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NGBusiness savings accounts
Given current high interest rates, now is the time to put your company’s surplus funds to work with leading business savings accounts – the smart way to make your money make more money, faster.
Given current high interest rates, now is the time to put your company’s surplus funds to work with leading business savings accounts – the smart way to make your money make more money, faster.
Hundreds of thousands of UK businesses already own a business savings account, with £billions placed on deposit. These companies know the hidden value in surplus cash, and they use savings accounts to make their money and their businesses grow faster. But what about the SMEs who don’t own a business savings account? They’re missing out on an easy windfall that could add £thousands or even tens of £thousands to their bottom line. For example, the latest figures from UK Finance show that £186.1 billion of SME funds are sitting dormant in current accounts, which often pay no or little interest. The Centre for Economic and Business Research (CEBR) therefore estimate that this is causing these businesses to miss out on £4.2 billion in extra interest each year. Businesses are missing out on lucrative savings deals due to poor visibility of available products, complexity in managing multiple accounts, as well as perceived barriers to entry, such as minimum deposit sizes and lengthy fixed terms.
 Swoop is here to help! Our aggregator tool combines the best available savings products based on your needs, allowing you to manage your savings from one place, secure FSCS deposit protection, and maximise your interest rate.
A word from Andrea
“If your business is accumulating capital, it makes sense to put it in a deposit account where it will get a better rate of interest than your regular business bank account. The things to look out for are how easy the money is to access and what service fees and transaction charges are payable. While it’s good to have a ‘fighting fund’ in savings, you should also think about whether your capital would be better invested in growing your business rather than sitting in a bank."
It’s a business bank account available to businesses – also known as a ‘business deposit account’. Business savings accounts are the perfect place for SMEs to store their surplus cash and earn extra money from saver’s interest.
Business savings accounts can be opened by sole traders, partnerships, or limited companies. They may function as a twin to your regular business current account, acting as a second, interest-paying account with the same bank, or they can be opened as stand-alone savings accounts held at a completely different financial institution.
Business savings accounts will typically require a minimum starting deposit at opening. Depending on the type of account selected, this can vary from £1 up to £10,000 or more. Most business savings accounts will also limit your maximum balance – anywhere from £85,000 up to a few £million. Interest earned on your savings balance is usually paid into your account on either a monthly or annual basis.
If you have spare cash sitting idle in your business current account – where it typically earns zero interest – then yes, you do. Amid a tough economic climate and rising business costs, it makes no sense to miss any opportunity to collect what is essentially free cash.
This calculator is intended for illustration purposes only and exact payment terms should be agreed with a lender before taking out a loan.
The most common types of business savings account are easy-access, fixed-rate, and notice accounts.
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Easy access account
The business savings account that does what it says on the tin. Save money, earn interest, get access to your money whenever you need it. Easy access accounts give business savers the most flexibility, but they will typically offer a lower rate of interest than other types of account and have a lower maximum savings ceiling – often set at £85,000. Easy-access account interest rates are usually variable, so they can go up or down. Interest can be paid monthly or annually.
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Fixed-rate account
Also called a ‘business savers bond account’, fixed rate accounts are for businesses who know they won’t need their funds at short notice. Savings are locked away for a set period, usually one or two years, and there is usually no interim access available. Fixed-rate accounts offer higher interest than easy access accounts, with two-years earning more than one-year accounts. The required opening deposit is also typically higher than for a flexible account, but the maximum savings ceiling may be as high as £2,000,000. Interest rates are fixed, so they remain stable throughout the savings term. Interest can be paid monthly or annually.
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Notice account
Notice accounts are a hybrid of the easy-access and fixed-rate products. With a notice account, you agree to provide 45, 100, or more days’ notice to the bank before making a withdrawal. The longer your agreed notice period, the higher the interest rate you receive. Notice accounts usually require a higher opening deposit than easy-access accounts, and the maximum savings ceiling can be as high as £2,000,000. Interest rates are variable, so they may fluctuate up or down. Interest can be paid monthly or annually.
Easy access
3-4%
6-month fixed
5-6%
1-year fixed
6-7%
Swoop has partnered to develop an aggregation tool which enables businesses to manage their cash from a single savings dashboard. You’ll find easy and fast access to rates from a variety of highly-rated banks. Businesses make a single deposit to a hub account and can then access multiple savings accounts. The range of choice on offer means you could be earning more interest on your cash across multiple FSCS-protected bank deposits.
How much access to your money do you get?
If you think you will need access to your savings at short notice, an easy-access account is probably best for you. These accounts will usually offer lower interest rates, but you will be able to withdraw your money whenever you want. If you think you won’t need the funds for a while, you could consider a fixed-rate account that pays a higher rate of interest.
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What is the interest rate?
Clearly, you want your savings to earn as much interest as possible. The longer you are prepared to lock your funds away, the higher the interest you will usually receive. However, as said above, your need for good interest must be balanced with your potential need to access your funds.
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Are there penalties for withdrawing your money?
Most business savings accounts will incur charges and fees for servicing and standard transactions, but some accounts (fixed-rate and notice), may also levy an ‘early withdrawal penalty’ for taking cash out before the end of the savings term. Some fixed-accounts will not allow early withdrawals at all.
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How do you manage the account: online, in branch, by post etc?
Some business savings account are online access only, others may offer or even require you to manage the account by post or a visit to the bank branch, and some accounts will offer all types of access. Online accounts are typically more convenient, incur lower fees, and are easier to manage – important considerations for busy small businesses.
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Is there a minimum amount you need to deposit to open the account?
Opening deposits can vary significantly by account type and provider. Pick an account that gives you the services you are looking for with a deposit requirement that suits your business cashflow.
Opening your business savings account is simple. Simply register, select your desired account and deposit amount, verify your identity and your account will open. You can easily shop a range of savings accounts for the highest interest, the lowest fees and the most flexible access to your money. Find the best business savings account for your business from a single, flexible source.Â
Register your business to view the range of instant access, notice, and deposit accounts in a single dashboard.
Select your deposit amount and let the cash planner find all available options. You’ll be prompted to supply your bank details and a recent bank statement when you’ve selected a suitable account.
You’ll then be asked to verify your identity. Once this is done your account is opened.
You can now manage your savings through your dashboard. No further applications will need to be completed for any future deposits.
Unlike personal savings accounts, business savings accounts may be liable to service fees, plus charges for certain bank transactions. These charges can include:
Top tip: Many business savings accounts offer a ‘no fees or charges’ introductory period after opening – typically six months or more. It therefore makes sense to shop around to compare the best deals when selecting a business savings account - or you may even consider switching your existing business savings account to a different bank to reduce the costs you pay.
Yes. The earned interest rate will vary depending on the type of account you open.Â
Interest rates may be variable or fixed. Easy-access and notice savings accounts usually offer variable interest, with the percentage you earn changing as the bank base rate fluctuates. Fixed-rate or bond savings accounts offer a set rate for the entire savings period.
Example rates include easy access at 3-4%, 6-month fixed at 5-6%, and 1-year fixed at 6-7%. See what rate you could get now.
Annual equivalent rate, or AER, is used to show what you would earn in interest from different savings accounts over a year. AER makes it easier to compare savings accounts, and it is similar to the way APR (annual percentage rate) works for borrowing products, such as credit cards and loans.
Yes. All business savings accounts advertise their interest rates as gross. This shows the rate before any tax is deducted. If you are a sole trader or a partnership and your business savings account has not deducted any tax, or you have chosen to pay it separately yourself, then you must declare it as part of your annual self-assessment tax return. If your business is a limited company, you will pay corporation tax on any profits you make as part of your business; this includes any interest made on business savings.
Possibly. It depends on your business circumstances. If your business fits two out of the three definitions below then you will have £85,000 savings protection under the Financial Services Compensation Scheme (FSCS). This means the money is protected if your savings account provider goes bankrupt.
Protected businesses must meet at least two out of these three criteria:
·       A turnover of under £6.5 million
·       A balance sheet total under £3.26 million
·       No more than 50 employees
Visit the FSCS website for more information on business saver protection.
Minimum balances to open a business savings account vary for different types of account. Easy-access accounts may be opened for as little as £1 but will typically require £1,000 to open. High yield fixed-rate accounts and some notice accounts may require £10,000 or more at opening.
Generally, no, there are not. However, some business savings accounts may only be available to specific types of business. For example, an account may only be eligible to a limited company or a sole trader. In other cases, it may only be open to certain sectors of business, such as charities, or client accounts for solicitors.
Yes. UK SMEs can operate multiple savings accounts with the same bank or building society, (depending on any limits from the provider), or they may prefer to spread their surplus cash across several providers and different types of account.
Withdrawal restrictions vary from account to account. Easy-access savings accounts will usually have no restrictions at all, whereas fixed-rate accounts may not allow any withdrawals during the savings term, or if they do, there can be a hefty penalty to pay. 45- or 100-days’ notice accounts may also refuse any withdrawals without the required notice or charge a penalty for giving you early access to your money.
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