Disclaimer: For informational purposes only — not financial advice. Rates and products change frequently. Always verify directly with the provider or via an FCA-authorised comparison service before applying. Rates shown verified May 2026 and are variable unless stated.
UK business savings rates have risen significantly since 2022 as the Bank of England base rate reached 5.25% before easing slightly in 2025. The best instant access business savings accounts now offer 4.00–4.33% AER — significantly better than most business current accounts. If your business is holding cash in a current account earning 0–0.5%, moving it to a savings account is the simplest return improvement available.
Best business savings accounts UK — May 2026
| Provider | Rate (AER) | Account type | Min deposit | FSCS protected | Best for |
|---|---|---|---|---|---|
| Tide Instant Saver | Up to 4.33% | Instant access | No minimum | ✓ (via ClearBank, £120k combined) | Tide account holders |
| Allica Bank | 4.00% | Easy access | £1,000 | ✓ | Best standalone rate |
| Redwood Bank | 4.80% (1yr fixed) | Fixed term | £1,000 | ✓ | Locking away cash for 1 year |
| Redwood Bank | 4.30% (95-day notice) | Notice | £1,000 | ✓ | Higher rate with some flexibility |
| Aldermore | 2.45–4.00% | Easy access + fixed | £1,000 | ✓ | Range of options, strong service |
| OakNorth | Competitive (variable) | Notice + fixed | £10,000 | ✓ | Larger businesses £10k+ |
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★ EDITOR'S VERDICT For businesses with a Tide current account: Tide Instant Saver at up to 4.33% AER opens instantly with no separate application. For the best standalone easy access rate without switching banks: Allica Bank at 4.00% AER with a £1,000 minimum. For cash you can lock away for 12 months: Redwood Bank at 4.80% AER is the strongest 1-year fixed rate available. Important: Tide and Capital on Tap savings are both held by ClearBank — if you use both, your £85,000 FSCS protection is shared across all ClearBank accounts, not applied per account. Check this before depositing large amounts across multiple ClearBank-held products. |
Types of business savings account
There are three main structures:
- Instant access / easy access — withdraw at any time with no penalty. Lower rate than notice or fixed accounts. Best for operational reserves you may need quickly.
- Notice account — give 30–120 days notice before withdrawing. Higher rate than instant access, but your cash is not immediately available. Best for reserves you are confident you will not need urgently.
- Fixed-term deposit — lock your money for a set period (6 months to 3 years) at a guaranteed rate. Highest rates but no access during the term. Best for surplus cash you will not need until a known future date.
FSCS protection for business accounts
The Financial Services Compensation Scheme (FSCS) protects up to £85,000 per authorised institution. If you hold savings across multiple accounts at different banks, each is protected separately. If you hold multiple accounts at the same institution (or institutions sharing a banking licence), the £85,000 limit applies across all of them combined.
Tide and Capital on Tap savings are both held by ClearBank — the combined FSCS limit applies. Wise Interest is a money market fund, not a deposit — capital is at risk and FSCS does not apply.
Tax on business savings interest
For a limited company: interest is business income, subject to corporation tax at 19–25% depending on profits. Report on your Company Tax Return (CT600). No personal savings allowance applies.
For a sole trader or partnership: interest is added to your self-assessment income and taxed at your marginal rate. Your personal savings allowance (£500 for higher-rate taxpayers, £1,000 for basic rate) applies only to personal accounts, not business accounts.
Frequently asked questions
Can a sole trader open a business savings account?
Yes — most business savings accounts are open to sole traders, partnerships, and limited companies. Tide, Aldermore, and Allica Bank all accept sole traders. Some accounts (notably OakNorth) require a minimum business turnover and are only open to limited companies with all directors as UK tax residents.
Is interest on a business savings account taxable?
Yes. For a limited company, interest earned in a business savings account is treated as business income and subject to corporation tax (currently 19–25% depending on profits). For sole traders and partnerships, it is added to your self-assessment income and taxed at your marginal rate. The personal savings allowance does not apply to business accounts.
What is the maximum FSCS coverage for a business account?
The Financial Services Compensation Scheme (FSCS) protects up to £85,000 per authorised institution for most business accounts. Note: Tide and Capital on Tap savings are both held by ClearBank — the £85,000 limit applies across all your ClearBank accounts combined, not per account. Some challenger banks use an Electronic Money Institution licence rather than a full banking licence, which means FSCS protection may be structured differently — always check.
What is the difference between a notice account and a fixed-term deposit?
A notice account requires you to give advance notice (typically 30–120 days) before withdrawing funds. You can add money at any time and the rate is variable. A fixed-term deposit locks your money for a set period (6 months, 1 year, 2 years) at a guaranteed rate. Fixed-term deposits pay higher rates but you cannot access the funds early without penalty.
Do I need a business current account to open a business savings account?
Sometimes yes, sometimes no. Tide Savings requires an active Tide current account. Allica Bank and Aldermore offer savings accounts independently of any current account. If you already have a Tide or Starling current account, opening their linked savings product is instant. If not, standalone savings accounts from Aldermore or Allica give better rates without requiring you to switch your main account.
Disclaimer: For informational purposes only — not financial advice. Rates and products change frequently. Always verify directly with the provider or via an FCA-authorised comparison service before applying. Rates shown verified May 2026 and are variable unless stated.
