Business easy access savings

Business easy access accounts explained

What is an easy access business savings account?

An easy access or instant access business savings account is an account that allows businesses to withdraw money as and when they need it.

However, it’s always worth checking the terms of an easy access business account as there may be some restrictions on withdrawals, such as a limit on the number of withdrawals you can make per year.

All types of businesses could benefit from these accounts, including start-ups and limited companies that have been established for years.

Because businesses can access money saved in these accounts, they can be a useful place to store an emergency fund. This could help businesses manage their cashflow as they can dip into their savings during slower trading periods or if they’re faced with an unexpected expense, for example.

Many businesses may keep their spare money in their current account but putting it into an easy access business savings account means it can earn interest while still being available should the business need to withdraw any funds.

What are the interest rates on easy access business savings accounts in the UK?

Currently, the top easy access business savings rates pay in excess of 4.00% AER.

However, because easy access accounts pay a variable rate of interest, these rates could increase or decrease depending on the provider and the overall market.

For example, when the Bank of England changes the base rate, this could affect the rate providers pay on their variable business accounts.

See our chart for the most up-to-date list of the top rates on easy access business savings.

Types of easy access business savings accounts

Easy access savings accounts for businesses can differ in several ways.

For example, some accounts offer instant access, which means you can receive money immediately after requesting a withdrawal.

However, other accounts may take longer to process withdrawals so you may not receive your money until the next working day.

Furthermore, some easy access accounts limit the number of withdrawals a business can make within a certain period, while some may require you to withdraw a minimum sum at one time.

Easy access business accounts also offer different opening and management methods. For example, some accounts may only be available online or via a mobile app, while others allow you to open and manage them in a branch, by phone or via post.

Real-world scenarios: When to choose an easy access business account

Easy access accounts can be useful for many types of businesses for different purposes. Below are some of the ways that a business could use an easy access savings account.

• Scenario 1: A seasonal business that wants to put aside excess money during peak times and leave it to earn interest, so they have a cash reserve to fall back on during slower trading periods.
• Scenario 2: A sole trader or start-up that may be more financially insecure than larger, more established businesses, and so wants to be able to access their cash reserves easily.
• Scenario 3: A business that is saving up for a specific goal, such as buying new equipment, and wants to keep these funds separate from its day-to-day funds.
• Scenario 4: A large company that has money locked away in a fixed business bond to maximise interest but wants some money in an easy access account that it can dip into if necessary.
• Scenario 5: A not-for-profit organisation that may need emergency access to its funds.

Factors to consider when choosing an easy access account

There are many factors to consider when choosing an easy access business savings account. Some of the points to compare to help you find the most suitable account for your business include:

• The interest rate. The higher the rate, the bigger the return on your money. Check for any introductory offers that are only available for a limited period.
• How interest is paid. Some providers can pay interest monthly or quarterly while others pay it annually.
• The withdrawal process. Check if you can make unlimited withdrawals of any size from an account, or if there’s a limit on the number you can make and a minimum amount you need to withdraw at one time. Also see how long it could take to receive your money after requesting a withdrawal.
• Management methods. Make sure an account allows you to open and manage it in the way you prefer, whether that’s online, via app or by visiting a branch, for example.
• Eligibility criteria. Crucially, check your business meets the criteria of the provider, including the minimum deposit requirements.

How do I open an easy access business savings account?

It should be relatively straightforward to open an easy access business savings account.

Depending on the provider, you may be able to open an account online, via mobile app, by phone, by post or by visiting a branch.

You typically need to be a UK-based business with a UK bank account to be eligible for a business savings account, and the directors usually need to be UK residents over the age of 18.

Providers also set their own requirements. For example, providers may only offer accounts to certain types of businesses, such as sole traders, limited companies and partnerships, or to businesses with a certain turnover or number of employees.

Make sure you check your business meets all the eligibility criteria of an account before applying.

When applying for an account, you need to provide some key information about you and your business, such as:

• names and personal details of the directors
• contact details (email address and phone number)
• details of your business current account
• your registered business address
• your Companies House registration number (if applicable)
• your business finances, including annual turnover, balance sheets and assets held.

You may need to provide a form of identification, such as a driving licence, as well as other supporting documents as part of the application.

Once you’ve applied for an easy access business savings account, you need to deposit a minimum amount to open it. This could be as little as £1 or as much as £20,000

How quick is it to open a business easy access savings account?

The time it takes to open an easy access business savings account varies between providers and will depend on your individual business. You may be able to open an account on the same day as applying, potentially in as little as 10 minutes, but some providers may take several working days to process and approve your application.

It will be quicker to apply if you have all the necessary information to hand, such as your Companies House registration number, your annual turnover and proof of identity, for example. If you don’t have all the required details, or if your business is relatively new or more complex, the application process could take longer.

Regulations for easy access business savings accounts

Business savings providers should be authorised by the Financial Conduct Authority (FCA). This ensures they follow all necessary rules and regulations to keep your money safe.

As with personal savings, deposits in a business savings account are protected under the Financial Services Compensation Scheme (FSCS), provided the firm is eligible. Most non-financial companies are likely to be eligible for this protection, but it’s worth checking if you’re not sure.

Under the scheme, up to £85,000 of the money you have deposited with a banking group is protected should the provider go bust, for example.

Note that limited companies and limited liability partnerships have a separate £85,000 limit to the personal limit of the director(s) as the business is a separate legal entity.

However, sole traders are only protected up to £85,000 across their personal and business savings with one banking group.

See which banks share a banking licence and are part of the same group in our who owns whom guide.

How to compare business easy access savings accounts

You can use the chart above to compare the range of easy access accounts currently available to businesses. It allows you to sort the accounts by rate, choose the amount you want to deposit and filter the accounts depending on your business type.

When comparing accounts, you can look at features such as:

• how interest is paid
• how to open and manage the account
• minimum deposit requirements
• any restrictions on withdrawals.