Business Notice Accounts

What is a business notice savings account?

A business notice account is a type of savings account that allows businesses to earn interest on their surplus funds.

While businesses can withdraw from the savings held in these accounts, they will need to serve a set number of days’ notice before withdrawing any money.

Notice periods can range from seven days to 180 days or more.

How does a business notice account work?

Businesses will have to make a minimum deposit when opening a notice account, which could range from £1 to a few thousand pounds to more than £20,000.

Once open, businesses can usually add to their savings when they choose, as with a standard easy access account.

And, like other savings accounts, they will earn interest on the money they deposit.

However, the main feature that makes notice business accounts different to other savings accounts is the withdrawal process. Instead of accessing funds immediately after requesting a withdrawal, businesses will need to wait a certain amount of time before their funds are released.

This is known as the notice period and could be as little as a few days to as long as several months.

What is a business notice account normally used for?

A business notice account can be useful for businesses who want the option to access their savings but won’t need to use the money in an emergency.

For example, a business may use a notice account to store funds that they will use to expand their operations or buy some new equipment, as they will be able to time their withdrawal so they have their money when they need it.

What are the advantages of a business notice account?

Business notice accounts often pay higher rates than easy access accounts, which can make them a more appealing option if you already have some money put aside that you can turn to in an emergency.

Furthermore, unlike business bonds, you can typically add to your savings whenever you choose. This means you can continue to grow your savings pot and earn a competitive rate of interest on it.

And, even though you need to wait a notice period when withdrawing your funds, you can still access your savings without penalty when you need them. However, you need to plan your withdrawals carefully to make sure your money is released in time.

What are the disadvantages of a business notice account?

One of the main drawbacks of a business notice account is that you have to wait a number of days or months before you receive the money you want to withdraw.

This means these accounts aren’t very convenient if you want to access your savings quickly, to cover an unexpected emergency expense, for example.

Furthermore, these accounts pay a variable rate of interest, which means providers could cut rates. As a result, you could get a smaller return on your savings than first thought, unlike a fixed bond which offers a guaranteed interest rate and return on your money.

Can you withdraw money from a notice account?

Businesses can withdraw money from a notice account, but they won’t receive their money straightaway.

Instead, businesses will have to wait a specified notice period before they can access the money they’ve withdrawn.

Bear in mind that providers may only allow one notice period to run at any one time, so you would have to wait to receive your money before requesting another withdrawal.

Can I access my money before the notice period?

Many business notice accounts won’t allow you to access your money before the required notice period.

This means, if you’ve taken out an account with a 180-day notice period, for example, you will need to wait 180 days after requesting the withdrawal before you can use your money.

Are business notice accounts safe?

Because business notice accounts are a type of savings accounts and not an investment, your money isn’t at risk.

Furthermore, most business accounts are protected by the Financial Services Compensation Scheme (FSCS). This means your deposits (up to a maximum of £85,000 with each financial institution) are protected if a provider goes bust, for example.

Bear in mind this limit applies to each banking licence, so any providers that share a licence will share the limit. See our guide on who owns whom.

If your business is a separate legal entity (such as a limited company) you will have a separate £85,000 limit for your business alongside an £85,000 limit for your personal savings.

However, if you’re a sole trader or partnership, you will only have one £85,000 limit across your business and personal savings with each provider.