Business Deposit Accounts: 12 Month Notice
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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:
12 Month Notice Business Deposit Accounts
There are a number of reasons why a business might have capital to put to one side. Whilst business owners might not know when they will need to access this money, most do know that leaving it in their business current account will guarantee them a poor rate of interest.
With business current accounts being such an unattractive option, business owners should look to alternative types of savings account, to try and maximise the interest rate available.
For businesses who are prepared to tie up their savings for a year, then one such option is a 12 Month Notice business account, which will usually give a better return than business current accounts or other accounts which require a shorter notice period.
As the name would suggest, the 12 Month Notice businesses account needs a notice period of 12 months to access any of the funds in the account. In most cases accounts holders can access funds during the notice period, but they will be penalised by the bank or building society, in the form of lost interest.