Business Savings Accounts
If you regularly have credit balances at your bank, then you'll need to choose the best business savings account to make your money work harder rather than just leaving the capital in your current account.
Most business current accounts pay 0% on credit amounts, so it's wise to ensure you set up some form of savings to at least improve this number. Since the Bank of England has reduced the base rate, the range of products available in the market for your business reserves is limited to just a few.
Best Savings Rates Chart by Bank
Rates correct at time of press. All accounts are instant access with interest paid monthly.
HSBC Credit Accounts
HSBC pay up to 0.04% on credit balances and have various other accounts that can earn additional interest, but you may need to tie your money up for an extended period.
- Business Money Market Account - For deposits of over £5,000 with flexible terms of between seven days and five years.
- Business Money Manager - Instant access savings account with no fees or penalties earning up to 0.04% AER.
- Money Manager Longer-Term - If you don't make regular withdrawals, the rates increase slightly up to a maximum 0.08% for the largest balances.
There are a few more specialist type of deposit accounts available.
More information at HSBC Business Savings Accounts page.
Barclays Business Banking
Barclays provides 0.00% on credit balances on all balances up £1,000,000. If you have spare capital and bank with Barclays, you may want to look at an alternative institution.
- Business Premium Account - mostly paying 0% interest.
- 0.05% for balances over £1,000,000.
- Clients Premium Account if you hold balances on behalf of clients.
- Treasury Deposit Account for fixed terms at negotiable tariffs.
Get more information on Barclays Business Savings Accounts.
Natwest Business Savings
Natwest pays just 0.01% interest on current and savings accounts, so it's best to check out all of their savings products and move your spare money to the right place. The rates across the board are low, so if you bank with Natwest it's probably not worth worrying too much of what savings account your business has.
- Business Reserve provides instant access but pays just 0.01% for all amounts.
- The Liquidity Manager notice accounts require 95 days notice for withdrawals but still only returns 0.1% on credit balances.Treasury Reserve places your money on the London money market for a fixed term. Rates are negotiated directly with Natwest prior to opening your account.
- Client Deposit Manager earns 0.01% for handling third-party funds.
- Clients' Monies Service is Natwest's internet based system to help manage third-party funds.
- Other specialist accounts to manage clients money and non-profit community accounts.
More information at Natwest Business Savings and Investing.
Lloyds Savings Accounts
Unlike all other banks, Lloyds doesn't pay different amounts by tier although the rates are still in line with their compatriots.
- The current account only receives interest of 0.05% on balances over £1 million.
- Business Instant Access Account - pays 0.05% on all deposits from £1 to over £1 million.
- Clients' Call Account - pays 0.05% on all deposits.
- Designated Clients' Call Account - pays 0.05% on all deposits.
More information at Lloyds TSB Savings and Deposit rates for businesses.
Santander Savings Accounts
Santander offers 0.25% interest on credit balances for current account holders with turnovers of less than £250,000 but have various offers as follows. The bonus saver accounts offer more than most other banks.
- Business Everyday Saver - pays 0.01% on balances over £1.
- Reward Saver - pays 0.35% with no withdrawals made during the month. This product has the highest tariff in the market.
- Fixed Rate Bond - pays 0.50% when you tie your money up for 12 months.
More information at Santander Savings Products.
Other Options to Improve Credit Income
When interest rates are as low as they are now, it's difficult to receive a decent income. Here are some other options to consider.
- Invest in other businesses either directly or via crowdfunding.
- Take out a fixed rate bond.
- Investigate deposit accounts that could offer improved income.
- Use the reserves to improve your own business while interest rates are low.
- Pay off or reduce outstanding loans, mortgages, or other high-interest debt.