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Best Business Savings Accounts
Can companies open savings accounts?
Yes, businesses can open business savings accounts but you’ll need to check the eligibility criteria first. Different accounts might be for different businesses sizes.
Should companies use savings accounts?
A business savings account is optional. But if you have surplus cash, it can make sense to put that money in an account that pays interest.
What criteria should I use to choose a business savings account?
Your business’s savings account has to fit in with your overall financial strategy. Think about how often you need access to that cash, how the account can be managed, minimum and maximum balances and whether the account has FSCS protection.
Is there any benefit to corporate savings accounts vs regular savings accounts?
If you run a business, it’s sensible to keep your business finances separate from your own. If you’re a limited company rather than a sole trader, having a separate business bank account is a legal requirement.
Does the FSCS protect corporate savings accounts?
If your provider has a UK banking licence (keep in mind that a single licence may cover many brands) your account will be covered by the FSCS.
Who gets what share of a company's savings?
Business savings account interest is paid gross, so it must be reported and taxed as income. The amount of tax you owe depends on your business type and the income you generate.
The personal tax allowance is used by sole traders to determine how much tax they must pay on their savings. Depending on your other sources of income, any interest earnings in the 2023/2024 tax year in excess of £12,570 may be subject to tax at your personal tax rate. When filing your annual self-assessment tax return, be sure to include the amount of interest you have accrued.
Profits earned by a limited liability company are subject to corporation tax. You should include the interest you earn on any company savings accounts when determining your net profit. Your tax liability will be calculated using your financial statement at the end of the fiscal year.
Where do company bank accounts and business savings accounts differ?
A savings account is a place to save money that you will not need for a while, whether that is a few weeks or a few years from now. A current account is used for regular everyday banking transactions. There is often no interest accrued on the balance of a current account. Even if there is, the rate is usually far lower than what you might obtain with a savings account.
For what time period must funds be held in a company savings account?
It is totally up to you how long you save for. Saving for at least a year can give you a better return, but an easy access or notice account is better if you need quick access to your funds.
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