Company savings and investments
Although the Bank of England base rate has been steadily increasing since December 2021, many business current accounts continue to pay very low levels of interest.
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Moving surplus funds into a specialist business savings account with an alternative bank (without the need to transfer your current account) may give your business significantly more interest on your cash deposits.
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If your company has retained profits that are unlikely to be required for many years, placing the funds into carefully considered investments can be a good long-term decision.
"Get in touch with Askaig Newington to speak to our financial planning team.
Our experienced professionals have a wealth of knowledge and a shared commitment to providing the best possible service to our clients.
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Whether you're looking to secure your retirement, grow your wealth, or navigate a complex financial situation, we're here to provide personalised advice."
Why might I consider a business savings account?
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All businesses require a certain amount of readily available cash to cover their regular expenditure and provide a buffer for unexpected costs. These funds should always be held in the company's current account.
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Some companies may have more cash in their current account than is required to cover cashflow, and they might consider placing some of these surplus funds into a business savings account.
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A business savings will usually have a higher interest rate than a standard business current account, which means that your business will earn more interest on these surplus funds.
What type of business savings accounts are available?
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Like personal savings accounts, business savings accounts are available as easy access, notice, or for a fixed term. It's really important to consider how likely you are to need access to your business savings, and how quickly you might need to make a withdrawal.
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If you have strong cashflow then you may wish to consider placing funds into a fixed rate savings account. This is likely to pay you a higher rate of interest, but you will not be allowed access to the funds until the fixed period has ended.
Fixed term accounts usually start with a one year fixed period, going all the way up to five years. Shorter fixed term accounts of six or nine months may also be available.
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If you think you may require more frequent access to your funds, then an easy access account is likely to be more suitable.​
Book a meeting with a financial planner
Our initial meeting comes at no cost – it’s an opportunity for us to get to know each other and allows us to gain an insight into your current situation, goals, and objectives.
Our friendly financial planning team bring a wealth of experience and expertise. All our discussions are confidential, and you will never be asked to commit or sign up during our first meeting.
How to get in touch
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Barnet
EN5 4SZ
Could I consider investing surplus funds?
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Cash savings accounts are a safe and stable way to hold your company funds, providing a known amount of interest on your account balance.
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Investing refers to placing your company's funds into an asset in the hope that the investment will grow in value over time, at a better rate than the level of interest that would be paid on a savings account.
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Common types of investments include shares, bonds and property.
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Investing carries more risk than saving, and the amount that you get back could be less than the amount you initially invested. While investing company funds is unlikely to be suitable for most small businesses, there are circumstances in which it may be a suitable approach.
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Speak to one of our financial planners to understand whether a company investment might be right for you and your business.
All information It is based upon our current understanding of current legislation and HMRC guidance. While we believe this interpretation to be correct, it cannot be guaranteed that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Thresholds, percentage rates and tax legislation may change in Finance Acts and bases of, and reliefs from, taxation are subject to change and their value depends on an individual’s personal circumstances.
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Investments carry risk. The value of your investments (and income from them) can go down as well as up, and you may get back less than you invested. Past performance is not a reliable indicator of future results. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.