Sunday, April 02, 2023

Banking

Basics of Business Savings Accounts

business savings account

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Did you know that there is a savings account for businesses as well? Read on to learn more about the financial product and how it can help you and your business.

A savings account is easy to manage, offers decent returns, and is the perfect financial product to help grow your passive income. What’s more, it offers maximum liquidity and quick accessibility to finance when the need arises.

Let’s shed some light on the features of these types of accounts and why they should be an integral part of your business financial plan.

Key Features:

  • The account can be opened in GBP (British Pound)
  • It usually does not require maintenance of a minimum balance
  • Interest is calculated daily and compounded monthly
  • Interest is paid on the last working day of the month
  • Maximum savings in the account cannot exceed GBP 5 million
  • The account can be operated through the bank’s branch, by mail, or by the net banking facility provided
  • There is no notice period or penalty on withdrawals/deposits
  • The account can be terminated at any time without any charges.

Some Important Benefits:

There are multiple benefits of opening a savings account for business banking. Listed below are a few important reasons to opt for it.

Overcome Unforeseen Emergencies:

Sudden and unforeseen costs are inevitable in businesses. A savings account protects the business by offering a financial cushion to deal with difficult times or out-of-the-blue expenses.

Major Purchases/Expansion Opportunities:

The money parked in a savings account can be used to tide over a seasonal lull or purchase equipment without resorting to borrowing from outside financers and incurring interest. Not to mention, access to cash provides the flexibility to consider expansion opportunities when viable prospects emerge in the future.

Tax Payments:

With a complete focus on running day-to-day business operations, it’s easy to forget to set aside money for vital tax payments. A savings account helps in tackling the issue without denting the business’s cash reserves when the income tax season rolls in.

Accrued Interest:

Last but not least, stashing surplus income into a savings account can help your money work for you. Even though the interest rate is generally low, the gains accrued are a great way to generate wealth over time.

How to apply for Savings Account for Business Banking?

There are several ways to apply. You can open an online business savings account by downloading the application via the bank’s official website. Another option is to email the bank. You can also visit the branch in person and enlist the help of a staff member to walk you through the application process.

No matter what application route is taken for opening the savings account, it’s mandatory to furnish all the relevant information requested by the bank along with a list of valid identity and address verification documents.

The Bottom Line

A business savings account is a critical component of financial planning for entrepreneurs. It can help them run a successful and profitable business. The key is to look for a bank that offers a low-fee, high-yield savings account alongside stellar customer service.

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