Easy Access Business Savings Accounts

A Comparison of Easy Access Business Savings Accounts in the UK

For any business, maintaining a degree of financial flexibility is important. Easy access business savings accounts are a foundational tool for managing surplus cash, offering a secure place to segregate your funds while ensuring you can get to them quickly when needed. These accounts provide a vital first step away from a standard current account, allowing your business’s money to start earning interest without being tied up, making them ideal for building an emergency fund or holding short-term operational cash.

How Easy Access Business Savings Accounts Function

An easy access, or instant access, business savings account is precisely what its name implies. It allows you to deposit funds and withdraw them without having to give any notice to the bank. This immediate accessibility is the core feature and primary benefit of this type of account. It acts as a holding pen for your company’s liquid capital, separating it from the day-to-day churn of your main business current account while providing a modest return.

The Primary Benefits of Easy Access Savings

The key advantage is flexibility. Business opportunities and challenges can arise unexpectedly, and having immediate access to your cash reserves provides peace of mind and agility. You can move money to cover an unforeseen cost or seize a time-sensitive opportunity without penalty or delay. They are also an excellent tool for accumulating funds for a known upcoming expense, such as a tax payment, allowing you to earn some interest in the weeks or months prior.

Potential Drawbacks to be Aware Of

The trade-off for such high flexibility is the interest rate. Easy access accounts tend to offer lower rates of interest compared to notice or fixed-rate accounts where you agree to lock your money away for a period of time. The interest rates offered on these accounts are almost always variable, meaning the provider can change the rate at any time.

Important Factors for Comparison

When choosing an easy access account, it’s important to look beyond the initial headline rate and consider the full terms of the product.

Understanding the Interest Rate

While the rate is a key factor, check the details carefully. Is the advertised rate an introductory bonus that will drop significantly after a set period, usually 12 months? The Annual Equivalent Rate (AER) is the most effective figure for comparison, as it reflects the effect of interest being compounded over a year.

Conditions on Withdrawals and Deposits

Although these are ‘easy access’ accounts, some may come with certain conditions. Check if there is a limit on the number of withdrawals you can make within a certain period without impacting your interest rate. Also, review any minimum or maximum deposit levels required to open or operate the account.

Method of Account Management

Consider how you want to interact with your account. Do you prefer the convenience of a fully featured online portal and mobile app, or is access to a branch important for your business? The level of customer support and the ease of making transactions are practical considerations for busy companies. 

The Account Opening Process

Applying for an easy access business savings account is generally a straightforward process. You will need to provide standard information about your business, including its registered name and address, and its legal status (e.g., sole trader, limited company). You will also be required to provide proof of identity and address for the business owner or directors. 

The Security of Your Business Savings

Ensuring your business’s funds are protected is a fundamental requirement. In the UK, eligible businesses are protected by the Financial Services Compensation Scheme (FSCS). This scheme protects total deposits up to £85,000 per business, per authorised financial institution. This means that should your chosen bank fail, your money up to this limit is safe. For businesses holding larger sums, it is wise to spread the capital across multiple institutions to ensure all funds are protected.