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If your business has cash sitting around doing nothing, a business savings account can help put it to work. And it won’t even ask you for a pay rise for the privilege.
It works a bit like a personal savings account, but unsurprisingly it’s built for businesses. You can use it to set aside cash for tax bills, quiet months, future costs or staff treats. And all the time you don’t touch it, it earns interest.
The amount of interest you earn depends on:
The account
The rate offered
How easily you want to be able to access the money
Business savings accounts are pretty simple. You pay money in - leave it - and earn interest on the balance.
The interest you earn can be paid monthly or yearly - it depends on the account. Some accounts pay you a fixed rate while others use a variable rate (meaning it can move up or down).
Let's dive into how they work in practice:
How quickly you can get your cash depends on the type of account.
Some accounts let you withdraw whenever you like. Others ask for notice, such as 30, 60 or 90 days.
Fixed-term accounts lock your money away for an agreed period of time.
In general, the less access you have, the better the rate may be.
For example, an easy access account gives you flexibility, but may pay less interest. A fixed-term account may pay more, but your cash is out of reach for longer (unless you’re happy to pay a penalty).
A business savings account can also help you organise your business funds. You could use the pot to separate funds for VAT bills, emergency cash flow, future projects or seasonal dips in income. Basically, anything you don’t want vanishing into everyday spending.
Every business has different savings needs, so there’s no one-size-fits-all account. Here are some popular options worth knowing about.
Easy-access business savings accounts let you withdraw money whenever you need it – though they might restrict how many times you can withdraw in a given month. They’re handy for emergency funds or cash you might need at short notice. The trade-off? The interest rate may be lower than other options.
Notice business savings accounts ask you to give warning before taking money out. So you might need to give 30, 60 or 90 days’ notice - but in return, you could get a better interest rate. These can work well for the cash you know you’ll need down the line, but not immediately.
Fixed-term business savings accounts lock your money away for a set period. This could be six months, a year, two years – or longer. You tend to get a fixed interest rate, so you know what you’ll earn. The catch? You can’t access the money until the term ends without paying a penalty.
Yes, many providers offer business savings accounts for sole traders. Though you’ll most likely need to show ID, proof of address and info about your business.
Usually, yes. Eligible deposits are protected up to £120,000 per banking group, not account – for example HSBC and First Direct are part of the same group. Always check before you apply.
Yes, savings interest is usually taxable. How it’s taxed depends on your business structure and how much interest you make. For specific advice, it’s best to check with an accountant or financial advisor.
Often, yes. Business current accounts are built for everyday spending, while savings accounts are built to grow spare cash.
It depends on the account you opt for. Easy-access accounts are flexible – so yes, you can - while notice and fixed-term accounts make you wait.
Sometimes – but not always. Many providers ask you to link a business current account so they know where money is coming from. But each provider is different - check with them before starting the application if it’s important to you.
Page last reviewed: 11/05/2026
Reviewed by: Alex Ryde
