Compare business savings accounts in the UK

Business savings accounts at a glance

A business savings account holds cash your business doesn't need for day-to-day spending and pays interest on it. Here are the key facts for UK businesses in 2026:

• Idle cash earns little. In August 2026, UK businesses earned an average of 1.97% on instant-access deposits and current accounts, against 3.47% on new fixed-term deposits (Bank of England).

• Protection depends on your business type. A limited company or LLP has its own £120,000 FSCS limit. A sole trader's business and personal savings at the same bank share one £120,000 limit.

• Interest is taxable. A limited company pays Corporation Tax on it, at 19% to 25%. Sole traders and partners pay Income Tax on it as their own savings income.

• Bank Rate is 3.75% (held on 17 September 2026; next decision 5 November 2026). Business savings rates are mostly variable and tend to follow it.

• Most accounts need a business current account to pay money in and out, though it doesn't always have to be with the same provider.

What is a business savings account?

A business savings account is a deposit account held in the name of a business, rather than an individual, that pays interest on cash the business doesn't need right away. It is separate from your business current account, which is for paying suppliers, staff and bills.

Businesses typically use one for a tax reserve (VAT and Corporation Tax set aside until they're due), an emergency buffer to cover costs if income drops, or cash being saved for a planned purchase or investment.

Most are available to limited companies, LLPs, partnerships and sole traders. Some providers also accept charities, clubs, societies and trusts, often through separate accounts.

Which type of business savings account suits your business?

The right type of business savings account depends on when your business will need the money. The longer you can commit it, the higher the rate tends to be.

How much could your business earn after tax?

A limited company keeps 75% to 81% of the interest its savings earn, because interest is added to its profits and taxed at the Corporation Tax rate. Here is what £100,000 could earn in a year, if rates don't change:

The 19% rate applies to companies with profits up to £50,000 and the 25% rate to profits above £250,000; in between, marginal relief means the effective rate falls somewhere between the two.

Sole traders and partners pay Income Tax on the interest as part of their own savings income, at 20%, 40% or 45%. Because it's taxed as personal savings income, the Personal Savings Allowance can apply: up to £1,000 a year tax-free for basic-rate taxpayers. From 6 April 2027, savings income tax rates are set to rise by 2 percentage points.

Compare against inflation, too. With inflation at 3.1%, £100,000 left at 0% loses about £3,100 of spending power in a year. A rate above inflation after tax is what keeps your reserves' real value intact.

This is general information, not tax advice. Speak to your accountant about your business's situation.

How much cash should your business keep accessible?

Most businesses keep enough cash for three to six months of fixed costs in an instant-access account, and put money they won't need for longer into notice or fixed-term accounts that pay more. The right split depends on how predictable your income and costs are.

A simple way to divide your business cash:

Example. A company with £15,000 of monthly fixed costs and £200,000 in the bank might keep £15,000 in its current account, £60,000 in easy access savings as a four-month buffer, £45,000 in a 95-day notice account for its next Corporation Tax bill, and £80,000 in a one-year fixed-term deposit.

If income is seasonal or uncertain, keep a larger buffer. A longer notice period or fixed term isn't worth a slightly higher rate if your business might need the money before it ends.

Is your business's money protected by the FSCS?

Yes, usually: the FSCS protects eligible business deposits with a UK-authorised bank, building society or credit union up to £120,000 per depositor, per banking licence, whatever the size of the business. How much is covered depends on your business's legal structure.

What this means in practice:

• The limit is per banking licence, not per brand. Some banks run several brands under one licence, and deposits across them share one limit.

• Sole traders get less protection than it seems. With £90,000 in business savings and £60,000 in personal savings at the same bank, only £120,000 of the £150,000 is covered.

• Most financial services firms aren't eligible, such as banks, insurers and investment firms.

• Savings held through an app or platform are protected by the bank that actually holds the money, so check which bank that is.

If your business holds more than £120,000, spreading it across different banking licences keeps all of it within FSCS limits. You can check whether a bank is authorised, and under which licence, on the FCA Financial Services Register.

What are deposit platforms and when are they worth it?

A deposit platform lets your business open and manage savings accounts with several banks through one online account, so you can spread cash to stay within FSCS limits without filling in a separate application for each bank.

You pay money into the platform's holding account, then choose where to place it. Each deposit is held in your business's name at the chosen bank, and protected by that bank's FSCS limit.

How they make money. Most platforms are free to use but keep a share of the interest, often up to about 0.30%, which is usually already deducted from the rate shown. Cash waiting in the holding account may earn no interest.

When they're worth it:

• Your business holds more than £120,000, so a single bank can't protect it all.

• You want to compare and move between many banks without repeating onboarding checks.

• You hold enough to meet minimum deposits, which are often £50,000 to £100,000 or more for businesses.

For smaller balances, opening an account directly with one bank is usually simpler and pays the full rate.

How to open a business savings account

Most business savings accounts can be opened online in 15 to 30 minutes, but some providers take several days to complete checks on the business and the people behind it. Before you apply, have these ready:

1. Business details: legal name, trading address, nature of the business and expected deposits. Limited companies and LLPs also need their Companies House registration number.

2. People with significant control: names, dates of birth and addresses of directors, partners and anyone who owns or controls more than 25% of the business.

3. ID for those people: usually a passport or driving licence, often with a selfie check in an app.

4. A nominated business current account in the same name, used to pay money in and receive withdrawals. Most providers only send withdrawals back to this account.

5. Your first deposit: some accounts accept £1; others, and most deposit platforms, require £10,000 to £100,000 or more.

Sole traders can open a business savings account with many providers, but some only accept limited companies. Check eligibility before you apply.

Charities, clubs and trusts usually need a specific account type and extra documents, such as the governing document and details of trustees or officers.

Do you need a business current account with the same provider? Some app-based providers only offer savings to existing current account customers. Standalone savings accounts and deposit platforms let you keep your current account where it is.

How we compare business savings accounts

We list business savings accounts from providers we work with commercially. Our panel changes over time and doesn't cover the whole market, so other accounts may pay more.

For every account we check the AER against the provider's own terms and summary box, along with the rate after any introductory offer, conditions needed to get the rate, minimum and maximum balances, eligible business types, withdrawal rules, and which bank holds your money for FSCS purposes. For platforms, we show rates after the platform's share. We review rates every week and after every Bank of England decision. Partner products are shown first by default; you can sort by interest rate or minimum deposit instead. For more: How we rank.

Sources

• FSCS – Small businesses & limited companies protection

• FSCS – Banks, building societies and credit unions

• Bank of England – Effective interest rates, August 2026

• Bank of England – Bank Rate

• UK Government – Corporation Tax rates

• UK Government – Marginal Relief for Corporation Tax

• FCA – Financial Services Register