica Bank’s 12-Month Fixed-Term Savings AccountFixed-Rate5.15% AER (fixed)4.4 / 5★Apply now
Tide’s Business Savings AccountEasy Access3.81% AER (variable)4.3 / 5★Apply now
Monzo’s Business Instant Access SavingsEasy Access1.6% AER (variable)4.3 / 5★Apply now
Wise InterestInvestment FundUp to 3.67% – 5.05% (variable)4.2 / 5★Apply now
Aldermore’s 1-Year Fixed Rate Business Savings AccountFixed-Rate4.51% AER (fixed)4.1 / 5★Apply now
United Trust Bank’s Business 180-Day Notice Base Rate TrackerNotice5.25% AER (variable)3.7 / 5★Apply now
Virgin Money’s 1 Year Business Fixed Rate Savings AccountFixed-Rate5.05% AER (fixed)3.5 / 5★Apply now
NatWest’s 95-Day Liquidity ManagerNotice4.25% AER (variable)3.3 / 5★Apply now
HSBC’s Business Money Manager Easy AccessEasy Access1.93% – 1.96% AER (variable)3.2 / 5★Apply now
Lloyds Bank’s 95-Day Notice AccountNotice4.08% AER (variable)3.2 / 5★Apply now
Barclays’ Business Premium AccountEasy Access1.5% – 1.96% AER (variable)3.1 / 5★Apply now

Allica 12-Month Fixed-Term Savings Account

Allica Bank’s 12-Month Fixed-Term Savings Account
Interest: 5.15% AER (Fixed)Term: 12 monthsBalance: £20,000 to £2 million
Visit Allica Bank

Best For: businesses with a large lump sum who want predictable growth.

Pros

  • High Fixed Interest Rate: The account offers a competitive fixed interest rate of 5.15% AER for the 12-month term, providing predictable growth for savings.
  • No Monthly Fees: There are no monthly account fees, allowing businesses to maximise their returns without additional costs.
  • Wide Range of Savings: Businesses can save between £20,000 and £2,000,000, accommodating various financial capacities.
  • Accessibility: The account can be conveniently applied for and managed online through the Allica website.
  • Customer Reviews: Allica Bank has an ‘excellent’ average Trustpilot rating of 4.4 out of 5, indicating positive customer experiences and satisfaction.
  • FSCS Protection: Eligible savings up to £85,000 are covered by the Financial Services Compensation Scheme. 

Cons

  • No Withdrawals: Businesses cannot access funds or close the account until maturity at 12 months, making it unsuitable for those with restricted cash flow or needing access to savings for unexpected costs.
  • No Cooling-off Period: You can’t change your decision to open the account after it has been initiated.
  • Limited Customer Support Hours: You can only contact customer service by e-mail, live chat, online banking or phone Monday to Friday (excluding Wednesday) from 9 am to 5 pm and Wednesday from 9 am to 5 pm.
  • No Mobile App: The absence of a mobile app may limit accessibility for businesses that prefer managing their accounts on the go.

Read my full Allica Bank Business Savings Account review.

Tide’s Business Savings Account

Tide’s Business Savings Account
Interest: 3.81% AER (variable)Term: UnlimitedBalance: £1+
Visit Tide

Best For: Small businesses and sole traders that want a flexible savings account. 

Pros

  • Competitive Interest Rate: Offers a variable interest rate of 3.81% AER, potentially providing attractive returns on savings.
  • Low Minimum Deposit: You can open the account with as little as £1, making it accessible to businesses of all sizes.
  • No Maximum Balance: This is ideal for growing businesses, as there’s no maximum balance limit.
  • No Monthly Fees: Helps minimise costs, as there are no monthly account fees.
  • Easy Access: Provides easy access to savings and allows additional deposits whenever needed.
  • Integrations: Can be linked with accounting software like Xero and Sage for streamlined financial management.
  • Convenient Account Management: You can open and manage the account through the Tide website or mobile app, offering convenience and accessibility.
  • Positive Customer Reviews: Tide has a ‘great’ average Trustpilot rating of 4.1 out of 5.
  • Deposit Protection: Eligible savings held with Tide up to £85,000 are covered by the Financial Services Compensation Scheme. 

Cons

  • Limited Eligibility: Only available to sole traders and limited companies, excluding partnerships, limited liability partnerships, and unlimited companies.
  • Must Be a Tide Customer: You will need to open a Tide Business Account to be able to apply for the savings account, which could be an issue if you don’t want to open multiple current accounts.
  • Variable Interest Rate: The interest rate is subject to change, which may affect the returns on savings.
  • Interest Cap: The maximum amount you can earn interest on is £50,000, which may limit growth if you have more substantial savings.
  • Limited Customer Support: Customer support is available primarily through the Tide app’s messenger or email, which may not suit all customers’ preferences.
  • Lack of Branch Support: Tide operates online, so businesses seeking in-person assistance may find this limitation inconvenient.

Read my full Tide Business Savings Account review.

Monzo’s Business Instant Access Savings Pot

Monzo’s Business Instant Access Savings Pot
Interest: Up to 1.6% (variable)Term: UnlimitedBalance: Up to £100,00
Visit Monzo

Best For: Sole traders and limited companies by shares looking for a simple and excessive savings option integrated with their Monzo business account.

Pros

  • No Minimum Balance: No minimum balance requirement, allowing businesses to start saving with any amount.
  • No Account Fees: Helps businesses save without unnecessary additional costs.
  • Instant Access: Provides instant access to savings without penalties or fees, offering flexibility for businesses to withdraw funds as needed.
  • Variable Interest Rate: Offers a competitive variable interest rate of up to 1.6% AER, allowing businesses to earn interest on their savings.
  • Accounting Integrations: Can be connected to popular accounting software like Xero, FreeAgent, and QuickBooks, enhancing business financial management.
  • Easy Account Management: You can open and manage the account through the Monzo website or mobile app, providing convenience and accessibility.
  • Positive Customer Reviews: Monzo has a ‘great’ average Trustpilot rating of 3.9 out of 5.
  • 24/7 Customer Support: Accessible customer support team is available 24/7 through the mobile app, phone, and email, ensuring assistance whenever needed.
  • FSCS Protection: Eligible deposits up to £85,000 held with Monzo are protected by the Financial Services Compensation Scheme, offering peace of mind to businesses.

Cons

  • Limited Eligibility: Unsuitable for partnerships, LLPs, PLCs, unlimited companies, and limited companies by guarantee, limiting its accessibility to specific business structures.
  • Limited Maximum Deposit: The maximum deposit limit of £100,000 may be restrictive for businesses with larger cash reserves, limiting the amount they can save in the account.
  • Limited Interest Rate: While the variable interest rate offered is competitive, it may not always be the highest available in the market, potentially resulting in lower returns for businesses seeking maximum growth on their savings.
  • Additional Fees: Integration with accounting software like Xero, FreeAgent, and QuickBooks requires a Monzo Pro Account, which costs £5 per month, potentially adding to the business’s expenses.

Read my full Monzo Business Instant Access Savings Pot review.

Wise Interest 

Wise Interest
Interest: 3.67% – 5.05% (variable)Term: UnlimitedBalance: Unlimited
Visit Wise

Best For: International businesses that want to hold savings in multiple currencies. 

Pros

  • Alternative to Savings Account: Wise Interest isn’t a traditional savings account. Instead of holding your funds in an account, Wise has partnered with BlackRock to invest in a fund holding government-guaranteed assets. 
  • Higher Interest Rates: This account offers higher interest rates than typical instant-access savings accounts. At the time of writing, you could earn up to 4.66% for GBP, 5.05% for USD and 3.67% for EUR.
  • Multiple Currencies: Wise Interest provides an alternative savings option for international companies looking to hold savings in various currencies.
  • Flexibility and Accessibility: The account offers easy access to savings without a fixed term, allowing businesses to save for as long as they want and withdraw funds as needed.
  • Accounting Integration: Wise Interest can seamlessly integrate with popular accounting software like Xero, QuickBooks, and FreeAgent, simplifying business financial management.
  • No Minimum or Maximum Balances: With no minimum or maximum balance requirements, businesses of all sizes can participate, accommodating small and large deposits.
  • Seamless Online Management: Businesses can conveniently open and manage their Wise Interest account entirely online or through the mobile app, offering convenience and accessibility for busy entrepreneurs and finance managers.
  • Competitive Trustpilot Rating: Wise has earned an ‘excellent’ average Trustpilot rating of 4.3 out of 5, reflecting a positive reputation among users for its services and reliability, instilling confidence in businesses considering the platform.
  • FSCS Protection: Eligible deposits up to £85,000 held with Wise are protected under the Financial Services Compensation Scheme (FSCS), providing added security and peace of mind for businesses depositing funds with Wise.

Cons

  • Variable Interest Rate: The interest rate is variable and subject to change depending on the currency held, which may result in uncertain returns for businesses seeking stability in their savings.
  • Fees: Businesses must pay a monthly Wise fee ranging from 0.17% to 0.45% of the amount held and an annual fund manager fee of 0.10%, potentially increasing the overall cost of saving.
  • Must Be a Wise Customer: Businesses must have a Wise business current account to access the Interest feature, which incurs a one-time fee of £45, adding an initial cost barrier for some companies.
  • Limited Customer Service: Wise offers limited customer service primarily through the mobile app, which may not be sufficient for businesses requiring more extensive support or assistance.

Read my full Wise Business Savings Account review.

Aldermore’s 1-Year Fixed Rate Business Savings Account

Aldermore’s 1-Year Fixed Rate Business Savings Account
Interest: 4.51% AER (fixed)Term: 12 monthsBalance: £1,000 – £1 million
Visit Aldermore

Best For: Limited and unlimited companies with a large lump sum.

Pros

  • High Fixed Interest Rate: The account offers a competitive fixed interest rate of 4.51% AER for the 1-year term, providing businesses with predictable returns on their savings.
  • Rate Guarantee: Aldermore offers a rate guarantee for 14 days from the account opening date. If rates decrease during this period, businesses still receive the initially quoted higher rate, protecting against potential fluctuations.
  • No Monthly Fees: There are no monthly account fees associated with the Aldermore 1-Year Fixed Rate Business Savings Account, helping minimise business costs.
  • FSCS Protection: Eligible deposits up to £85,000 held with Aldermore are covered by the FSCS.
  • Positive Customer Reviews: Aldermore Bank has an ‘excellent’ average Trustpilot rating of 4.4 out of 5, indicating high customer satisfaction and trust in the bank’s services.
  • Cooling-off Period: The 14-day cooling-off period allows businesses to reassess their decision to open the account without incurring any penalties, offering added flexibility and peace of mind during the initial stages.
  • Customer Support: Aldermore offers multiple channels for customer support, including phone, email, and messaging on the online banking platform, ensuring businesses have access to assistance when needed and enhancing the overall customer experience.

Cons

  • Limited Access: Businesses cannot add to their savings or withdraw until the account reaches maturity, which may not suit businesses with liquidity needs or those requiring frequent access to funds.
  • Ineligibility for Certain Business Structures: The account is only available to limited and unlimited companies, excluding limited partnerships, limited liability partnerships, partnerships, and sole traders, limiting its accessibility to a subset of businesses.
  • Online Management Only: While businesses can open and manage the account online through the Aldermore website, the lack of a mobile app may be less convenient for some users who prefer mobile banking options.
  • Minimum Deposit Amount: Although the minimum deposit amount of £1,000 is lower than other fixed-rate business savings accounts, this excludes businesses with smaller lump sums. 

Read our Aldermore business savings account review.

United Trust 180-Day Notice Base Rate Tracker

United Trust 180-Day Notice Base Rate Tracker
Interest: 5.25% AER (variable)Term: UnlimitedBalance: £5,000 – £1 million
Visit United Trust

Best For: Businesses with a large lump sum that don’t want to manage their account through online banking. 

Pros

  • Flexible Access: This account allows businesses to access their savings after giving 180 days’ notice while still earning higher interest rates than an easy-access savings account.
  • Potentially Higher Interest Rates: The interest rate tracks the Bank of England Base Rate, which can result in competitive interest rates compared to other savings options. At the time of writing, this was 5.25%. 
  • No Account Fees: There are no account fees associated with this account, helping minimise business costs.
  • Long-Term Use: With no fixed term, businesses can use the account for as long as they want, offering continuity and stability for their savings strategy.
  • Positive Customer Reputation: United Trust Bank boasts an ‘excellent’ Trustpilot rating of 4.6 out of 5, indicating high customer satisfaction and trust.
  • Savings Protection: Eligible deposits up to £85,000 held with United Trust Bank are protected by the Financial Services Compensation Scheme.

Cons

  • Notice Requirement: Businesses must give 180 days’ notice to withdraw or close the account, which may not be suitable for those requiring immediate access to funds.
  • Lack of Online Banking: Currently, account management can only be done through various channels, including email, post, and telephone. United Trust Bank plans to launch digital banking for business savings customers soon. 
  • Potential Interest Rate Fluctuations: The interest rate is tied to the Bank of England Base Rate, which can fluctuate in response to market changes, leading to uncertainty about future interest earnings.
  • Limited Customer Support Options: Customer support is only available by phone and through a contact form, which may impact accessibility for some businesses.
  • Minimum Balance: You have to open your account with at least £5,000, which may be too high for smaller businesses or those with limited cash flow. 

Virgin Money 1 Year Business Fixed Rate Savings Account

Virgin Money 1-Year Business Fixed Rate Savings Account
Interest: 5.05% AER (fixed)Term: 12 monthsBalance: £1 to £2 million
Visit Virgin Money

Best For: SME businesses that want a guaranteed return on their savings. 

Pros

  • Competitive Interest Rate: The account offers a fixed interest rate of 5.05% AER, providing businesses with a potentially higher return on their savings than other accounts.
  • Financial Planning: The fixed-term nature of the account makes it easier for businesses to calculate their returns and plan their finances.
  • Flexibility Interest Payments: Businesses can choose between having interest paid monthly or annually, allowing them to align interest payments with their financial preferences.
  • Low Minimum Opening Balance: With a minimum opening balance of £1, the account is accessible to businesses of various sizes, including those with limited initial funds.
  • Online Application and Management: Businesses can conveniently apply for an account online through the Virgin Money website and manage it through Virgin Money’s Online Service, offering ease of access and administration.
  • FSCS Protection: Eligible savings up to £85,000 held in your Virgin Money account are protected by the FSCS, providing businesses with peace of mind regarding the safety of their funds.

Cons

  • No Withdrawal: Businesses cannot add to their savings or withdraw until the account reaches maturity, which may not suit businesses with fluctuating cash flow or unexpected financial needs.
  • Limited Eligibility: The account is only suitable for micro, small, or medium-sized enterprises (SMEs) with less than 250 employees and an annual turnover of less than £42.5 million, potentially excluding larger businesses from accessing the account.
  • Account Integration Limitations: Existing Virgin Money customers cannot link their savings account with their current account, internet banking, or the Virgin Money app, limiting seamless account management options.
  • Poor Customer Reviews: Virgin Money has a ‘poor’ average Trustpilot rating of 1.8 out of 5, indicating potential customer concerns or dissatisfaction regarding their banking experience. 

NatWest 95-Day Liquidity Manager

NatWest 95-Day Liquidity Manager
Interest: 4.25% AER (variable)Term: UnlimitedBalance: Unlimited
Visit NatWest

Best For: Businesses that want a simple savings account with in-person management options.

Pros

  • Flexible Withdrawal Notice: Businesses can withdraw after providing 95 days’ notice, allowing for planned access to funds while still earning interest.
  • Variable Interest Rate: While subject to change, the account offers a competitive variable interest rate of 4.25% (as of the provided information), providing the potential for decent returns on savings.
  • No Balance Limits: There are no minimum or maximum balance limits, accommodating businesses of all sizes and allowing them to save according to their needs and financial capabilities.
  • Various Account Management Options: Businesses can manage their accounts through multiple channels, including in-person services at branches, online banking, the mobile app, and by telephone, offering convenience and accessibility.
  • Flexible Account Opening: The account can be opened online or in a branch, allowing businesses flexibility and convenience in initiating their savings plan.
  • Customer Service Availability: Customer support is available 24/7 through Online Banking or WhatsApp, ensuring businesses can seek assistance whenever needed, enhancing the overall banking experience.
  • Deposit Protection: Eligible savings up to £85,000 held in your NatWest account are protected by the FSCS.

Cons

  • Reduced Interest Rate: New accounts opened on or after 15th July 2024 will earn a reduced interest rate of 3.75% AER (variable), potentially impacting the overall returns for businesses opening accounts after this date.
  • Notice Required: Withdrawals can only be made after giving 95-Days notice, which may be an issue for businesses needing immediate savings access. 
  • Poor Trustpilot Rating: NatWest has a ‘bad’ average Trustpilot rating of 1.4 out of 5, indicating potential dissatisfaction among some customers, which may raise concerns for prospective account holders.
  • Limited Integration Options: The account may not be suitable for businesses with specific integration needs, as it can’t be linked to accounting software. 
  • Inconvenient Account Opening: New NatWest business customers may face additional steps, such as requesting a callback to provide further information, potentially adding complexity to the account opening process.

HSBC Money Manager Easy Access Account

HSBC Money Manager Easy Access Account
Interest: 1.93% – 1.96% AER (variable)Term: UnlimitedBalance: Unlimited
Visit HSBC

Best For: Businesses that want a flexible and basic savings account.

Pros

  • Flexible Savings: The account is suitable for businesses with fluctuating cash flow and unexpected expenses, allowing them to save as much or as little as they like without minimum or maximum balance limits.
  • Unlimited Withdrawals: Businesses can make unlimited withdrawals, providing easy access to funds whenever needed, which is beneficial for covering unexpected expenses or managing cash flow fluctuations.
  • No Account Fees: No account fees are associated with the HSBC Money Manager Easy Access Account, helping businesses minimise costs and maximise savings.
  • Flexible Interest Payments: Interest is calculated daily, and businesses can have it paid monthly or quarterly, providing flexibility in managing interest earnings according to their preferences.
  • Multiple Account Management Options: Businesses can open an account online or in-branch and manage it through various channels, including online banking, in-branch services, or by phone, offering convenience and flexibility in account management.
  • FSCS Cover: Eligible deposits up to £85,000 held with HSBC are protected by the FSCS.

Cons

  • Variable Interest Rates: Interest rates range from 1.93% AER to 1.96% AER (variable), depending on your account balance, which may not be as competitive as other accounts offering higher interest rates.
  • Additional Charges for Cash and Cheque Transactions: While the account doesn’t have account fees, businesses may incur charges for cash and cheque transactions, increasing banking costs for businesses frequently dealing with cash or cheque payments.
  • Poor Trustpilot Rating: HSBC has a ‘bad’ average Trustpilot rating of 1.6 out of 5.
  • No Accounting Integrations: You cannot link your accounting software with your account to streamline financial management. 

Lloyds Bank 95-Day Notice Account

Lloyds Bank 95-Day Notice Account
Interest: 4.08% (variable)Term: UnlimitedBalance: £10,000 to £5 million
Visit Lloyds Bank

Best For: Businesses with a large lump sum that want to access their savings after giving notice.

Pros

  • Competitive Interest Rate: Offers a variable interest rate of 4.08% AER, potentially allowing businesses to earn competitive returns on their savings compared to other accounts.
  • No Account Fees: No account fees or charges are associated with the Lloyds Bank 95-Day Notice Account, helping businesses maximise savings.
  • Regular Interest Payments: Interest is calculated and paid daily, maximising interest compounding. 
  • Flexible Withdrawal Options: While a 95-day notice period is required for withdrawals, businesses can access their funds when needed, provided they give the required notice.
  • Convenient Account Opening: Businesses can open their Lloyds Bank 95-Day Notice Account conveniently online or over the phone, streamlining the opening process and saving time.
  • FSCS Cover: Eligible savings up to £85,000 held in your Lloyds Bank 95-Day Notice Account are protected by the FSCS.

Cons

  • Minimum Balance Requirement: Requires a minimum balance of £10,000, which may be a barrier for businesses with smaller savings or those unable to meet the minimum balance requirement.
  • Minimum Withdrawl Amount: The minimum you can withdraw from your savings in a single transaction is £10,000, which may be inconvenient for businesses who want to withdraw smaller amounts.
  • Limited Online Management: While the account can be opened online, online management is only available for the 32-Day Notice Account, limiting the convenience for businesses preferring online banking options.
  • Restrictions on Account Eligibility: Businesses must have an annual turnover of £25 million or less to apply for the account, potentially excluding larger enterprises from accessing the account benefits.
  • Poor Customer Rating: Lloyds Bank has a ‘bad’ average Trustpilot rating of 1.7 out of 5, indicating that previous customers have been dissatisfied with the service. 

Barclays Business Premium Account

Barclays Business Premium Account
Interest: 1.51% – 1.96% AER (variable)Term: UnlimitedBalance: Up to £50 million
Visit Barclays

Best For: Businesses who prioritise flexibility over interest rates.

Pros

  • Flexibility in Withdrawals: Suited for businesses needing flexibility in accessing their savings without penalties or notice requirements, providing convenient liquidity for operational needs.
  • Free Account: No account fees or charges are associated with the Barclays Business Premium Account.
  • Wide Range of Access Options: Offers multiple access options, including online management, telephone support, and in-branch services, catering to businesses’ diverse preferences and needs.
  • High Maximum Balance: Allows businesses to hold substantial savings with a maximum balance of £50,000,000 or £2,000,000 for financial institutions, providing flexibility for larger enterprises.
  • Instant Access to Savings: Provides instant access to savings without notice or penalties, ensuring businesses can readily access funds when required for various purposes.
  • Responsive Customer Service: Offers 24/7 support through automated digital assistants, telephone assistance, live chat, and even WhatsApp, enhancing accessibility and convenience for resolving queries or issues.
  • Savings Protection: Deposits up to £85,000 held with Barclays are protected by the FSCS.

Cons

  • Variable Interest Rates: Interest rates range between 1.51% and 1.96% AER, depending on your account balance, which may not be as competitive as other accounts offering higher rates. You must save at least £10 million to access the highest rates.
  • Poor Trustpilot Rating: Barclays has a ‘bad’ average Trustpilot rating of 1.4 out of 5.
  • Can’t Be Opened Online: You can only open a Barclays Business Premium Account by phone or by visiting a branch, which could be inconvenient for some customers.
  • Limited Accounting Integrations: You cannot streamline your financial management by integrating your savings account with your accounting software.
  • Lack of Interest Flexibility: Your interest can only be paid quarterly in March, June, September and December, which may not suit some business’s financial preferences.
  • Branch Availability: Although Barclays provides in-branch services, businesses located in areas with fewer branches may experience limited accessibility to in-person support, impacting their ability to resolve certain issues or perform specific transactions efficiently.

Methodology

What is a Business Savings Account?

A business savings account is a bank account specifically designed for businesses to save money.

Instead of keeping large amounts of money in your business current account, you can transfer it to your savings account for safekeeping.

This separation makes it easier to track your company’s savings and avoid accidentally spending money that should be reserved for emergencies or future investments.

One of the main benefits of a business savings account is that it allows your company to earn interest on the money you deposit. Your savings account provider pays you a small percentage of interest on the balance in your account, helping your savings grow over time.

Several types of business savings accounts are available, and restrictions or conditions may be attached, including whether you can withdraw and the minimum balance you must maintain. 

How to Choose the Best Business Savings Account

Choosing the best business savings account can be confusing. 

Account providers understandably give a lot of information about their savings products, but the sheer volume of information makes comparing accounts overwhelming. 

If you want to find the best business savings account for your company, this is what you should focus on:

  1. Compare Interest Rates: The Annual Equivalent Rate (AER) tells you how much interest you’ll earn on your savings over one year, including compounding. The higher the AER, the more growth you will see. 
  2. Costs: Common fees include monthly maintenance fees, transaction fees, excess withdrawal fees, and minimum balance fees. Some accounts waive fees if you maintain a minimum balance or meet other requirements.
  3. Term of Account: A fixed-term account may offer higher returns if you can afford to set aside funds for a fixed period without needing immediate access. However, an open-ended instant-access account may be more suitable if you require flexibility and access to your funds anytime.
  4. Accessibility: While a business savings account is meant for saving, you should still be able to withdraw money when needed. Look at how you can manage your account and make withdrawals, including whether there is an app, online banking or in-branch services.
  5. Minimum Balance Requirements: Some business savings accounts require a minimum opening deposit or ongoing balance to avoid fees or qualify for a higher interest rate. Evaluate your company’s cash flow and choose an account with a minimum balance requirement that you can comfortably maintain.
  6. Withdrawal Limitations: Evaluate your business’s cash flow needs and consider whether the withdrawal limitations align with your anticipated account usage. If you need frequent access to your funds, choose an account with more flexible withdrawal options or higher withdrawal limits.
  7. Interest Frequency: Accounts usually pay interest monthly, quarterly, or annually, with some allowing you to choose your preferred option. 
  8. Bank Reputation: Look for a bank with a strong reliability, security, and customer service track record. Consider factors such as the bank’s size, longevity, regulatory ratings, and customer reviews.
  9. FSCS Protection: Ensure that the bank is covered by the Financial Services Compensation Scheme (FSCS). This scheme protects your deposits up to £85,000 per person per institution in case of bank failure, providing added security for your business savings.

The Types of Business Savings Accounts

There are three main types of business savings accounts to choose from.

Each type of business savings account serves different purposes and offers varying accessibility, flexibility, and interest rates.

Understanding the features and limitations of each account type can help you choose the most suitable option based on your business’s financial objectives and cash flow requirements.

Instant Access Business Savings Account

As the name suggests, instant or easy-access business savings accounts allow you to deposit and withdraw money whenever you want without penalties or restrictions. 

These business savings accounts typically offer lower variable interest rates than others because of their flexibility.

They’re best used for businesses with limited cash flow and may need to access their savings frequently for operational expenses, emergencies or unexpected costs. 

Notice Business Savings Accounts

Notice business savings accounts require you to give your provider advance notice, ranging from a few days to several months before you can withdraw money without penalties. 

You’ll usually be offered a higher variable interest rate than an instant access business savings account but a lower rate than a fixed-term account. 

Notice business savings accounts are ideal for businesses that want to earn a higher rate on their savings while maintaining some degree of flexibility to access funds with prior notice. 

Fixed-term Business Savings Accounts

With a fixed-term business savings account, you agree to deposit a lump sum in your account for a set period, known as the term or maturity period, which could range from a few months to several years. 

Withdrawals before the end of the term may result in penalties or loss of interest.

In return for locking your money away, you’ll often get a higher fixed interest rate than other accounts. The fixed-rate means you can easily predict the growth of your savings. 

Fixed-term business savings accounts are only suitable for businesses with surplus funds that can be set aside for a specific period without access. 

How Business Savings Accounts Work

A business savings account works in a similar way to a personal savings account. 

When you open a savings account, you transfer money from your business’s current account as a lump sum or regular payments. 

Once your money is in the account, the bank pays you interest on the balance. The interest rate may be fixed or variable, and it’s typically compounded, meaning you earn interest on both your original deposit and any interest you’ve already earned.

Interest is usually calculated daily or monthly and credited to your account periodically (e.g., monthly or annually). The amount of interest you earn depends on the account’s interest rate, the amount of money you have in the account, and how long you keep it there.

Most business savings accounts offer withdrawal to a nominated business current account.  There may be restrictions on the number of withdrawals or transfers allowed monthly without incurring fees.

If you have a notice savings account, you’ll have to inform your provider of your intention to withdraw a specific amount of time before the request can be processed. 

If you have a fixed-term account, you won’t be able to withdraw until the term of your account has passed and your account has matured. 

How to Open a Business Savings Account

Opening a business savings account is relatively straightforward, taking a few hours to weeks.

  1. Begin Your Application: Depending on your provider, you may be able to apply for a business savings account online, by post or in person at a branch. 
  2. Provide Information: During your application, you will be asked to provide information about your business and all owners, partners, directors and authorised signatories. These details may include contact information, annual turnover, business structure and registration.
  3. Verification: Your provider will use your information to verify your business and identity. They may request further documentation, including a valid UK passport or driver’s licence, a utility bill dated within the last three months, proof of source of funds, and registration documents. 
  4. Account Opened: After completing the necessary checks, your provider will confirm that your account has been opened.
  5. Deposit Funds: You’ll need to transfer funds into the business savings account to get it started. Depending on your provider, you may be given a deadline to do this and a minimum initial deposit amount. Failure to do this may result in your account being closed.

Can I Switch My Business Savings Account? 

Yes, you can switch your business savings account, just like changing where you keep your personal savings.

After opening a new business savings account, you must transfer your money from your old account. 

You can do this by withdrawing the money from your old account and depositing it into the new one, or you may be able to arrange a direct transfer between the two accounts.

It’s worth noting that your old business savings account may have withdrawal restrictions, including when you can request one and how much you can transfer. 

If you have a fixed-term business savings account, you must wait until your account reaches maturity before requesting the withdrawal. 

Alternatively, if you wish to switch to a different account type with the same bank or financial institution, your provider may be able to do this for you. 

Once your money has been transferred to your new business savings account, you can close your old account if you no longer wish to use it. Check your provider’s closure procedures and any notice you must provide. 

Remember to update any automatic payments linked to your old account to avoid interruptions. 

FAQs about Business Savings

Is it worth having a business savings account?

Can I use a personal savings account for my business?

Can my business have multiple savings accounts?

How Does the Flexibility of Withdrawals from Business Savings Accounts Vary?

What Are the Implications of Minimum Balance Requirements in Business Savings Accounts?

Are business savings accounts protected by the FSCS?

Is it possible to link a business savings account to accounting software?

What are the implications of exceeding the FSCS protection limit in a business savings account?

Do I pay tax on business savings accounts?