A business savings account holds the cash your company will not spend for a while and pays interest on it. Which one suits you comes down to a single question: when do you need the money back? The familiar advice is that the longer you tie it up, the more you earn. Half of that still holds, because fixed-term bonds do pay the most. But notice accounts, where you wait 30 to 180 days for your own money, were paying less than the best instant-access accounts on 20 October 2026, so the middle rung of the ladder is the one to check hardest.

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Easy access, notice and fixed term: what you give up for a better rate

Business savings accounts come in three shapes, and what separates them is not the rate. It is how long the bank can keep hold of your money after you ask for it back.

• Easy access, sometimes called instant access. A variable rate, and you withdraw when you choose.
• Notice accounts. Also a variable rate, but you have to tell the bank a set number of days before the money can leave. Periods of 30, 95, and 120 days are common, and some run as long as 180 days.
• Fixed-term bonds. A guaranteed rate for the whole term, and usually no access at all until it ends.

Your business bank account is still where money comes in and bills go out. A savings account sits beside it, and you move money across when you have more than you need that month.

Two limits are worth knowing before you plan around one. Some accounts cap the number of free withdrawals, and going over the cap can cut your rate for the period or trigger a fee. And you generally cannot pay a supplier or run payroll straight out of a savings account, so the money has to come back to the current account first.

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Why a notice account may pay you less than instant access

The ladder is meant to work like this: the longer you agree to wait, the more the bank pays you for waiting. On 20 October 2026 the middle rung was missing.

Across the market that day, the best fixed-rate business bond paid 5.13% AER, the best easy access account 4.18%, and the best notice account 4.15% – less than easy access, in exchange for waiting up to 180 days (Moneyfacts, checked on 20 October 2026). The same inversion turns up inside individual banks: on the same day, Shawbrook advertised 4.18% AER on its easy access business account and 3.51% on its 100-day notice account.

So the part of the rule about fixed terms holds, and it is worth real money: locking cash away for a year pays roughly a percentage point more than leaving it where you can reach it. The notice tier is the one that has stopped being reliable. It still works at Aldermore and Redwood, and not at Shawbrook, Allica, or Virgin Money.

The test is simple, and you only have to do it once. Before you accept a notice period, check the account against the best easy access rate you could actually get. If the notice account is not beating it, you are giving up access for nothing.

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What to put in it: the tax money, the buffer, and cash with a date on it

Companies use a savings account for three jobs: the tax they have collected but not yet handed over, a buffer for a quiet month, and money set aside for something they have already decided to buy. Each one points at a different account type, because each has a different deadline.

VAT is the shortest fuse. The return and the payment are usually due one calendar month and seven days after the end of the VAT period, and the money has to have reached HMRC by then. If you file quarterly, that pot is never still for long, so keep it where you can move it the day you need it.

Corporation tax gives you most of a year. On profits up to £1.5m it is due nine months and one day after your accounting period ends, so a company with a 31 March year end pays on 1 January. That is a long stretch of interest on money whose date you already know, and it is the one case where a notice account, or a fixed term that matures before the deadline, genuinely earns its restrictions. Our guide to corporation tax deadlines has the full timetable, and paying your VAT bill covers the quarterly dates.

The buffer is the harder one, because there is no right figure. Work out what one quiet month costs you in the things you cannot postpone – payroll, rent, loan repayments, and the subscriptions nobody ever cancels – then look at how far income actually fell in your slowest month last year. Keep that much where you can reach it, and everything above it can go somewhere that pays more. A cash flow template makes the sums quicker.

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How much of your company's money the FSCS protects

Your company's deposits are protected up to £120,000 per bank, building society, or credit union, and that protection is the company's own. The Financial Services Compensation Scheme says a business that is a separate legal entity 'can claim up to £120,000 for its business account', and that you can separately claim up to £120,000 for a personal account you held at the same bank. The limit rose to £120,000 on 1 December 2025, and size is irrelevant: the FSCS 'generally protect companies' deposits, regardless of the size of the company'.

The limit is per bank, not per account. Three accounts at one bank still share one £120,000, so a company holding £200,000 in a single place has everything above the limit uncovered. Split it across two banks and all of it is protected – as long as they really are two banks.

That condition is where careful splits come undone. Brands that share a banking licence count as one bank, and the £120,000 applies to the total across them. Virgin Money's business transferred to Nationwide on 2 April 2026, so a company that had deliberately spread money between the two now has one limit between them, not two – and the FSCS's own published list of Nationwide's brands has not caught up with it. That is the argument for never taking this from an article, including this one: check the Financial Conduct Authority's register for the names your bank trades under, then decide where to put the money.

If you hold more than the limit, you can open accounts at separate banks yourself, or use a cash savings platform, which spreads money across several banks from one application. There are two things not to lean on. The FSCS protects certain qualifying temporary high balances up to £1.4m for six months from the date they were first paid in, but that cover is tied to specific life events rather than to trading cash. And money market funds and gilts are investments rather than deposits, so FSCS deposit protection does not apply to them.

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Your company pays corporation tax on the interest

Interest your company earns is part of its taxable profits, so the rate you compare is never the rate you keep. HMRC counts it as income from investments rather than from trading, and it is taxed at your company's corporation tax rate: 19% where profits are £50,000 or less, 25% where they are over £250,000, and the main rate reduced by Marginal Relief in between. Both thresholds shrink for short accounting periods and for companies with associated companies, which is what catches groups out.

Say your company earns £10,000 of interest in a year. What it keeps depends on the rest of its profits:

Figures are illustrative, at the rates above.

Interest is usually paid without tax taken off, so the bill turns up later than the money does. It also counts towards the profits that set your rate, which can nudge a company from one band into the next. Both are worth raising with your accountant before you move a large balance: our guides to tax planning and corporation tax payments cover the mechanics.

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What to check before you open an account

The rate is the headline and it is rarely what decides it. Eight things change the answer:

• The AER. The annual equivalent rate puts accounts that pay interest at different intervals on one comparable number.
• Fixed or variable. A variable rate can be cut at short notice, and some notice accounts are priced as a stated margin below the Bank of England base rate, so they move the moment it does.
• Whether the headline rate expires. One instant saver on the market advertises up to 4.25% AER, but for four months only, and only if you switch your current account across and pay in £10,000 within a fortnight. After that you drop to the standard rate for your plan.
• The nominated account. Most specialist savings banks need a nominated current account in the company's name to move money in and out. It can usually be your existing bank, but it has to be a UK-regulated one, and that rules more companies out than you would expect.
• Whether you have to bank with them. Some accounts are only open to the provider's own business current account customers, and the in-app savings pots at the app-based banks are features of their current accounts rather than standalone products.
• Minimum and maximum deposits. Opening balances across the specialist banks run from £1 to £20,000, and some accounts pay the headline rate only on balances inside a particular band.
• The banking licence. Check it against the other accounts the company holds, so a split you made for safety is not sharing one limit.
• What happens at maturity. A fixed-term bond that matures with no instructions usually rolls into an easy access account at whatever rate the bank picks. At one bank that default pays 0.50%, which would undo a year of careful choosing.

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Where to find today's rates, and why they are not on this page

This page carries no table of provider rates, and that is deliberate. Comparison sites rebuild theirs continuously – Moneyfacts updates its business savings tables through the day – and anything we published would be a snapshot with our name on it and a date that kept getting older.

How fast is fast? Cambridge & Counties publishes an issue number and a launch date for every account it sells, which makes the repricing visible. Its one-year business bond is on its 102nd issue. Its six-month bond went through 12 issues in about 15 months, one of them on sale for under three weeks. Its 30-day notice account repriced four times in 13 months, up and down. Over the same stretch the Bank of England's base rate changed once, in December 2025, and has sat at 3.75% since. So these rates do not drift along behind the base rate. Providers move them, often, and in both directions.

What to do instead: compare live rates on a site that shows when it was last updated, look at that date before you trust the numbers, then put the shortlist through the checklist above. The account at the top of a best-buy table is frequently one your company cannot open, or one whose rate will not be there in a month.

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What you need to open one as a limited company

Most banks ask for the same handful of things, and you can usually do it online in one sitting. You will need:

• Your company name and Companies House registration number.
• Your registered company address.
• Names, dates of birth, and home addresses for the directors and anyone with significant control.
• Identity and address documents for whoever is applying.
• The details of the business current account the money will move in and out of.

The last one trips companies up, and not for the obvious reason. The nominated account has to be in the company's name at a UK-regulated bank or building society, and some savings providers will not accept an account held with an e-money provider. A company that banks entirely with a fintech can find the best savings rates closed to it, so it is worth checking that before filling anything in.

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When a big cash balance starts to matter for tax

Cash the company holds for tax, wages, and a sensible buffer is part of running a business. A large pile with no planned use is a different thing, and it can matter when you come to sell the company or wind it up.

Business Asset Disposal Relief reduces the tax on gains when you sell shares in a trading company: 18% on qualifying gains disposed of from 6 April 2026, up to £1m of relief over a lifetime. To qualify, the company must not have substantial non-trading activities, and a large investment portfolio or cash balance is one of the things HMRC looks at. Its capital gains manual says a case is 'unlikely to warrant any more detailed review' where nothing suggests the non-trading element is over 20%. The same page says those indicators 'should not be regarded as individual tests to which a percentage limit applies', and that 'there is no simple formula to this'. So treat 20% as the point where HMRC starts looking rather than a line you are safe behind, and talk to an accountant long before you sell. Our guide to capital gains tax for businesses covers the rest of the picture.

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When a company with savings still has a cash flow gap

A healthy savings balance and a cash flow problem are not opposites. Most of what sits in a business savings account is already spoken for – the VAT, the corporation tax, the deposit on the van you have agreed to buy – so a company can look comfortable and still be a fortnight short. We do not offer savings accounts; we lend to UK limited companies, and that fortnight is the gap we lend into. If a VAT or corporation tax bill falls due before your customers pay, an iwoca Flexi-Loan lets you pay it on time and repay early with no fee once the cash arrives, instead of breaking a fixed-term account or spending the pot you need in January. It bites hardest where income is seasonal or customers pay on long terms, because the bill always lands in the quietest month – which is the argument for managing cash flow around the dates you already know.

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Business savings account FAQs

Does my limited company need a business savings account?

Only if it holds cash it will not touch for weeks. If every pound that comes in goes back out within days, your current account is doing the job and a savings account only adds a transfer step. Once there is a tax pot or a buffer sitting still, the interest is worth collecting.

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Can my company hold more than one savings account?

Yes, and the companies that do this well usually hold several: one for the tax, one for the buffer, one for a planned purchase. Spreading money across banks that do not share a banking licence also extends your FSCS cover, which starts to matter once the balance passes £120,000.

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Does iwoca offer a business savings account?

No. We lend to UK limited companies, so we do not take deposits and we are not a bank. Any business savings account you open will be with a bank, building society, or credit union, and it is their FSCS protection that covers the money.