Compare Business Bonds

Explore the best fixed-rate business bonds available in the UK.

Business bonds are a great option for UK businesses looking to secure their surplus cash while earning competitive returns. Different from a Fixed Term Savings Account, business bonds typically lock in your money for a set period but often at a higher interest rate, providing a predictable and often more substantial return on investment.

I’ve compiled every current deal in the UK market to help you choose the most effective option for your business needs.

United Trust 1 Year Bond: 4.85% Gross/AER

• Interest Rate: 4.90% Gross/AER (fixed), illustrating what the interest rate would be if interest was paid and compounded once each year.
• Access: Withdrawals, transfers, or closures are not permitted before the maturity date. Options will be provided as maturity approaches, with reinvestment into a seven-day instant access account if no instructions are given, followed by repayment to your Nominated Account.
• Minimum Balance: Open an account with a minimum of £5,000; the maximum investment limit is £1,000,000.
• Fees: Interest is paid gross, i.e., without the deduction of tax.
• Benefits: Fixed interest rate for the bond term, interest calculated daily and paid on maturity, and account management via 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 name of the business for the nominated account.
• Application: Apply by post or online via the United Trust Bank website. You have 14 days from the application submission to fund the account, either electronically or by cheque, from your Nominated Account.
• FSCS Protection: Protected up to £85,000 by the Financial Services Compensation Scheme.

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United Trust 2 Year Bond: 4.85% Gross/AER

• Interest Rate: 4.85% Gross/AER (fixed), indicating the interest rate if it was paid and compounded annually. Interest is calculated daily using the account’s cleared balance, with the option to have annual interest added to the bond or transferred to a nominated bank account.
• Access: No withdrawals, transfers, or closures are permitted before the bond’s maturity date. Upon nearing maturity, you will be contacted with reinvestment options or, without instructions, funds will be placed in a seven-day instant access account at the bank’s prevailing rate before full repayment to your Nominated Account.
• Minimum Balance: You can start an account with a minimum of £5,000, with the maximum investment limit set at £1,000,000 per account.
• Fees: Interest is paid gross, without the deduction of tax. No specific maintenance fees are mentioned. Tax treatment depends on individual circumstances and may change.
• Benefits: Offers a fixed interest rate for two years with the flexibility to choose how to receive annual interest. Accounts can be managed via email, post, or telephone, offering convenience to businesses.
• Eligibility: Open to a range of business entities including Limited companies, Sole traders, Education providers, Clubs, Societies, Trusts, Credit unions, and Pension funds. Requires a transactional UK Bank account in the business’s name for the nominated account.
• Application: Applications can be submitted by post or online. A 14-day window is provided to fund the account after application submission, using funds from the Nominated Account either via electronic transfer or cheque. Failure to fund within this period results in account closure.
• FSCS Protection: Protected up to £85,000 by the Financial Services Compensation Scheme.

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Cambridge & Counties Bank 1 Year Fixed Rate Business and Charity Bond Issue 70

• Interest Rate: 4.80% Gross/AER (fixed), where the interest is calculated daily and added to your account on maturity. This fixed rate provides a clear understanding of the return on investment over the bond term.
• Access: Withdrawals or closures are not allowed before the term ends. Before maturity, you will be contacted with options for your funds. Without instructions, funds default to an easy-access account at a nominal rate, with funds then available for transfer.
• Minimum Balance: A minimum of £50,000 is required to open the account, with a maximum limit of £5 million per account and £10 million per entity across all Cambridge & Counties Bank accounts.
• Fees: Interest is paid gross, meaning it’s not automatically taxed at source. It’s the responsibility of the account holder to manage potential taxes. No specific fees are mentioned for account maintenance.
• Benefits: Offers certainty with a fixed interest rate for one year and supports a range of business and charity entities. The account management is flexible, via online, phone, or post.
• Eligibility: Available to academy schools, charitable companies, limited companies, and sole traders based/incorporated in the UK, all of whom must be liable to pay tax only in the UK. All individuals associated with the account must be 18 years or older. Accounts are not offered to those liable to pay tax in other jurisdictions or to pension schemes.
• Application: The account can be opened with a single deposit made from the organisation’s nominated UK bank or building society account, by transfer or cheque. The application process is open to specified entities, with the account needing to be funded within a stipulated timeframe after application submission.
• FSCS Protection: Protected up to £85,000 by the Financial Services Compensation Scheme.

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TSB Business Fixed Rate Bonds

Interest Rate:

• 1 Year Bond: 4.30% Gross/AER (fixed), with interest calculated daily and paid annually on the anniversary of the account opening.
• 18 Month Bond: 4.00% Gross/AER (fixed), showcasing a guaranteed interest rate over the term, with interest calculated daily.
• 2 Year Bond: 3.90% Gross/AER (fixed), providing a fixed return with interest calculated daily and paid annually.

• Access: No withdrawals or account closures are permitted before the bond’s maturity date. Options for fund allocation will be provided before maturity; without instructions, funds will be transferred to an easy access account at a nominal rate.
• Minimum Balance: Open with a minimum of £1, ensuring accessibility to a wide range of businesses. Maximum investment limit is set at £5,000,000, accommodating substantial business savings.
• Fees: Interest is paid gross, indicating no tax is deducted at source. It’s the account holder’s responsibility to manage any tax obligations. The terms do not specify account maintenance fees.
• Benefits: Fixed interest rates offer certainty over the investment term, suitable for businesses planning their financial future. Multiple term options (12, 18, or 24 months) allow for tailored savings strategies.
• Eligibility: Available to UK residents over 18 years old who are operating a UK registered business. Restrictions apply to individuals currently declared bankrupt, with County Court Judgments, or under an individual voluntary agreement.
• Application: Applications can be initiated online or through the TSB Business Mobile app, requiring details of the current business bank account, business activity, and source of funds, alongside personal and business identification and address verification.
• FSCS Protection: Deposits are protected up to £85,000 by the Financial Services Compensation Scheme, ensuring safety for your investment in the event of bank failure.

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Santander Fixed Rate Business Bond – Summary

• Interest Rate: 3.60% fixed, ensuring a stable return on your investment. Interest is calculated daily and the rate remains constant throughout the term, providing a predictable outcome for financial planning.
• Access: The bond requires that funds remain untouched for the duration of the fixed term. This limitation ensures that the fixed interest rate is maintained, offering security for your investment until maturity.
• Minimum Balance: A minimum deposit of £10,000 is needed to open the account, catering to businesses that can allocate a significant amount of funds for a fixed period. The maximum investment limit is £5 million, accommodating substantial deposits for larger businesses.
• Fees: The summary does not specify any fees associated with maintaining the bond. The focus is on the fixed interest rate and the return it generates. Interest is presumed to be paid gross, meaning it’s the account holder’s responsibility to manage any tax implications.
• Benefits: Offers a guaranteed fixed interest rate, allowing businesses to plan their financial future with certainty. The bond is designed for businesses looking for a stable and predictable return on their savings.
• Eligibility: Available to existing Santander Business customers with up to two directors, owners (shareholders), or partners. All must be over 18 and UK residents. Eligible businesses include sole traders, partnerships, limited liability partnerships, or private limited companies, intending to use the account for business purposes only.
• Application: Interested businesses must call Santander to inquire about opening a Fixed Rate Business Bond. The account must be funded with at least £10,000, and the funds must be left untouched for the term agreed upon.
• FSCS Protection: Deposits are protected up to £85,000 by the Financial Services Compensation Scheme.

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Shawbrook 1 Year Fixed Rate Business Bond Issue 24 – Summary

• Interest Rate: 5.02% Gross/AER (fixed), where the interest is calculated and paid annually, offering a clear and guaranteed return on your investment over the bond term. An alternative option allows for monthly interest payments at a rate of 4.91%.
• Access: Withdrawals or closures are not permitted before the term concludes. At maturity, options for reinvestment, withdrawal, or transfer of funds will be communicated, ensuring you have full control over your savings post-term.
• Minimum Balance: Opening the account requires a minimum deposit of £5,000, designed to accommodate businesses ready to commit a moderate amount of funds for fixed-term growth. The maximum investment limit is set at £2,000,000, allowing substantial deposits for larger business savings.
• Fees: Interest is earned gross, meaning there’s no automatic deduction of tax. The responsibility for any potential tax due rests with the account holder. The bond does not specify any maintenance fees, focusing instead on the fixed interest benefit.
• Benefits: Guarantees a fixed interest rate for a one-year term, providing peace of mind and a clear financial planning advantage. The bond is accessible to a variety of business structures, including sole traders, limited companies (limited by shares), and partnerships (excluding LLPs).
• Eligibility: Open to sole traders, limited companies (limited by shares), and partnerships (excluding LLPs) with no more than four shareholders or required signatories. All directors and beneficial owners must be 18 or over, UK residents, and solely UK tax residents. The bond is specifically designed for businesses looking for a fixed return on unused cash reserves.
• Application: The account must be opened online, with management available both online and by phone. Shawbrook Bank limits businesses to one Easy Access account, promoting a focused and strategic approach to business savings.
• FSCS Protection: Eligible deposits are protected up to £85,000 per person under the Financial Services Compensation Scheme. For joint accounts, the protection covers up to £170,000.

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Redwood 1 Year Business Savings Bond – Summary

• Interest Rate: 4.65% Gross/AER (fixed), ensuring a clear and guaranteed return on your savings over the bond term. Interest is calculated daily and can be paid into your account either monthly or annually, based on the preference you select at the time of account opening.
• Access: Withdrawals or account closures are not permitted before the end of the bond term. Redwood Bank will contact you in writing at least 21 days before the maturity date to outline your options for the funds. Without receiving instructions at least two working days before maturity, your funds will be transferred to a Redwood Bank Call Account, which does not pay credit interest, and then returned to your nominated bank account after a maximum of ten calendar days.
• Minimum Balance: The bond requires a minimum opening deposit of £10,000, making it suitable for businesses able to set aside a significant sum for a fixed period. You can make multiple deposits within the initial funding period up to a maximum of £1 million.
• Fees: Interest is paid without the deduction of tax, and it is your responsibility to account for any tax owed. The document does not detail specific account maintenance fees.
• Benefits: Offers a fixed interest rate for one year, providing stability and predictability for financial planning. Suitable for a wide range of UK-based businesses, including limited companies, partnerships, LLPs, sole traders, charities, associations, clubs, societies, and parish/local councils.
• Eligibility: Available to UK-based businesses with the capability to leave savings untouched for the fixed term. Businesses can apply online or by post, with the account starting to earn interest on the working day funds are received. The product is limited and may be withdrawn at any time, with a maximum funding period of 14 days from account opening.
• Application: You can appoint up to four authorised users, and all transactions must be conducted through your nominated account. The account can be managed in writing, over the phone, or using secure login details.
• FSCS Protection: Eligible deposits are protected up to £85,000 per person by the Financial Services Compensation Scheme, ensuring safety for your business’s deposits in the event of bank failure. Joint accounts are protected up to £170,000.

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What is a fixed rate business bond?

A fixed rate business bond is a savings product designed for businesses to deposit money for a predetermined period, usually ranging from one to several years, at a fixed interest rate. This means the interest rate agreed upon at the opening of the account remains the same throughout the term of the bond, providing businesses with a guaranteed return on their investment.

These bonds do not allow for withdrawals or additional deposits during the term, encouraging businesses to plan their finances with a stable and predictable interest income.

Fixed rate business bonds are suited for businesses looking to earn a higher interest rate on surplus cash that they can afford to set aside, without needing immediate access to these funds.

How does the interest rate on a business bond work?

The interest rate on a business bond is fixed for the duration of the bond term. It is calculated daily and can be paid monthly or annually, depending on the bond’s terms. This rate remains unchanged regardless of market fluctuations.

What is the highest fixed business bond interest rate?

At the time of writing, the highest fixed business bond interest rate available in the UK is offered by Shawbrook’s 1 Year Fixed Rate Business Bond Issue 24 at 5.02% Gross/AER (fixed). This rate applies when the interest is calculated and paid annually, providing a clear and guaranteed return on investment over the bond term.

Who can open a business bond account?

While the criteria for opening a business bond account varies slightly among the different banks and financial institutions, the following entities are typically eligible:

1. Limited Companies: Businesses registered as limited by shares and operating under the laws of the UK.
2. Sole Traders: Individuals running their own business as the sole person legally responsible for all aspects of the business.
3. Partnerships: Businesses operated by two or more individuals who share management and profits. Some banks specify that Limited Liability Partnerships (LLPs) may not be eligible.
4. Charities: Charitable organizations recognized and registered in the UK.
5. Associations, Clubs, Societies: Various forms of organizations including clubs, societies, and associations engaged in activities for their members.
6. Parish/Local Councils: Local government entities responsible for the administration of their local area.

Additionally, all directors, owners (shareholders), or partners typically need to be aged 18 or over and UK residents. Some banks also require that the business, its directors, owners, or partners must only be tax resident in the UK and not declared bankrupt, have County Court Judgments, or be subject to an individual voluntary agreement.

Specific requirements may include:

• Being an existing customer of the bank (as mentioned by Santander).
• Having up to four signatories or authorised users (as mentioned by Redwood and Shawbrook).
• Meeting a minimum opening deposit requirement, which can range from £1 to £50,000 depending on the institution.

Each financial institution has its own set of terms and conditions, so it’s important for businesses to review these details closely to determine their eligibility.

Should I lock my money away in a bond?

Deciding to lock your money away in a fixed-term investment like a business fixed rate bond should be based on your business’s financial health, goals, and liquidity needs.

If your business can afford to set aside money without needing access to it for the term of the bond, and you’re looking to earn a higher interest rate than what’s available in a standard savings account, then locking away your funds might be a good decision. It provides a guaranteed return, helping with financial planning.

However, it’s crucial to consider your cash flow needs and whether you might need these funds for unexpected expenses. Also, the current interest rate environment could affect whether it’s a good time to lock in a rate. If interest rates are expected to rise, you might miss out on higher returns by committing now.

Always weigh the potential benefits against the restrictions and your business’s specific financial situation.

FAQs about Business Bonds