How To Find The Best Savings Rates For Your Business

Whether you need to find the perfect savings account for your start-up's investments, or your online business is reaping rewards and you want to know the best place to save your cash, finding somewhere you can trust with a reasonable return on your savings is tricky these days.

Savings rates are at an all-time low, and many accounts only pay decent rates of interest if you sign up to them long term, locking your money away. This is not ideal, especially if you may need to put extra money into your website at short notice, but if you are comfortable enough to consider a long-term option, it can be a great way of growing your budget for the future.

If you've just secured a sizable level of investment or spike in income, which you don't want to invest in your business all at once, but do want to be able to use when you would like, an easy-access savings deal is probably the best option. Checking accounts against each other on comparison websites is a great way to find a good deal, but beware the hazards of picking the account with the biggest number under the ‘interest rate' section. There are two other things you need to watch out for:

Withdrawal restrictions

Just because something is labelled ‘easy-access', does not necessarily mean you will be able to withdraw as often as you would like. Some savings accounts impose a quote on how many times or how much you can withdraw.

Introductory offers

Some options will offer rates that appear too good to be true. A lot of the time, this can be because they only apply for a limited amount of time, and plunge afterwards. These offers can be taken advantage of if you are willing and able to switch accounts, but make sure to understand what you are signing up to.

Minimum or maximum deposits

It is easy to sign up for an account and think you will have no problem reaching the minimum deposits every month. However, if you need to invest to take your start-up to the next level, or if your revenue stream wains, you may not be able to make the minimum deposit, and you will end up with far lower savings rates.

An option that has become increasingly popular with such low savings rates available is a longer term fixed-rate bond. These require locking your money away for a period of time - from six months to five years - but usually offer much better interest rates. Fixed rate bonds usually require you to make one big investment at the start of the savings period, so are ideal if your business has just received a large investment or return.

If your project or business is doing well enough for you to take money out of it, an ISA may be a better option than a savings scheme. The best ISAs allow you to make much better returns than other options, since any interest paid on them is not taxable, compared with a savings account in which you pay at least 20 per cent on any interest. You can invest up £5,340 into a cash ISA, so, with the best ISAs you can save a significant sum of money in interest tax.