Compare Business Bonds

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. Eligible deposits are protected up to £120,000 per eligible depositor, per authorised firm (the limit increased from £85,000 on 1 December 2025).

These are fixed-rate business savings bonds and fixed-term deposit accounts: savings products where a business locks cash away for a set period at a fixed rate. They are not corporate bonds bought as investments.

Rates checked: 14 August 2026 · Market screened: 14 August 2026 · Editorial review: 14 August 2026. We screened nine 1-year products; rates offered to new applicants can change or be withdrawn without notice, though once a bond is opened its rate is fixed for the term.

Business Bonds Compared

Redwood Bank 1 Year Business Savings Bond

• Interest Rate: 3.90% AER / 3.83% gross (fixed), Issue 23. 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, with no tax deducted at source. The published terms we checked do not list an account maintenance fee.
• Our take: Redwood accepts more types of organisation than any other provider we compared: partnerships, LLPs, charities, clubs and parish or local councils. The 3.90% rate trails the leaders, so it wins on breadth, not rate.
• 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 eligible depositor, per authorised firm.

Shawbrook Bank 1 Year Fixed Rate Business Bond

• Interest Rate: 4.70% AER (fixed) when interest is paid annually, Issue 30. Monthly interest option available at 4.60%.
• Access: No withdrawals or closures before maturity. Shawbrook will contact you before maturity with your options.
• Minimum Balance: £5,000 minimum; up to £2,000,000 maximum.
• Fees: Interest paid gross. The published terms we checked do not list a maintenance fee.
• Our take: The highest one-year rate you can open online, from £5,000. The catch is eligibility: sole traders, limited companies and general partnerships only (not LLPs), with no more than four shareholders.
• 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.

United Trust Bank 1 Year Bond

• Interest Rate: 4.35% 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; £5,000,000 maximum per account.
• Fees: Interest paid gross. The published terms we checked do not list a maintenance fee.
• Our take: United Trust sits in the middle of the table at 4.35%, but accepts an unusually broad range of organisations, including clubs, societies, trusts, credit unions and pension funds, up to a £5m ceiling. You manage the account 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: 4.40% 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; £5,000,000 maximum per account.
• Fees: Interest paid gross. The published terms we checked do not list a maintenance fee.
• Our take: At 4.40% it pays more than the 1-year bond for locking away a second year, with the same broad eligibility.
• 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: 4.60% Gross/AER (fixed), Issue 100. Interest is calculated daily and added to the account at maturity.
• Access: No withdrawals or closures before the term ends. Without instructions before maturity, the money moves into an easy-access account at a nominal rate before becoming available for transfer.
• Minimum Balance: £20,000 minimum. Maximum £5,000,000 per account; £10,000,000 per entity across all Cambridge & Counties accounts.
• Fees: Interest paid gross. The published terms we checked do not list a maintenance fee.
• Our take: 4.60% on both 1- and 2-year terms and capacity to £5m, so it suits larger deposits. The £20,000 minimum rules out smaller businesses, but charities and academy schools qualify.
• 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.

Aldermore 1 Year and 6 Month Fixed Rate Accounts

• Interest Rate: 1 year at 4.40% AER (4.40% gross annual, 4.31% gross monthly). 6 months at 3.87% AER (3.83% gross annual, 3.76% gross monthly). Both fixed for the term, with interest calculated daily. Aldermore also offers a six-month term, not only the one-year bond compared above.
• Access: No withdrawal, transfer out or closure before the maturity date. In exceptional circumstances Aldermore may allow early closure at its discretion, deducting up to 90 days’ interest. You can cancel without penalty within 14 days of opening.
• Minimum Balance: £1,000 minimum on both accounts. Maximum £1,000,000 per account.
• Fees: Interest paid gross. No account fees.
• Our take: Interest can be paid monthly on either account rather than only at maturity, which suits a business that wants the income as it goes. Take that option and you take the lower gross rate, because Aldermore stops compounding it.
• Eligibility: UK limited companies only. Sole traders and partnerships are not accepted. The controlling person and all significant owners must be UK resident, over 18, and tax resident in the UK only.
• Application: Online, with a linked business current account held elsewhere for deposits and withdrawals.
• FSCS Protection: Protected to £120,000 by the Financial Services Compensation Scheme, under Aldermore Bank PLC’s own licence.

TSB Business Fixed Rate Bonds

TSB offers three fixed-rate bond terms:

• 1 Year Bond: 2.80% Gross/AER (fixed). Interest calculated daily and paid annually on the account anniversary.
• 18 Month Bond: 2.80% Gross/AER (fixed). Interest calculated daily for the full term.
• 2 Year Bond: 2.80% Gross/AER (fixed). Interest calculated daily and paid annually.
• Note: TSB is currently accepting fixed-rate bond applications from existing TSB business customers only.

• 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. The published terms we checked do not list a maintenance fee.
• Our take: The only £1 minimum here, plus a choice of 12, 18 or 24-month terms. But the rate is just 2.80% and it is open to existing TSB business customers only, so it is for convenience, not return.
• 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: 3.25% AER/gross (fixed). Interest is calculated daily and remains constant throughout the term. Open to existing Santander business customers only (apply by phone).
• Access: Funds must remain untouched for the duration of the fixed term.
• Minimum Balance: £10,000 minimum; £5,000,000 maximum.
• Fees: The published terms we checked do not list a fee. As with the other bonds here, interest is paid gross, so the account holder is responsible for declaring it.
• Our take: Santander lets existing business customers deposit up to £5m, which suits those who want everything under one relationship. At 3.25% the rate sits well below the challenger leaders.
• 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, and 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 4.70% AER on annual interest but 4.60% 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:

1. Limited companies: registered by shares and operating under UK law.
2. Sole traders: individuals legally responsible for all aspects of the business.
3. Partnerships: two or more individuals sharing management and profits. Some banks exclude LLPs.
4. Charities: recognised and registered in the UK (Cambridge & Counties and Redwood accept charities).
5. Associations, clubs, and societies: Redwood and United Trust both cover these entities.
6. 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 £20,000 minimum which rules out smaller businesses. Shawbrook limits eligibility to partnerships (not LLPs) and companies with no more than four shareholders.

Check the eligibility rules before you apply, particularly if you run an LLP, have several shareholders, or anyone involved is tax-resident outside the UK.

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 1-year rate you can open online: Shawbrook Bank (4.70% AER). Shawbrook leads the online-application accounts and accepts deposits from just £5,000, lower than Cambridge & Counties’ £20,000 minimum (though Aldermore and Union Bank of India start at £1,000). Monthly interest is available at 4.70% annually or 4.60% monthly; note it does not accept LLPs. Union Bank of India (UK) lists a higher 4.76% but opens only by branch or post, and Aldermore (4.40%, limited companies only) and Hampshire Trust Bank (4.36%, broad eligibility) both sit between Cambridge & Counties and United Trust on rate.

Best high rate from £5,000: Shawbrook Bank (4.70% AER). Shawbrook pays the highest rate you can open from a £5,000 deposit. Aldermore and Union Bank take smaller deposits (£1,000), but Aldermore is limited companies only and Union Bank applies by branch or post; TSB takes £1 yet pays only 2.80%. United Trust offers a wider range of eligible entity types and a 2-year bond at 4.40% AER.

Best for larger deposits: Cambridge & Counties Bank (4.60% AER, up to £5 million). The £20,000 minimum is higher than the challengers but the 4.60% rate holds on both 1- and 2-year terms, and the charity eligibility is a useful inclusion. Santander also accepts up to £5 million but at 3.25% and only for existing customers.

Broadest eligibility: Redwood Bank (3.90% AER, from £10,000). We keep Redwood on the list for eligibility rather than rate: it accepts the widest range of organisations (sole traders, charities, clubs and councils) and its 2-year bond pays 4.25% AER. TSB has the only £1 minimum but pays 2.80% and is open to existing customers only.

Existing Santander or TSB customers. Santander pays 3.25% AER and TSB 2.80% AER, both open to existing business customers only. These are the lowest rates here, and only worth considering if staying with an existing banking relationship outweighs the rate you give up.

FAQs about Business Bonds