Business deposit accounts: Instant Access
Applicable compensation scheme
The accounts featured in the above table are covered by a number of different compensation schemes.
For banks and building societies who are members of the Financial Services Compensation Scheme (FSCS) you should check whether your business meets the qualifying criteria. The following information is taken from the FSCS website:
FSCS was set up mainly to assist private individuals, although some smaller businesses are also covered. Larger businesses are generally excluded, although there are some exceptions to this (for example for claims in respect of certain compulsory insurances). Our rules tell us which claims are eligible and form part of the FSA’s Handbook of rules and guidance, under Redress, Compensation.
As an indicative guide only, for the purposes of deposit and investment claims, smaller companies are protected. A smaller company must meet two of the following criteria (as set out in section 247 of the Companies Act 1985 or section 382 of the Companies Act 2006 as applicable):
- Turnover: not more than £6.5 million
- Balance sheet total: not more than £3.26 million
- Total number of employees: not more than 50
The same levels of compensation apply whether the claimant is a private individual, small business, or a small company.
More information about the various compensation schemes can be found by clicking on the links below:
Instant Access Business Deposit Accounts
Most business current accounts pay little, if any interest. Moving money, which isn’t needed on a day to day basis, to a business Instant Access account, could help to improve the return on any spare capital your business holds.
Most Instant Access accounts for business, link to your business’s current account, meaning that electronic transfers of money can be made as and when you need to use your capital.
As with personal savings accounts Instant Access business accounts will pay a lower rate of interest than if you were to tie up your capital in a Notice or Fixed Rate account, however for many, the fact that immediate access to savings can be gained is important.
Instant Access accounts often have a bonus, or introductory, rate of interest, which can mean that initially the interest rate looks attractive. However, when the bonus or introductory rate is removed after a set period of time the rate can be uncompetitive, which means business owners should shop around periodically for the best rates of interest.