Business Deposit Accounts
Most businesses have some form of positive cash flow in their bank accounts so it's wise to choose the best business deposit account from the major and smaller banks in the UK so earn interest although the current rates can be quite low.
In fact most current checking accounts are only paying a mere 0.10% on credit balances although there are instant access deposit accounts as well as places you can tie your money up for longer periods to earn higher interest - although in the current climate when rates are low it's unlikely you'll receive over 5% on any deposits.
HSBC Business Deposit Account
The HSBC deposit account only pays 0.10% interest on credit balances but there are other accounts that pay a higher interest if you have a higher amount to deposit or if you can leave your money for a longer time. These are the current offerings from HSBC for business customers.
Business high Interest Deposit Bond offers 1.26% AER for deposits over £5,000 and you need to tie your cash up for at least 3 months with a maximum of 3 years. Perhaps interest rates will improve over the coming years so it may be worth taking the bond for 3 months at a time and see if interest rates increase as the bond deposit value will also likely increase over time.
Business Money Manager Account is an instant access business savings account that incurs no fees or penalties for withdrawals and earns just 0.39% AER interest.
Other speciality accounts are available for clubs and accountants that pool clients money.
More information at HSBC Business Deposit Accounts
Barclays Business Deposit Accounts
The standard deposit account offered to business accounts offers a current 0.05% on balances over £0 (although their current account pays 0.10% on credit balances - so best not to move your money around in Barclays). There are other options from instant access accounts to accounts for longer term deposits of funds. Theses are the main offerings from Barclays.
Sterling Business Tracker Account is an instant access savings account but pays an incredibly low 0.05% AER up to balances of £500,000 and only 0.25% AER if you have a spare £25,000,000 - not recommended.
Business Bonus is a regular savings account that pays the standard 0.05% AER but with the bonus goes up to 1.05% - You need to pay in at least £25 per month and are allowed 4 withdrawals and 2 standard order payment holidays within a year to qualify for the 1% bonus to be paid.
Other Deposit accounts - Barclays also offers many other branded type of accounts but they all pay the low rate of 0.05% - these accounts are called Business Direct e-Deposit Account, StepSaver (when the interest rate improves marginally for deposits over £500,000), Business Premium Account (where the interest rate is 0.15% for balances over £1,000,000). There are also accounts for accountants to pool monies from clients.
More information at Barclays Business Savings Accounts
Lloyds TSB Business Deposit Accounts
Lloyds TSB pays 0.10% gross on business deposits although there are additional deposit accounts to make your money earn a little more.
The interest rates are mostly at 0.10% for all savings accounts so it's probably best to leave the money in your current account rather than wasting time moving it around each week or month. Here are their main accounts:
Business instant access account pays 0.10% interest on all deposits from £1 to over £1 million with instant access to your money without penalties applied.
Business 30 day notice account again pays 0.10% on all deposits but you have to provide 30 days to access your money, so why bother?.
When we did our research we couldn't find any deposit accounts with Lloyds TSB that paid more than 0.10% unless you had a balance of £250,000 or more and had a revenue turnover of at least £2 million - so the moral here is if you want to earn anything half decent is to search other banks online.
More information at Lloyds TSB Business Deposit rates
Natwest Business Deposit Banking
Natwest also generally offer 0.10% interest on current and deposit accounts so it's best to check out all of their deposit accounts and move your spare money to the right place. The rates across the board are still low so if you bank with Natwest it's probably not worth worrying too much of what deposit account your business has. These are what Natwest offers business customers.
Direct reserve is for clients who just want to manage their accounts via internet banking or the telephone so saves Natwest on depositing monies in their branch network. Rates are 0.10% up to £10,000 then 0.25% between £10,001 and £25,000 , 0.50% between £25,000 and £250,000 and 0.75% above that.
Reserve Account for Business is an instant access deposit account that pays 0.10% unless you have over £250,000 then it pays just 0.15%
Bonus saver account has the same interest rates as above but pays a bonus of 1.0% per quarter so long as you make no more than one withdrawal in those 3 months
Treasury reserve if you have larger deposits or can leave your money for 28 days on deposit.
Other specialist accounts to manage clients money and non profit community accounts.
More information at Natwest Business Deposits Page
Alliance & Leicester Business Deposit Accounts
For business customers, Alliance and Leicester offer 0.10% gross interest on credit balances for business current accounts and have other deposit accounts as follows.
Business Instant Savings Accounts pays 0.10% plus 0.30% bonus (gross) if you make no more than one withdrawal in each bonus period. The 0.10% rate tracks the Bank of England base rate so should rise when interest rates improve.
Business Instant Savings Account provides the same rates as above but you get instant access to your money.
Base Rate Beater offers a rate of the Bank of England base rate + 0.10% (currently 0.60%) but requires a deposit of at least £200,000
More information at Alliance & Leicester Deposit Rates