Having money sitting in your business bank account is always nice but when it’s not needed for day to day business operations or cashflow you should consider the high interest business savings accounts available. These UK business accounts  can give a good rate of interest on your money making it work for you and many are instant access meaning if your business suddenly needs the cash you can still access it.

In this guide we’ll walk you through the best high interest business savings account and deals around so if you do want to open one you can do.

Highest interest business saving accounts

If you already know how business saving accounts work and simply want to know what the highest interest rate business accounts that are currently available then use the table below.

Our best instant access business savings account

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Our best fixed business savings account

Currently the rates for fixed business rates are not much higher than instant access rates, many companies are offering these but as you have to have your cash tied in for durations of 1-5 years most founders opt for the instant access.

Tide Business Savings Account - 4.33% AER (variable) interest

Tide are one of the most popular business accounts in the UK and there more recent business savings account that you can open has quickly become very popular too. The account is available to open to anyone regardless of who you bank with. This means it's a great option for any UK business user who is looking for a business account with a high interest rate.

If you do want to also open a Tide business account then you can do so for free in a matter of minutes plus you can get £50 for free if you use code: FOUNDERPASS when you sign up as long as you deposit £50 within the first 3 months.

Tide business saving account is protected by the FSCS and allows instant access to your funds with no withdrawal penalties or fees. You can deposit into the account from any nominated account and you manage it all from their intuitive and well designed app. 

T&C’s: The Tide Instant Saver account offers eligible UK business owners and sole traders 4.33% AER variable on unlimited deposits until 31/03/2025. Variable rate correct as of 1st October 2024. Tide business savings accounts are FSCS-protected, provided by Clearbank. You will automatically have access to a Tide Instant Saver Account when you open a Tide business account. For full terms and conditions visit here. Customers joining Tide from 01/10/2024 will receive a 0.75% boost on top of the standard rate for Tide Instant Saver accounts. The promotional rate will expire after 31/03/2025 and revert to the standard rate.

How to open a Tide Instant Saver account

For those wanting to just open the instant saver account then follow these instructions:

1. Head to the Tide website and click on savings account under 'Business accounts'
2. Then click on the 'Open a savings account'
3. Follow the instructions and you'll have your new savings account open

How to open a Tide Business Account and Instant Saver account

For those wanting to get that extra £50 and open a business account as well as an instant saver you can do the following:

1. Head to the Tide website and open a new account business account, you'll need to download the Tide app
2. Use code: FOUNDERPASS if you want £50 free (when you deposit £50 within the first 3 months)
3. Once opened, you can request to open a Tide Instant Saver account
4. This typically takes around 10 minutes to open in total

You'll then be able to transfer money and withdraw from your Tide business current account to your instant savings account whenever you like.

Any new customers can use our Tide referral code to open a business account for free and get the offer, you can find out more and read all the terms and conditions on the Tide website.

Why use a high interest business savings account

For lots of businesses the only business bank account they have will be a business current account and this is ideal for the day to day running of your account. These business current accounts are ideal for taking payments, paying invoices, payroll, direct debits and so on however where they don’t work well is when you have a excess cash in your account that you don’t need to use soon.

This is because this surplus money will simply sit in your current account and in most cases not earn any interest or if they do it will be a very small amount. This is where a business savings account can come into play, these types of accounts are purely designed as a place for your businesses excess funds to sit in and to earn higher interest rates.

Much like how you would open a personal savings account if you had a large sum of money in your current account, more and more businesses are now making sure that they have a business savings account open and either funded with the excess cash the business doesn’t need in the short term or waiting for a time when this arises and then you can transfer the excess funds then.

These business savings account also can act as a place for you to keep funds ready for emergencies, cashflow issues, sudden unexpected costs and so forth whilst also earning you interest.

Types of high interest business savings accounts

There are different types of business savings accounts with high interest available and there core differences tend to be the following:

• Ease of access to your money - mainly in terms of speed
• Interest rate - the level will vary typically depending on type of account

Ease of access

This is an important factor that you need to consider when it comes to business savings accounts, much like with personal savings accounts you’ll find that business accounts have different access rules.

Instant access business saving accounts

Often the choice for the majority, you'll find many of these types of account available to you and these offer you the following:

• Instant access to your savings - For when you need them (some may have limits of number of withdrawals)
• Variable interest rates - These rates are subject to change at any time

These as the name states mean you can access your savings instantly and are often the most popular because it allows businesses the peace of mind in knowing that they can access the funds in their savings account at a moments notice. So if ever there is a urgent need for the funds you don’t need to worry about waiting days, weeks or even months to access it. 

Note sometimes there are withdrawal limits on these types of accounts, but these will be stated when you sign up but keep an eye for them.

Fixed rate business savings account

These are often selected for those wanting the highest yield on their money but are also happy to have it locked away for longer periods of time.

• Fixed term means you can’t access savings till the end date
• Fixed interest rate for the duration of the term (typically some of the highest interest rates)

If your business has large amounts of cash which is not often needed and you have a healthy cashflow then you may want to consider fixed rate business accounts. These will tie your money into those accounts for a set period and this can range from 6 months up to 5 years. 

In general, the longer the term before you can access the money the higher the rate but this isn’t always the case. 

It’s important to remember that although your business may have healthy cashflow, large unused funds and be in a good position, markets and industry can change and this may not be the case in the future so always think very carefully about locking your money away. 

Business Notice savings account

For those looking for a happy medium you'll find that this type of account may be more suited to you, these include:

• Notice periods - Meaning you have to give notice in order to withdraw funds
• Variable interest rates -Typically higher than instant but lower than fixed

This is sometimes the best compromise between an easy access (instant) savings account and a fixed rate one. They will require you to give a certain period of notice to get your funds and this ranges from a week up to 6 months. These do tend to have lower rates than the longer fixed rates but higher than instant access so can be a good balance for business owners.

Business savings vs personal savings accounts

You may be thinking why don’t I just take the money out of my business and put it into a personal savings account and there are various reasons why this is often the case.

The first reason is that you can’t simply withdraw money from your limited company and pop it straight into your savings without tax implications. Much like how you can’t just take funds out of your business without it either being a dividend, on payroll or a repayment of a directors loan.

Your businesses money is separate to your personal account therefore you always have to treat it like this. 

If however you are simply a sole trader, then you may be able to do this but also note that you will likely need to ensure that any interest earned on that money is declared and this will likely have tax implications too. 

Are business savings protected by the FSCS?

This is one of the first questions you should be asking or looking for when it comes to selecting a business savings account in our opinion. This is because the Financial Services Compensation Scheme that is available for money in your personal account in the UK also protects funds held in those accounts that are protected by this. 

This protection means your eligible funds are protect up to £85,000 in total, note that the limit will apply to any deposits you have with that bank typically. We always recommend that you check with the company if you’re unsure if your funds will be covered.

If the company that is offering a business saving account is covered by the FSCS then it likely will state this, if you’re not sure then you can ask them or you can contact the FSCS and they will be able to confirm if they are or not.

Highest variable business savings account

If you’re looking for the highest variable business saving accounts then you need to be aware that with variable rates they can go up and down at any time, so be aware of this when selecting the account you want to go with.

Currently you’ll see the table below for the highest variable interest rates for business accounts specifically savings accounts. 

TABLE

Note: We aim to keep the table above as up to date as possible but as is the nature of variable accounts these can change at a moments notice so please double check with the bank or company that you want to use before signing up so you’re sure of the variable interest rate you’re signing up for and any other important information about it.

Highest fixed rate business savings accounts

If you are happy to have your funds locked away for longer periods and want the highest fixed rate business savings account then you can compare the options below. 

Remember that fixed rates mean you typically can’t access your fund until the end of the term, even if you urgently need it, so it’s seriously worth considering if you are happy with this and can’t foresee any circumstancve when you may need to access it. 

Some fixed rate accounts may allow you in emergencies to access your funds but this is often with penalties and in most cases isn’t an option on most accounts.

Of course the pay off to this lack of access is that you often get some of the highest yielding rates around and as they are fixed you’ll know you’ll get this rate for the duration of the term. 

What about tax on the interest?

It’s no surprise that you won’t earn interest and the tax man won’t take any of it sadly, the interest that you’ll earn on your funds in business saving accounts are paid to your gross, meaning that you or your accountant will need to take this interest into account in order to pay the right tax on it. 

For limited companies the interest will be seen as income/profit to your business so will be used in calculations for the total tax you will be due to pay. If on the other hand you are a sole trader then you’ll need to state this interest earned as with other interest from personal accounts in your self-assessment tax return and the tax will be calculated according to your other income.

Other factors to consider when selecting a business savings account?

Apart from the core factors of interest rate and ease of access when selecting a high yield business savings account you should also consider several other things such as: 

Ease & speed of opening 

Some business accounts will make opening an account straight forward and easy with opening in a matter of minutes, on the other hand others sometimes takes days or even weeks to open so this is certainly something to consider.

Features of the account

Depending on the company/bank you choose to open with the features of the account will vary, some will give you access via a mobile app, others solely via their website, some will have physical branches and some won’t. 

How you currently and will operate in the future will be the key factor to how you want to select the account based on this. We find most founders nowadays want an app as a key priority for their accounts and if a company doesn’t allow this then it’s seen as a big issue.

How and where you can deposit funds from

Check how and where you can deposit into the business savings account, some banks or companies may require you to only deposit from one account or a linked current account from the same company, others will allow you to deposit from any account that you’d like to. 

In most cases you'll need to set up a nominated account and this will be the core account that you move funds from into your business savings account, most often this will be your core business current account.

How often interest is paid

Look at how often the interest is paid, many will pay you monthly where as some will pay annually, this will make a difference to how much you will earn as the compound affect will come into play.

Minimum opening deposit 

Different accounts will have different minimum deposits amounts that you need in order to open an account, often lots will start at just £1 but some may require you to deposit at least £1,000. So it’s important to check this and if it fits with the amount of money you’re planning to deposit.

Bonus rates

Some business saving accounts will give you a bonus rate, typically this is on joining and opening the account. This will be normally be an additional interest rate for a set time i.e an extra 1% interest on top of the rate for the first 6 months. 

This can lead to a higher yielding rate overall for that period but it’s always worth working out the long term interest rate you’ll get and if you’re happy with that and not solely going on the bonus rate you initially get.

Frequently Asked Questions

Who can open high interest business accounts?

Each company will have different eligibility requirements but in general the highest saving rates will be available to limited companies and those who may have slightly higher funds to deposit. 

Can I open multiple high yield savings accounts?

Yes in most cases you can open multiple business savings accounts with higher interest rates,

Which is the best high interest business account?

There is no definite answer to this as it will depend on your business, your situation, how much money you want to deposit and many other factors.

Ultimately it is down to you to look at the options available and work out which is suited to your specific situation and make your own informed decision. 

Is the account with the highest yield always the best one to choose?

In most occasions no, this is because you need to factor in many other things, you may find an account with a very high interest rate which will yield you the most however it may mean your money in locked in for 5 years or it may only be available for those with large deposits. Although the interest rate and yield figure will play an important role in your decision making it's important to look at all the factors before making any decision.