If you would like to earn interest on your business’ savings, but might need to access it quickly, then an instant or easy access account is a good option. These accounts offer flexibility as you can withdraw and deposit when you wish, but note easy access accounts sometimes have restrictions attached, meaning you might only be able to withdraw a few times a year.
Compare our best business savings account
Earn up to 5.05% with a business savings account
Business savings accounts protect your funds while earning interest until you need them for a rainy day
A business savings account can be a great way to earn interest while effectively managing your business' finances.
Here, we update our best rates daily and look at the pros and cons of having a business savings account so you can find the right account for your needs. We'll also give you an overview of other financial products you might want to consider for your business.
Our best business savings accounts rates - last updated May 16 2024
Our highest interest rates for a range of business savings accounts available in the UK. Be aware that the products with the highest interest rates may often be further down the results table. This list is updated daily.
| Product type | AER | |
|---|---|---|
| Instant Access | 4.33% | |
| Notice | 5.01% | |
| Fixed term | 5.05% |
What is a business savings account?
A business savings account is similar to a personal savings account. It allows you to earn interest on a sum of money that you don’t need to spend right away.
A business savings account also acts as an alternative to a current account, where you might be earning little to no interest. This means you can use a business savings account as a way to grow your business’ wealth which can act as a safety net if you suddenly have an unexpected business expense.
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Do I need a business savings account?
A business savings account offers a range of benefits, but perhaps the most attractive feature is the extra interest you could be earning on any surplus cash in your business.
You’ll usually find higher interest rates with a business savings account than you would with a current account, so it makes sense to move any money you don't need right away into a savings account.
Most business savings accounts are also covered by the Financial Services Compensation Scheme (FSCS), which is a government scheme that protects your savings up to £85,000 in the case that a provider goes bust. If you have more than this amount in your savings pot, it's a good idea to split up your savings and open multiple savings accounts to ensure you are fully protected.
And remember, if your company is registered with companies house then you are legally required to keep your business finances separate from your personal account.
Freelancers and sole traders don’t face the same legal requirement, but it would still be worthwhile considering a business savings account to take advantage of the benefits they offer.
Median profit of all SMEs in the UK [1]
£12,000
Am I eligible for a business savings account?
If you would like to open a business savings account then you’ll need to have a business current account, as this is the only way to move money in and out of your account.
The good news is that your business current account and business savings account can be with different providers, so you can always find the best deal for you.
Eligibility criteria
| Criteria | In order be eligible |
|---|---|
| Do I need to have a business current account? | Yes |
| Do I need to be over 18? | Yes |
| Does my business need to be based in the UK? | Yes |
Some providers may also have additional eligibility requirements, so be sure to check the terms before starting an application.
Types of business savings accounts
Instant and easy access accounts
If you would like to earn interest on your business’ savings, but might need to access it quickly, then an instant or easy access account is a good option. These accounts offer flexibility as you can withdraw and deposit when you wish, but note easy access accounts sometimes have restrictions attached, meaning you might only be able to withdraw a few times a year.
Notice savings accounts
A notice savings account requires you to give notice before withdrawing, but notice periods can range from seven days to 180 days - so be sure to find one to suit your needs. Depending on the notice period, you can normally get a higher interest rate than an instant access as there is slightly less flexibility.
Fixed-term savings accounts
If you won’t need to touch your savings for a period of time, then it’s worth exploring a fixed-term savings account. The terms range from six months to five years, but it will give you the opportunity to take advantage of higher interest rates. However, only choose a fixed-term if you definitely won’t need the money for the fixed period set out in the terms of the account. You may be penalised for withdrawals before the term ends.
Types of business savings accounts
Instant and easy access accounts
Notice savings accounts
A notice savings account requires you to give notice before withdrawing, but notice periods can range from seven days to 180 days - so be sure to find one to suit your needs. Depending on the notice period, you can normally get a higher interest rate than an instant access as there is slightly less flexibility.
Fixed-term savings accounts
If you won’t need to touch your savings for a period of time, then it’s worth exploring a fixed-term savings account. The terms range from six months to five years, but it will give you the opportunity to take advantage of higher interest rates. However, only choose a fixed-term if you definitely won’t need the money for the fixed period set out in the terms of the account. You may be penalised for withdrawals before the term ends.
How to choose a business savings account
As there are different types of savings accounts, it's important you choose the right one for your business.
Accessibility of funds
It’s important that you can access your money when you need it, so always check with the provider how the account will be operated and when you can access your funds. For example can you access your money at any time, or do you need to give notice?
Minimum balance
Some business savings accounts ask for a minimum balance to open the account and you’ll need to have at least this money in the account at all times. Make sure you can meet this requirement as otherwise you might be charged a penalty.
Cost of return
Choosing the account with the best interest rate won’t always mean it’s the right one for your business. For example, if you have to lock away your money for five years to get the top rate, you have to consider if this lack of accessibility is worth the higher rate?
Our best easy access business savings account
Our editors have picked out their top easy access savings account with a competitive interest rate. This type of savings account is great if you would like to earn interest on your savings but also have the flexibility to withdraw at a time that suits your business.
Editor’s pick
Tide's instant access account offers a competitive 4.33% AER variable on your business savings. The interest is also paid monthly and there are no limits or fees on withdrawals - making this account incredibly flexible.”
Tide Instant Saver
Term
Instant access
Open with
Any amount
Interest rate
4.33% AER variable
Show Details
Eligibility
Minimum Initial Deposit
£0
Our best notice business savings account
Our editors have picked their top notice savings account with a competitive interest rate. This account is best if your business doesn't need the money urgently and you are happy to wait a specific notice period before withdrawing.
Editor’s pick
If you don’t need to access your savings immediately, this 95-day notice account is worth considering. You’ll need £10,000 to open it and you can pay funds through a nominated business current account, plus four users can have access.”
Redwood Bank 95 Day Business Savings Account (Issue 16)
Term
95 days notice
Open with
£10,000
Interest rate
4.55% AER variable
Show Details
Eligibility
Minimum Initial Deposit
£10,000
Permanent UK Resident
YES
Our best fixed-term business savings account
Our editors have picked out their top fixed-term business savings account with a competitive interest rate. A fixed-term savings account works best when you have a lump sum that you won't need for a specific number of years. Bear in mind that if you try and withdraw before the end of the term you will be penalised.
Editor’s pick
For businesses that have a lump sum to save, TSB's one-year fixed-rate bond is worth exploring. At 4.50% it has a competitive rate and this will be guaranteed for 12 months, so you can plan ahead for the extra money you'll earn. There's also the option to open multiple fixed-rate bonds with different terms to match your business' needs. ”
TSB Business Fixed Rate Bond 1 Year
Term
1 year
Open with
£1
Interest rate
4.30% AER fixed
Show Details
Eligibility
Minimum Initial Deposit
£1
Permanent UK Resident
YES
Interest earned on a 4.1% one-year fixed-term savings account
This is an example of how much interest businesses could be earning if they put a lump sum into a one-year fixed-term account.
4.1% used for illustrative purposes as rates can change and figures are before tax.
Pros and cons
Pros
Earn interest on your business' money
Build up funds for a rainy day or unexpected bills and expenses
Pick from a range of account types such as easy access and notice
Cons
You may need to maintain a minimum balance
Some accounts may offer less flexibility on accessing your money
Interest rates can fall after initial introductory period
Do I pay tax on business savings accounts?
It is your responsibility to pay tax on any interest you earn on a business savings account and declare it as part of your annual tax return. Tax deductions are not included because business savings accounts advertise their interest rates and pay interest as gross.
To find out more about the tax implications, read our guide about the differences between a sole trader and limited company.
Other products for your business
Business bank accounts
A business current account is specifically designed for businesses to manage their finances. It provides banking services such as receiving and making payments, managing cash flow, and keeping business and personal transactions separate.
Business loans
A business loan is a way to get extra funds to run or grow your business successfully. The loan could cover rent for your business’ property, employee salaries or opening new offices.
Business credit cards
A business credit card works in a similar way to a personal credit card, and they can help businesses with cash flow or unexpected expenses.
Business charge cards
Business charge cards provide a convenient way to make purchases and manage expenses, but unlike credit cards, they require the full payment of the outstanding balance each month.
Other products for your business
Business bank accounts
A business current account is specifically designed for businesses to manage their finances. It provides banking services such as receiving and making payments, managing cash flow, and keeping business and personal transactions separate.
Business loans
A business loan is a way to get extra funds to run or grow your business successfully. The loan could cover rent for your business’ property, employee salaries or opening new offices.
Business credit cards
A business credit card works in a similar way to a personal credit card, and they can help businesses with cash flow or unexpected expenses.
Business charge cards
Business charge cards provide a convenient way to make purchases and manage expenses, but unlike credit cards, they require the full payment of the outstanding balance each month.
FAQs
Can you use a personal savings account instead of a business savings account?
It depends. If you have a business that is a limited company, it means that the business is its own entity and separate from your personal finances. The only exception is if you're a sole trader. As a sole trader, you and your business are the same entity, so you'd be able to use a personal savings account for your business.
How much is the minimum balance to open a business savings account?
The minimum balance to open a business savings account will vary depending on the type of account you wish to open. For example, an interest access could be opened with as little as £1 but a fixed-term account might need a minimum deposit of £1,000. It’s always important to check the terms and conditions for each provider.
Are business savings accounts protected by the FSCS?
Yes, business savings accounts are protected by the FSCS on bank deposits of small businesses up to £85,000.
The FSCS will also protect other types of business including unincorporated organisations, partnerships and sole traders. However, in the case of sole traders, personal accounts and business accounts are not treated as separate accounts and will come under a single claim.
Are there any restrictions to opening a business savings account?
Yes, some business savings accounts are only available to certain types of business. For example, one type of account may only be eligible to a limited company or a sole trader, but not for a charity.
Can I have more than one business savings account?
Yes, you can open more than one business savings account. Just bear in mind that the more accounts you have, the more admin there might be in terms of opening and maintaining them. And depending on the amount of spare money you have, you might not make the most amount in interest if you split your funds between several accounts.
Do business savings accounts have withdrawal restrictions?
Yes, business savings accounts do have withdrawal restrictions. For example, fixed-term savings accounts don't allow you to withdraw money before the end of term without paying a penalty. Instant or easy access savings accounts have no restrictions. However with an easy access account, you may have to wait a few days before the money is transferred.
How long will it take to open a business savings account?
Providing you have all the information needed to open a business savings account, it shouldn't take too long. Each provider is different - with some taking longer than others - but you should expect the account to be open within a week or less.
What information do I need to provide to open a business savings account?
The information you'll need to provide to open a business savings account will depend on the specific provider's requirements.
Generally you'll need to prove your business is registered - perhaps with a certificate on incorporation - and provide documents to prove identification of both you and your business, including addresses.
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References
1. Report from Statista: Recent UK business statistics from Statista found that the median profit of SMEs in the UK was approximately £12,000 in 2022