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 0.01% 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.
Like with any bank account, when you open a business bank account, you can expect a small amount of interest on their income. However, this interest - just like for personal current accounts, is generally negligible when compared to an actual savings account.
For businesses, a savings account isn't always a possibility. Some businesses work on unreliable capital and irregular income, so placing money into a 'pot' as savings may not be accessible.
However, for businesses that do have the means to begin saving, business savings accounts offer a unique opportunity to grow business capital. Many are based on fixed-rate savings bonds, but these come with stipulations that may or may not put you off.
Why Open a Business Savings Account?
We'll cover more around general queries in our FAQ section further down the page, but in brief a business savings account:
- Gives your business a way to save capital at a higher interest rate.
- Allows you to choose between a notice or fixed rate account, which affects withdrawals.
- Grants the opportunity from some accounts to be given 'bonus' rates if you meet certain conditions.
- Exclusive to business monies - gives a better return than personal savings.
Fixed-Rate Bonds vs Standard Savings
When choosing a business savings account, remember that your business funds are different to your personal savings. Sometimes, the needs of the business may necessitate a quick withdrawal of money 'banked' away in a savings account - so you may only want to choose an account that makes withdrawal easy.
Many of the 'bond' accounts mentioned in this article offer good interest rates at the cost of not being able to withdraw money before the 'maturity date' of the bond. This means your business' money becomes essentially 'trapped' in the bond.
When choosing the accounts below, we've included BOTH fixed 'bond' accounts and notice-based offers where you must give X days notice to withdraw. While the notice accounts have less favourable interest rates, they are more manageable for businesses that need access to funds.
The Top 10 Business Savings Accounts in 2021
For business owners who want their money to work harder, a business savings account offers preferential interest rates compared to personal savings. Here are our picks of some of the best offers currently on the market.
Summary of the Best Business Savings Accounts
Click the links to jump to the relevant section or read the full list below.
All figures below are taken from the listed provider's websites and are correct as of June 2021.
|Name||Term||Minimum Balance/Deposit||Interest Rate||Withdrawals permitted?|
|Aldermore Fixed Rate||1 year/6 months||£1000||0.85% / 0.52% AER fixed||No/No|
|Metro Bank Fixed Term Deposit||1 year/2 years||£5000||0.41-1.5%||No|
|Barclays Business Premium Account||N/A||£1||Tiered based on balance||Yes|
|Investec Online Business Savings||N/A||£40,000||0.65% AER||Yes - 32 days notice|
|Redwood Bank 95 Days Notice||N/A||£10,000||0.70% AER||Yes - 95 days notice|
|Shawbrook Bank||2 years/1 year||£5000||1%/0.9% AER fixed||No|
|NatWest Liquidity Manager Notice Account||N/A||£0||0.05/0.15% AE||35 or 95 days|
|Charity Bank Ethical 1 Year Business Fixed Rate||1 year||£10,000||0.47% AER||No|
|Hampshire Trust SME Fixed Rate Account||2 year/1 year||£5000||1.05%/0.95% AER||No|
Aldermore Fixed Rate
Aldermore is a bank that was designed to support the needs of small and medium businesses in the UK, created after the financial crisis in 2009. It holds a very high TrustPilot rating and has a good reputation considering its relatively small size compared to other banks on this list.
Aldermore offers a variety of business saving deals. In addition to the listing we've covered here, they also provide an 'easy access' account which has a very favourable interest rate compared to most at 0.50% AER.
Considering many of the listed savings accounts here are fixed and cannot be withdrawn, generally choosing the account with the best interest rates is the sensible choice and Aldermore's is certainly up there with the most generous.
For those who don't want to pay into a fixed bond, Aldermore's easy access account is an enticing alternative that offers far higher interest rates than other non-fixed accounts on our list. It's also FSCS protected.
- Both fixed-rate and easy access accounts available
- Fixed-rate interest is competitive, easy access interest is very competitive
- Bank designed to support SME business
Santander is one of the UK's best-known banks for personal use. It comes as little surprise that the bank offers a vast array of savings accounts to UK businesses - but which one you choose will depend on your business and needs.
The bank providers a simple Business Everyday Saver that you can open with as little as a £1 deposit. As with all instant access accounts, interest is low at 0.01% AER. The Business Reward Saver is an upgraded version of this account that allows you to withdraw with the caveat that withdrawals will lessen your interest rates.
Like the others on this like, Santander also provides fixed-rate bonds. Santander's one-year fixed-rate business bond offers a fixed AER of 0.10-0.15% depending on deposit size and whether you're a Santander 1|2|3 Business World customer.
For those who are 1|2|3 Business World customers, the interest rates on all accounts become more appealing.
- Large banking house offering a wide choice of saving accounts
- Fixed and variable interest rates available
- Preferential rates are given to 1|2|3 Business World customers.
Metro Bank Fixed Term Deposit
Metro Bank is a business bank account that we've covered in other articles - offering an interesting blend of online banking features and in-person support at physical branches in the south of the UK.
Its fixed-term deposit account offers the most appealing option for businesses that want better interest rates on their savings. Metro Bank's fixed-term rates vary between 0.15 and 0.25% AER depending on the length of your fixed term - but the bank also gives you the flexibility to add more funds to your initial deposit.
Small business owners are welcome to open accounts in-store without appointments. There are also everyday saver style accounts available for businesses who don't need high interest but do want access to cash whenever needed.
- Physical branches to make opening accounts easy
- Fixed-rate terms of 1 and 2 years
- Build on initial £5000 deposit for better returns
Barclays Business Premium Account
Barclays is one of the UK's most recognisable banking houses and for good reason - the bank has a long history and is traditionally good at supporting businesses in various ways. Barclays, like many large banks, offers different types of savings account including a standard 'everyday' and a fixed-term one.
The everyday version is known as the Barclays Business Premium Account and allows instant cash withdrawals at the cost of lesser interest. You don't need a minimum deposit to open one and interest is accrued daily but paid every quarter.
Barclays' fixed account is harder to access - as it requires a minimum balance of £100,000. Known as the treasury deposit account, this is a fixed-term account you can open in the branch and offers a far higher return through a bespoke fixed rate that is agreed when you open the account.
- Recognisable business banking establishment
- Flexible premium account for everyday savings
- Fixed accounts require £100,000 minimum balance
Investec Online Business Savings
Moving away from traditional banks brings many benefits to businesses looking to save money. Investec, for example, provides Online Flexi Saver accounts that combine some of the benefits of a fixed-term bond with more flexibility around withdrawals. The Online Business Savings account is a 32-day notice offer for UK SMEs that provides a 0.65% AER on £40,000 deposits.
For businesses with lots of cash in the bank but uncertainty around cash flow, this is a lucrative product that gives you a preferential interest rate without having money 'locked' for a year or more.
- Online account with 0.65% AER on minimum deposits of £40,000
- 32-day withdrawal notice as opposed to 1-2 years
- FSCS protected to £785,000
Redwood Bank 95 Days Notice
Redwood Bank is another smaller bank designed for businesses. Launched in 2017, Redwood specialists in helping businesses to grow and develop with its loans and savings account offerings.
For businesses that need a transparent savings account, Redwood's 95-day saving account provides a 0.70% AER interest rate in exchange for giving 95 days' notice when withdrawing.
They also offer a fixed 1-year bond at 0.80% - but considering the 95-day account has an interest rate of just 0.10% less than this in exchange for much more flexibility, it has a broader appeal and therefore is the one we've included in our comparison.
The 95-day account requires a minimum deposit of £10,000 to open.
- 95 day and 1-year fixed-term business savings offered
- 0.70% AER with 95 days' notice for withdrawals is a strong offering
- Moneyfacts Awards 2020 winner for Best Business Variable Rate Deposit Account Provider
Shawbrook Bank is built around transparency - making it clear from the first moment you land on the website that its rates are locked for the fixed bonds. The 1-year bond offers a 1.00% AER while the 2-year bond rises to 1.05%. For businesses that can afford to lock money away even longer, the bank offers up to 7 years of fixed-rate bonds.
Shawbrook also has an easy access savings account which requires no withdrawal notice and a 0.50% AER - making it competitive with some fixed rate offers elsewhere despite needing no notice. However, a minimum balance of £1000 and a maximum balance of £85,000 apply.
- Comprehensive suite of fixed-rate saving bonds available from 1-7 years.
- Easy access account with 0.50% AER for a minimum deposit of £1000
- 7-year bond available for long-term saving
NatWest Liquidity Manager Notice Account
Like Barclays and Santander, NatWest is an enormous bank that is well known throughout the UK. Its liquidity manager account is a good business savings offer that allows you to 'lock' funds for 35 or 95 days to benefit from better interest rates. Unlike many offers on this list, the account can be opened with no balance.
- 35-day or 95-day withdrawal notice
- 0.10/0.15% interest available
- Can be opened by non-Natwest customers by enquiring online
Charity Bank Ethical 1 Year Business Fixed Rate
If your business is engaged in corporate, social and economic responsibility policies it makes sense that you'd want to invest in a more sustainable bank. The Charity Bank's Ethical 1 Year Fixed Rate Account is a single year bond that can be opened with a £10,000 balance and boasts a 0.47% AER.
However, this account is unique in that the money invested is used to support the charitable sector in the UK and boost social enterprises. Full details are available on the bank's site.
- 1 year fixed rate at 0.47% AER
- Minimum deposit of £10,000
- Monies invested used for charities and social enterprises in the UK
Hampshire Trust SME Fixed Rate Account
The Hampshire Trust is a challenger bank that offers two robust fixed-rate accounts - a 2-year and 1-year business bond offering that provides a 1.05% and 0.95% AER respectively. Both require a minimum investment of £5000 and permit a maximum of £750,000.
The bond also allows you to 'top up' deposits for the first 14 days - so businesses who want to build on their initial £5000 investment can do so before the money becomes 'locked in'.
For those who want more access to cash, Hampshire Trust also provides a 95-day notice account, which combines a good interest rate with the ability to withdraw money after giving notice in advance.
- Challenger bank with high customer satisfaction scores on Feefo
- 2 and 1 year fixed rate bonds available
- Variable-rate 95-day account available with up to 0.75%
Business Savings Accounts FAQS
What Are Business Saving Bonds?
Business saving bonds are essentially 'locked-in' bank accounts where you deposit money and then cannot access it again for the length of the bond. This often comes with far higher interest than that of an everyday access account. Many of the accounts we've mentioned above are built around fixed-rate bonds. Some businesses will benefit from these bonds, while others requiring access to their cash at all times will not.
How Do Business Savings Accounts Work?
Standard business savings accounts work just like the personal equivalent - though they often have additional benefits. You deposit money into the account and can then withdraw it when needed - but the longer you leave funds the more interest will accrue.
However, as we've mentioned above, businesses can get better rates from fixed-rate or 'notice' accounts - where you deposit money either to be locked for a minimum period of time such as 1 year, or you have the ability to 'give notice' before withdrawing. This is often either 30+ or 90+ days and will depend on the account you choose.
These accounts can give you better return because by 'locking' in your money, the bank itself has more control over capital and can invest etc with more confidence - so it's in each bank's interest to have your money 'locked' in for a bond period. If this sounds worrying, remember that ALL banks (personal and business) work the same way - they pay interest because they are profiting from trading based on everyone's accounts.