What business savings account should I open? A guide for business owners

We get it. What business savings account should I open is a common question, and the answer isn’t always straightforward. With so many options like instant access, notice periods, or fixed-rate accounts, it’s easy to feel overwhelmed. 

Finding the right account can be the difference between simply holding cash and turning it into meaningful earnings for your business.

Let’s break it down clearly and simply, shall we?

What exactly is a business savings account? 

Think of a business savings account as your company’s financial safety net, separate from your regular current account. It is a secure place where surplus business funds can earn interest, growing steadily without daily operational disruptions.  

The right savings account can help build your financial resilience and give you the confidence to grow your business. 

Exploring the different types of business savings accounts 

You have several options for your business savings: 

• Instant access savings accounts allow quick access to your money. These are ideal for businesses that may need immediate funds to cover unexpected expenses or opportunities. 
• Notice savings accounts require advance notice, typically between 30 to 90 days, before you can access your savings. In return, they may offer more competitive savings interest rates. 
• Fixed-rate savings accounts lock your money away for a set period, usually from one to five years. They tend to offer a higher interest rate in exchange for less flexibility. 

Each option suits different financial scenarios. Consider your business cash flow, savings goals, and access needs before deciding. Features and availability may vary depending on the provider and account type. 

Want to learn more on which type of account could suit your business? Read our article on: How to choose between notice periods and instant access for business savings.

Key factors to consider when choosing your business savings account 

Interest rates matter, but they are not everything. Look at account fees, minimum deposits, how often interest is paid, and whether you will have easy access to your funds. 

Also think about tax benefits. Some accounts, such as business cash ISAs, may offer tax-free interest (subject to eligibility and applicable thresholds), which can help your business keep more of what it earns.

Account management matters too. Can you manage your savings online? Is customer support responsive? These practical details can make a real difference. 

Benefits of a dedicated business savings account 

A business savings account offers more than just a place to hold cash, it:

• Separates operational and savings funds clearly 
• Helps you hit specific savings targets or build buffers for future growth
• Earns better interest than standard current accounts 

It also encourages discipline. Setting aside money regularly gives your business a safety net and helps you stay on track toward your goals. 

Avoiding common savings account pitfalls 

Some mistakes can slow down your savings progress. Not checking your rate regularly could mean you miss out on better savings rates. Combining business and personal savings can lead to unclear recordkeeping and tax complications. 

And watch out for withdrawal penalties or account restrictions. Always read the terms before opening an account, especially if you think you might need early access or might face account closure. 

Practical steps to open your business savings account 

Opening a business savings account is usually straightforward: 

• Choose a regulated bank or building society authorised by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) 
• Gather your documents, including business registration, proof of address, and ID for owners or directors 
• Apply online or in person. Many providers now offer fast digital account setup 

With a little preparation, you can start saving quickly. 

Maximising your business savings potential 

To get the most from your savings: 

• Compare savings interest rates often 
• Align your savings plan with business goals 
• Consider mixing account types for both access and higher returns 

This helps ensure your money is always working for your business. 

Ensuring your savings are safe and secure 

Pick a provider covered by the UK's deposit guarantee scheme - the Financial Services Compensation Scheme (FSCS). FSCS protection applies to eligible deposits up to £85,000 per business, per authorised institution. Not all providers are covered, so it’s important to check. 

Always confirm that your chosen bank or building society is regulated by the FCA and PRA. These checks help ensure your money is safeguarded to the highest standards. For more details and to check your chosen bank is covered, visit fscs.org.uk. 

Strengthening your overall financial stability 

Savings are just one part of a strong financial plan. Keep debt at manageable levels, maintain insurance that fits your risks, and update your financial forecasts regularly. 

Budgeting and planning ahead helps you weather financial shocks. It also positions your business to take opportunities when they come. 

Choosing the right banking partner for your business

Your bank should be more than just a place to store money. Look for transparency, customer support, and clear communication. Choose a provider that understands small and medium businesses. 

The right partner will support you with more than just savings. They will offer tools and guidance tailored to your industry and growth plans. 

Developing effective financial continuity plans

Financial continuity planning isn’t just for large corporations. Every business, no matter its size, can benefit from thinking ahead. When unexpected events hit   whether it's a supply chain issue, a delayed payment, or a dip in demand, having a plan gives you space to respond instead of react. 

Here are three practical steps to strengthen your business resilience: 

• Run regular financial planning scenarios: Look at your cash flow and stress-test it against different situations. What if a major invoice is delayed by 30 days? What if sales dip by 10 percent? Having a plan for common risks makes decision-making easier under pressure. 
• Set up a contingency fund or credit line: A dedicated savings pot or pre-agreed credit facility can give you the breathing room you need to manage disruption. Even a small buffer can help cover short-term gaps in cash flow without derailing your operations. 
• Work with an advisor who knows your sector: Having a trusted financial advisor or accountant can make all the difference. They can help you prepare for challenges specific to your industry and provide guidance when markets shift. 

You don’t need a complicated strategy to stay prepared. A few small steps today can help you act quickly and confidently when it matters most. If you’re reviewing your plans, Allica’s team is here to support you with tools, insight, and experience built for business. 

Additional savings considerations 

Looking beyond your business, you may want to explore joint savings accounts or children’s savings accounts. These can support your family’s future goals. 

You might also consider an investment account or stocks and shares ISA for long-term growth. These accounts can offer tax-efficient investing opportunities, depending on your personal circumstances and the current tax year. 

Explore the personal savings allowance, which lets most UK residents receive tax-free interest on their savings. The exact amount you can earn without paying tax depends on your tax band. 

Please note this article is for general information only and is not financial advice. For tailored guidance, speak to a qualified financial advisor. 

Final thoughts 

Opening the right business savings account isn’t just a smart financial move. It’s a signal that your business is thinking ahead. Whether you're building a buffer, planning for future investment, or simply making your money work harder, the right account can help bring structure and clarity to your finances. 

At Allica, we’re here to help you make confident choices. Our Savings Pot is an exclusive feature of our Business Rewards Account, designed to help you separate your savings, track progress, and build for the future with peace of mind. It’s simple, flexible, and FSCS protected. 

Strong businesses don’t just plan for tomorrow. They start preparing today. 

Smart cash management starts with the right account 

Allica’s instant access linked Savings Pot offers up to 4.33% AER (variable)* and no account opening fees, making it simple to put your surplus cash to work. It also offers 1.5% cashback** on eligible business spend helping businesses earn more.

Plus, a dedicated relationship manager is here to support you with personalised guidance every step of the way. 

Start saving with structure. Open your Savings Pot today. 

*Rate includes standard rate of 3.33% AER (minimum balance applies) plus a 0.5% boost each month if you make 15 bank transfers out of the account in the previous month, and a 0.5% boost for six months if you complete a switch with CASS. Rates correct as of 9th May 2025. ‘AER’ stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. Subject to eligibility – see Savings Pot Key Product Information for more details.

** Cashback is variable based on eligibility and spend. See a full list of limits and fees here.

Links were live and information was correct at the time of writing the article.

Disclaimer: This is information – not financial advice or recommendation

The content and materials featured in this article are for your information and education only, and are not intended to take into consideration any particular recipients’ financial situation. The product details and interest rates referred to are correct at the time of writing.

The information does not constitute financial advice or recommendation and should not be considered as such. Allica Bank will not accept any liability for any loss, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.