Guide
How to switch business bank account
What the Current Account Switch Service covers, how long it takes and what to prepare.
Read guideCompare business savings accounts
Put surplus cash and tax reserves to work — easy-access and fixed-term business savings compared
Compare savings ratesReady to compare business savings accounts?
Run a full market comparison before you commit. It takes about five minutes and there's no obligation to apply.
What is a business savings account?
A business savings account holds surplus company cash separately from your everyday current account, earning interest at an AER (annual equivalent rate) instead of sitting idle where it earns little or nothing.
Businesses commonly use savings accounts to set aside money earmarked for VAT, corporation tax or payroll, as well as to earn a return on cash reserves not needed for immediate trading.
Rates and access vary between easy-access accounts you can dip into anytime and fixed-term deposits that lock funds away for a set period in exchange for a higher guaranteed rate.
You open the account alongside or separately from your main business current account, transferring surplus funds in whenever cash flow allows, and interest accrues daily and is typically paid monthly or at maturity.
Easy-access accounts allow withdrawals anytime, though rates can move with the base rate, while fixed-term bonds guarantee a rate for the whole term but usually restrict or penalise early withdrawal.
What are the risks with business savings accounts?
- Not every business banking provider holds a full UK banking licence. E-money institutions protect your funds through safeguarding arrangements rather than FSCS deposit protection, and the two work differently if the firm fails.
- Fees that look small per transaction can add up quickly at volume — always model a typical month's activity against the fee schedule before switching.
- If something goes wrong, UK-regulated providers must run an internal complaints process, and eligible small businesses can escalate unresolved disputes to the Financial Ombudsman Service free of charge.
Why compare business savings accounts with us
Tax and VAT reserves
Easy access is usually essential, since you need funds available on the exact payment date regardless of notice periods.
Cash you won't need for 6-24 months
A fixed-term deposit typically pays a noticeably better rate in exchange for locking the funds away.
Planned future spending
A notice account can bridge the gap, offering a better rate than easy access provided you can plan withdrawals in advance.
Business savings account types compared
Indicative rates available to UK businesses. Rates move with the Bank of England base rate.
| Account type | Typical AER | Access | Notice |
|---|---|---|---|
| Easy access | 2.00% – 3.50% | Instant | None |
| 32 – 95 day notice | 3.25% – 4.25% | On notice | 32 to 95 days |
| 1 year fixed term | 3.75% – 4.50% | At maturity | Locked |
| 2 year fixed term | 3.60% – 4.35% | At maturity | Locked |
What could your reserves earn?
Illustrative annual interest on a £100,000 balance held for a full year.
| Balance held | Easy access at 3.00% | 1 year fix at 4.25% |
|---|---|---|
| £25,000 | £750 | £1,063 |
| £50,000 | £1,500 | £2,125 |
| £100,000 | £3,000 | £4,250 |
| £250,000 | £7,500 | £10,625 |
Expert advice
Most business current accounts pay nothing at all, so idle reserves quietly lose value to inflation every month.
“Split reserves across easy access and notice accounts — you keep working capital liquid and still earn a proper rate.”
business savings accounts: pros and cons
Pros
- Earns interest on cash that would otherwise sit idle
- Separates tax and VAT reserves from spendable cash
- Fixed terms guarantee a known return
- FSCS protection up to £85,000 with licensed banks
Cons
- Fixed-term accounts penalise or block early withdrawal
- Business rates are sometimes lower than the best personal rates
- Minimum deposits can be higher than personal savings accounts
- Interest earned is subject to corporation tax
How to compare business savings accounts
Look past the headline offer and check these five things:
- 1
Monthly and transaction fees
Some providers bundle a fixed number of free transactions each month, then charge per payment or cash deposit above that — model your real volumes before you commit.
- 2
Integrations
Check native links to Xero, QuickBooks or Sage, since manual reconciliation quickly eats into any time saved by switching provider.
- 3
Cash and cheque handling
Digital-only providers are usually cheapest but can charge heavily, or refuse outright, to pay in cash or cheques through the Post Office or a partner network.
- 4
Customer support
Compare whether you get a dedicated relationship manager, phone support, or app-only chat — this matters far more once something goes wrong with a payment.
- 5
FSCS or safeguarding protection
Confirm whether the provider holds a full UK banking licence (FSCS protection up to £85,000) or is an e-money institution using client-money safeguarding rules instead.
Compare business savings accounts
See what's available for your business today. It takes just minutes.
Am I eligible for a business savings account?
Requirements are generally straightforward, but expect:
1. UK-registered business
A limited company, LLP, partnership or sole trader with standard business verification documents.
2. Existing business current account
Many providers require you to already hold, or open, a business current account with them or elsewhere as a funding source.
3. Minimum deposit
Fixed-term business accounts commonly require a minimum deposit of £1,000 to £10,000, higher than typical personal savings minimums.
4. Director and beneficial owner ID
The same identity and address checks required for opening a business current account.
Meet a growing agency setting aside tax money
The agency sets aside 20% of every invoice paid into a separate easy-access business savings account earmarked for its upcoming corporation tax bill.
Over eight months, the reserved £48,000 earns roughly £1,300 in interest at 4.3% AER, rather than sitting in a non-interest-bearing current account.
Because it's easy access, the funds remain available immediately when the tax payment is due, with no penalty for withdrawal.
Business savings account or paying down debt?
If your business carries expensive borrowing, such as a credit card balance or high-interest loan, paying that down usually beats the interest earned on a savings account, since borrowing rates are almost always higher than savings rates.
Once expensive debt is cleared, a savings account is the sensible home for tax reserves and a cash buffer covering at least a few months of core costs.
Longer-term surplus cash beyond that buffer might also be considered for investment, though that carries capital risk a savings account doesn't.
How to compare and apply for business savings accounts
1
Tell us about your business
Share your trading history, turnover and what you need the product to do. It takes a couple of minutes.
2
We search the market
We compare providers across the UK on cost, features and eligibility so you only see options you can actually get.
3
Review your options
Fees, rates and terms side by side in plain English, with no jargon and no pressure to proceed.
4
Apply with confidence
Pick the provider that fits and complete the application online. We'll tell you exactly what documents you need.
Why choose Grow Your Business?
Wide choice of providers
We compare a broad range of UK providers so you can find the option that actually fits how your business operates.
Exclusive offers
We work hard to bring you exclusive deals, switching incentives and cashback where they're available.
Simple and fast
It takes just a few minutes to compare with us — and the deal you find could be well below what you pay today.
What types of business savings account are there?
There are more options available than ever, so it pays to match the product to how your business actually operates.
Easy-access business account
Withdraw funds anytime without penalty, ideal for tax reserves and short-term cash buffers. Rates are typically a little lower than fixed-term equivalents.
Fixed-term business deposit
Locks funds away for a set term, commonly three months to two years, for a guaranteed higher rate. Best for cash you're confident won't be needed before the term ends.
Notice business account
Requires 30 to 190 days' notice before withdrawal, sitting between easy access and fixed terms on rate and flexibility. Useful for planned expenses like an upcoming tax bill or equipment purchase.
Providers we compare
UK banks offering FSCS-protected savings accounts to limited companies and sole traders.
Aldermore
Shawbrook
Cambridge & Counties
Redwood Bank
Allica Bank
Hampshire TrustComparing with us is a no-brainer
“We moved our VAT reserve into a 95-day notice account and it now earns more than four grand a year doing nothing.”
Steve, Glasgow
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Read guidebusiness savings accounts FAQs
Is business savings interest taxable?
Yes, interest earned by a limited company is subject to corporation tax as part of its taxable profits, so keep records for your accountant.
Is my business's money protected in a savings account?
Yes, up to £85,000 per business, per FSCS-authorised institution, in the same way as personal savings protection.
Can sole traders open a business savings account?
Yes, most providers offer business savings accounts to sole traders, though some require an existing business current account with them first.
What happens if I withdraw early from a fixed-term account?
You'll typically lose some or all of the interest for the remaining term, or be charged an early withdrawal fee, so only lock away funds you're confident you won't need.
Can I hold multiple business savings accounts?
Yes, many businesses split reserves across an easy-access account for tax money and a fixed-term account for longer-term surplus cash.
Written by the Grow Your Business editorial team · Updated 26 July 2026