When you run a business, you want the money you have to be secure. You also want your money to make you money in the form of interest. On top of all of that, you want to be able to access your money when you need it and have an account which accepts the amount that you are able to put away. All of these factors make for interesting comparisons between banks and building societies who offer business savings accounts. How do you choose the one that is perfect for you? One that maybe even feels tailored to your situation? Lets have a look!
The Interest
There is very little interest kicking about right now with bank accounts. The amount that were looking at as great now, you would have turned your nose up at a few years ago. For example, you might be lucky to get half a percentage interest rates. If you had £85,000 in one of the business savings accounts you decide on, 0.5% of that would earn you just over £400 in a year. Whilst that is definitely better than nothing, its not a great amount. With that in mind, whilst interest rates should be taken into account, right now, they definitely shouldn’t be the be-all-and-end-all. Most banks are there are thereabouts on the interest rates available, so look at customer reviews on things like customer service.
The Minimum Deposit
Something else you might wish to consider when looking at business savings accounts is the minimum deposit. if you’re a small business, you might not have a huge chunk to put in straight away. So the Cynergy Bank account which required a £10k deposit will not work for you. There are plenty of business savings accounts which don’t require a large deposit though. Most have no minimum amount.
The Minimum Term
You also need to look at the minimum term. Whilst some bank accounts offer instant access to your money, there are others which will make you wait for it. This could be for durations up to a year. Some business savings accounts will make you give notice before accessing your cash. Probably not ideal if you’re running a business which has been adversely affected by the global pandemic.
A Name You Trust
You might already have a current account with a high street bank and think their offering in the world of business savings accounts is the way to go. Maybe it’s a savings account or a mortgage. This is often what we do because we’re with the company for a reason and we trust them with our cash. You might stick with Santander or consider taking out business saving accounts with TSB or Barclays. This is completely understandable and many of us have this mindset Just ensure you’re getting the best deal from the names that you trust too.
Tech That Helps
Some of the names you may not have heard or or perhaps you don’t see with a present on the high street, usually offer something those high street names don’t. Newer companies have embraced tech and this puts you in control of your money. Easy to use mobile phone apps, open banking solutions, integration with bookkeeping software, automated business spending categorisation. These are just some of the areas of business admin which have been aided by new banks on the block.
Whoever you choose to bank with, ensure that they are fully regulated by the FSCS (Financial Services Compensation Scheme). Most are, but you want to be sure that you and your money are covered and protected. Do some research, see what business savings accounts are available and choose the perfect one for your situation.
