As entrepreneurs, we all know that managing a small business or SME requires careful financial planning and management. From budgeting expenses to maximizing profits, every decision we make can greatly impact the success of our business. But among all the different aspects of financial management, one area that we often overlook is business savings. While it may not seem as exciting as generating revenue or expanding our business, having a dedicated business savings account can provide numerous benefits for our company. In fact, it can be considered as a smart investment that can help secure the future of our business.
So, if you have surplus funds, why not deposit your business revenue into a dedicated business savings account? In this article, we will explore the benefits of having a business savings account and discuss the 8 best business savings accounts that are available in the UK.
Why Have a Business Savings Account?
Before we dive into the best business savings accounts, let’s first understand why having a dedicated business savings account is important. Here are some key reasons:
1. Separate Personal and Business Finances: As a small business owner, it can be tempting to mix personal and business finances, especially in the early stages of the business. However, this can lead to confusion and difficulties in tracking expenses and profits. By having a dedicated business savings account, you can easily keep your personal and business finances separate, making it easier to manage and track your business expenses.
2. Emergency Fund: Just like a personal savings account, having a business savings account can serve as an emergency fund for your business. In case of unexpected expenses or a slow month, you can dip into your business savings to cover the costs without affecting your day-to-day operations.
3. Tax Benefits: In the UK, businesses are required to pay taxes on their profits. By keeping a portion of your profits in a business savings account, you can reduce your taxable income and save on taxes. Additionally, the interest earned on your business savings is also tax-free, making it a great way to save money for your business.
4. Interest Earnings: Speaking of interest, having a business savings account can also be a great way to earn some extra income for your business. Most business savings accounts offer competitive interest rates, allowing your money to grow while it sits in the account.
5. Invest in Your Business: Having a dedicated business savings account can also be a great way to save money for future business investments. From upgrading equipment to expanding your team, having a pool of savings can help you finance these projects without having to take out loans or use a line of credit.
The 8 Best Business Savings Accounts in the UK
1. NatWest Business Savings Account: As one of the largest banks in the UK, NatWest offers a competitive business savings account with a fixed interest rate for 12 months. The account requires a minimum deposit of £10,000 and allows unlimited withdrawals.
2. HSBC Business Savings Account: This account offers a variable interest rate and allows instant access to funds. It requires a minimum deposit of £1,000 and offers tiered interest rates based on the account balance.
3. Barclays Business Savings Account: With a competitive interest rate and no minimum deposit, this account is a great option for small businesses. It also offers a fixed interest rate for 12 months and allows unlimited withdrawals.
4. Lloyds Bank Business Savings Account: This account offers a variable interest rate and requires a minimum deposit of £1,000. It also offers tiered interest rates based on the account balance and allows unlimited withdrawals.
5. TSB Business Savings Account: With a fixed interest rate for 12 months and no minimum deposit, this account is a great option for businesses of all sizes. It also offers a bonus interest rate if no withdrawals are made in the first 12 months.
6. Santander Business Savings Account: This account offers a variable interest rate and allows instant access to funds. It requires a minimum deposit of £1,000 and offers tiered interest rates based on the account balance.
7. Metro Bank Business Savings Account: With no minimum deposit and a competitive interest rate, this account is a great option for small businesses. It also offers unlimited withdrawals and allows instant access to funds.
8. Aldermore Business Savings Account: This account offers a fixed interest rate for 12 months and requires a minimum deposit of £1,000. It also offers tiered interest rates based on the account balance and allows unlimited withdrawals.
In conclusion, having