Smart entrepreneurs can potentially gain significant extra interest savings for their small businesses by making savvier banking decisions.
Small businesses in the UK are constantly seeking ways to improve their cash flow and strengthen their financial position. One effective strategy is to make informed decisions about where to hold reserve funds, specifically by choosing easy access business savings accounts with strong, flat interest rates across all balances.
A growing number of providers are offering such accounts, which enable businesses to earn interest on their funds while maintaining flexibility. Traditional banks, including four of the big six, use tiered interest structures, making it essential for SMEs to be aware of this across the sector.
By understanding tiered interest rates, businesses can make more informed decisions about where to save. For instance, the average easy access business savings rate is 2.09%, and a business with £10,000 on deposit could earn £209 per year. However, by switching to a top-paying, non-tiered account, the same business could increase earnings to nearly £400 per year, or £8316 over two years.
Moneybox analysis indicates that small businesses could save up to £190 annually by being more aware of business savings account interest rate structures. Cecilia Mourain, Chief Savings Officer at Moneybox, emphasizes the importance of better savings options for business resilience.
For small businesses with limited working capital, the best options are those offering high annual percentage yields (APY), no or low minimum balances, no or low fees, and simple access features. Three top-recommended accounts include:
- Axos Business Premium Savings Account: This account offers a flat 3.80% APY on all balances with no minimum opening deposit or monthly fees. It allows easy online access but has transaction limits (20 per month) and no ATM/debit card access.
- Bluevine Business Checking: Although a checking account, it offers a savings-like structure with up to 2.0% APY on balances up to $250,000 with no minimum balance or monthly fees and unlimited transactions.
- Peak Bank High-Yield Savings: This account offers a top 4.35% APY with a $100 minimum deposit, no monthly fees, and easy mobile access.
When looking for providers with strong, flat interest rates, consider accounts that advertise a flat APY across all balance tiers, avoiding tiered or capped interest rates that reduce earnings on large balances. Choose online or fintech banks like Axos, Bluevine, or newer banks like Peak Bank that typically offer higher yields and low/no fees compared to traditional banks.
Verify fee structures carefully, including monthly fees, minimum balances, and transaction fees, as excess transactions often incur charges. Consider account features like accessibility (online/mobile), transaction limits, and FDIC insurance coverage especially important for small businesses wanting easy access and capital preservation.
Use comparison resources like NerdWallet, Bankrate, and others focused on small business and high-yield savings updated frequently to spot providers offering competitive, flat APYs.
In conclusion, by carefully choosing easy access business savings accounts with strong, flat interest rates, small businesses can enhance their cash flow and financial stability. The Axos Business Premium Savings Account, Bluevine, and Peak Bank are excellent options to consider, offering high yields, low fees, and easy access.
Businesses looking for improved cash flow and financial stability might consider high-yield business savings accounts, such as the Axos Business Premium Savings Account, Bluevine Business Checking, and Peak Bank High-Yield Savings. These accounts offer strong, flat interest rates and are usually available from online banks or fintech providers; traditional banks often employ tiered interest structures, which small-business owners should be aware of when making decisions about their personal-finance and small-business solutions. By choosing the right account, a business could potentially save up to £190 annually, enhancing both its cash flow and financial position.
