Business Easy Access Accounts
Business Fixed Rate Bonds
Business Notice Accounts
Understanding and using business savings accounts to boost company profits
Among the many ways to boost your company’s finances is a rather simple one – open a business savings account. By placing additional money into a separate account, your firm can earn interest on the cash without you having to do anything.
Sound good? Here is some information to help you understand a bit more about increasing your revenue through business savings accounts.
Why open a business savings account?
By keeping your company’s money in a current account, you will probably earn next to no interest on it, meaning you simply lose out on an opportunity to boost your profits. It is tempting to think that since the money is not in the account for long, as you are paying bills and wages soon after the money arrives it is not worth bothering about putting it into another account. But the reality is very different.
If you are putting money aside for more equipment, to pay a tax bill, to raise a deposit for a larger building, pay for a staff outing or simply as a reserve, savings accounts pay you competitive rates of interest.
The different business accounts available
Easy access – Just like personal savings accounts, there are easy access savings accounts for business. These enable you to take out and put in money whenever you want to, and the required minimum balance is normally quite low, allowing you to deposit cash no matter how little the amount is. However, the drawback to these benefits is that the interest rates are not typically very high.
Notice accounts – To gain more interest on the company’s money, it is worth looking for business savings accounts that have more restrictions. If your company does not need instant access to the cash and you could cope with simply giving a notice of between 30 and 120 days – depending on the account – to withdraw the money, you could benefit from far higher rates.
Fixed-term bonds – If you are in a position to lock away some of the company’s finances for between one and three years, you can take advantage of much more preferential rates. The rate stays the same during this period, so you do not have to worry about interest rates dropping, but you cannot access the money until the term is up without paying a penalty.
By using specific business savings accounts, companies can take advantage of many other benefits, such as business support and guidance, superior travel, and higher interest rates.
Is the money protected?
The Financial Services Compensation Scheme is the statutory safety net which underwrites the first £85,000 a consumer or small business has under a single UK banking licence, but different rules apply for larger businesses.
However, it is worth noting this will reduce to £75,000 from January 1st 2016, and some banks share a licence. Therefore, to make the most of the protection, it is wise to split the money between banks and building societies. To make this easier, The Business Powerhouse is working with Savings Champion to offer a Business Concierge service for savings, which means your money is managed to maximise your return and grow your profits, allowing you to get on with what you do best – running your business.
Check out the business concierge service by calling 0800 321 3581.