SMEs leaving hundreds on the table as a result of business banking choices
Small businesses could boost their savings by up to £190 a year by being more aware of how interest rates are structured on business savings accounts, according to new analysis by Moneybox. The findings highlight a significant opportunity for small businesses to improve their cash flow by making simple, informed decisions about where to hold their funds.
For businesses with limited working capital, flexibility is essential. Easy access business savings accounts allow small and medium sized enterprises (SMEs) to earn interest on reserve funds while maintaining the freedom to respond to unexpected costs or opportunities.
However, the data shows that 1 in 5 providers of easy access business savings accounts (14 out of 65) only offer their best interest rates on higher deposit levels. One provider, for example, offers five separate interest tiers, with the highest rate only available on balances of £1,000,000. In one case, the threshold for the top rate is £10m.
To put that in context, the median profit of a UK SME in 2024 was just £13,000, according to Statista—highlighting how important it is for small businesses to find savings products that work for their needs, not just those with significant reserves.
With an average easy access business savings rate of just 2.09%, a business with £10,000 on deposit might only earn £209 per year. But by switching to a top-paying, non-tiered account, the same business could increase that to nearly £400 per year, putting an extra £190 into its account annually, or £831 over two years, all without sacrificing access to funds.
Cecilia Mourain, chief savings officer at Moneybox, says better savings options could make a real difference to business resilience: “Businesses benefit from straightforward, dependable methods to optimise their savings, whether that’s building a financial buffer, improving cash flow, or simply earning a fair return on their reserve funds. An easy access account gives them the flexibility they need while still helping them strengthen their financial position.”
“Understanding tiered interest rates can help businesses make more informed decisions about where to save. We encourage businesses, especially those without large sums to lock away, to seek out providers offering strong, flat rates across all balances, so they can get a fair return regardless of their size. Our aim is to simplify savings and help UK SMEs, who are the backbone of the economy, get more from their hard-earned money.”
While tiered rates are more commonly associated with newer or specialist providers, Moneybox analysis shows that four of the big six UK banks also use tiered interest structures, making it something for SMEs to be aware of across the whole sector.
With clear potential to earn more on their hard-earned savings, SMEs, particularly those without large balances to lock away, are encouraged to check the rates on their current savings accounts, understand the thresholds that apply, and consider switching to more transparent, accessible options.