Best 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?

Business notice accounts work by asking for a minimum initial deposit, which could range from £1 to more than £20,000, after which further additions can normally be made at any point, much like with a standard easy access account.

And, like other savings accounts, interest will be earned on the money deposited. Interest rates will be variable, which means they can change at any point, but because you’re not locked in you can move your money should you wish.

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. Common notice periods include:

• 30 days
• 60 days
• 95 days
• 120 days
• 180 days

Typically speaking, the longer the notice period the higher the rate, but that isn’t always the case. Shorter notice periods will be best for those who want slightly more flexibility (perhaps for regular and expected expenses), while longer periods will be better for those who want to secure slightly higher rates without being tied in for a longer term.

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.

Who is a business notice account for?

A business notice account is for any kind of business that wants a slightly higher interest rate than an instant access account, without needing to lose full access to their surplus cash for too long. They’re commonly used by:

• Sole traders
• Limited companies
• Partnerships
• PLCs
• Not-for-profit organisations
• Associations
• Trade unions
• Co-operatives

Note that some business notice accounts will have restrictions in terms of the type of business that can open an account, e.g. it may only be available to limited companies. Always check the terms and restrictions in the “Product Specification” section of each chart listing.

Business notice accounts vs. other business savings accounts

Can you withdraw money from a notice account?

Yes, 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.

How to choose a business notice account

There are a number of things you’ll need to consider when choosing a business account. Typically you’ll need to bear in mind the following features:

• Notice period. One of the most important considerations will be the length of notice period. Shorter periods will be better for businesses that want to manage planned expenses, while longer notice periods will be most suited for a business’ surplus cash that can be kept comfortably out of reach.
• Interest rate. The rate of interest will be key in order to maximise returns, but bear in mind that because rates are variable, there’s no guarantee that it won’t change.
• Opening deposit. Opening deposit amounts vary and some can be substantial, so you’ll need to check that your business has the available surplus cash to meet the requirements.
• Account management options. It’s important to check how the business will be able to open and manage the account. While many can be operated via online banking, some require branch or postal management, and make sure to check for mobile banking if convenience is key.
• Eligibility requirements. Always check for eligibility restrictions – some accounts will only be available to certain business types, for example, while others may ask for you to be a current customer of the bank or to have a linked account with them.

Are business notice accounts safe?

Yes – because business notice accounts are a type of savings accounts and not an investment, your money is safe.

Furthermore, most business accounts are protected by the Financial Services Compensation Scheme (FSCS). This means your deposits (up to a maximum of £120,000 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 £120,000 limit for your business alongside a £120,000 limit for your personal savings.

However, if you’re a sole trader or partnership, you will only have one £120,000 limit across your business and personal savings with each provider.