Business saving account?

[cheeky_chops]

With interest rates on the rise (and having some spare cash) it seems worth opening a business savings acccount.

Our business bank HSBC offer 1.8% while Wise offers 4.54% variable so seems a good deal - https://wise.com/gb/business/interest (they also offer decent exchange rates and we buy some bits in USD so wouldnt need Revolut)

The only prob i see is no £85k protection as interest paying cash is in govt backed bonds. Any thoughts or alternatives?

[egomeister]

Wise is not a savings account, its a low risk investment.

I think Aldermore have about 3% on business savings at the moment.

[Tebbers]

We switched to Wise recently. The fact it isn’t a bank doesn’t really concern me - all client assets are segregated and the bonds are all held through BlackRock, so if you’ve got the UK gov or BlackRock going under then that’s the least of your worries.

[cheeky_chops]

thanks both - good points - i suppose if you have £200k (i dont!) the bank would be protected to £85k and the rest would be history anyway

[trickywoo]

There seems to be a fee of 0.29%.

You can get low 3% instant access genuine bank deposit interest from a range of banks.

You are therefore around 1% premium for taking some risk.

[trickywoo]

Tebbers said:

We switched to Wise recently. The fact it isn’t a bank doesn’t really concern me - all client assets are segregated and the bonds are all held through BlackRock, so if you’ve got the UK gov or BlackRock going under then that’s the least of your worries.

The realistic risk is that you get less than the headline interest figure. In theory the value of your investment can also go down, unlike a straight bank deposit. The whole lot going isn’t the issue it’s taking some risk for what amounts to around a 1% premium on a standard bank deposit.

[22s]

We use Allica Bank (FSCS protected) purely for the savings account for some extra cash we have kicking around. Easy to set up, good customer service, 3% instant access saver.

https://www.allica.bank/

[JZZ30]

3.5% at Allica

[trickywoo]

JZZ30 said:

3.5% at Allica

The “join our waiting list” tag puts me off.

Reasonable or not?

[egomeister]

Allica only seem to offer a 24 month fix at the moment?

[JZZ30]

trickywoo said:

The “join our waiting list” tag puts me off.

Reasonable or not?

Sorry, I know nothing about the waiting list, I've been banking with them from last year.

[Drl22]

Another option my accountant came up with is to take it all out with a directors loan, put it in something like Raisin, get all the protection and higher interest rates than you can get for business accounts, repay the directors loan after 9 months and repeat. Bit more hassle but it works.

[md_ph]

Drl22 said:

Another option my accountant came up with is to take it all out with a directors loan, put it in something like Raisin, get all the protection and higher interest rates than you can get for business accounts, repay the directors loan after 9 months and repeat. Bit more hassle but it works.

I asked my accountant about this and he stated I would have to declare it on my p11d and also pay 40% tax on the income personally, meaning it negates the increased savings rates.

[Drl22]

md_ph said:

Drl22 said:

Another option my accountant came up with is to take it all out with a directors loan, put it in something like Raisin, get all the protection and higher interest rates than you can get for business accounts, repay the directors loan after 9 months and repeat. Bit more hassle but it works.

I asked my accountant about this and he stated I would have to declare it on my p11d and also pay 40% tax on the income personally, meaning it negates the increased savings rates.

Yeah that’s incorrect. It’s a directors loan and as long as you repay it within 9 months of talking it then you have taken no income and the money is back in the business so there is no tax liability.

Edit to say you may mean you pay tax on the interest. Well you are going to pay this anyway but you’ll also then be paying corp tax on it at 25% as well.

[md_ph]

Drl22 said:

Yeah that’s incorrect. It’s a directors loan and as long as you repay it within 9 months of talking it then you have taken no income and the money is back in the business so there is no tax liability.

Edit to say you may mean you pay tax on the interest. Well you are going to pay this anyway but you’ll also then be paying corp tax on it at 25% as well.

Thank you! I’m going to push back on it with him in this case.

One thing he got me to do was pay the corp tax bill early as HMRC are paying ~4% on money on deposit 🤣

[Drl22]

md_ph said:

Drl22 said:

Yeah that’s incorrect. It’s a directors loan and as long as you repay it within 9 months of talking it then you have taken no income and the money is back in the business so there is no tax liability.

Edit to say you may mean you pay tax on the interest. Well you are going to pay this anyway but you’ll also then be paying corp tax on it at 25% as well.

Thank you! I’m going to push back on it with him in this case.

One thing he got me to do was pay the corp tax bill early as HMRC are paying ~4% on money on deposit ??

100% I’d speak to him again. Yeah I’d never pay my taxes earlier than I need haha

[22]

md_ph said:

Drl22 said:

Another option my accountant came up with is to take it all out with a directors loan, put it in something like Raisin, get all the protection and higher interest rates than you can get for business accounts, repay the directors loan after 9 months and repeat. Bit more hassle but it works.

I asked my accountant about this and he stated I would have to declare it on my p11d and also pay 40% tax on the income personally, meaning it negates the increased savings rates.

There are specific rules on 'bed and breakfasting' (rinse and repeating a director's loan). Easy enough to work around, but worth being aware of.

[Regy53]

Joined Allica this week myself 3.5% setup really easy.

Also have oxbury too, its slightly less but stuck 85k in it as a safe bet.

What annoys me is Lloyds offering diddly nothing we have huge excess cash in business at present but Lloyds makes me feel safe to hold more than 85k in there, allica I wasn’t so sure

[Deesee]

Regy53 said:

What annoys me is Lloyds offering diddly nothing we have huge excess cash in business at present but Lloyds makes me feel safe to hold more than 85k in there, allica I wasn’t so sure

Page 6..

https://www.lloydsbankcommercial.com/uploadedFiles...

More info on Arena, up to 1mill / 1 day to 12 months instantly priced, above beyond that they have dealers who will place for you.

https://www.lloydsbankcommercial.com/TradeExecutio...

[lizardbrain]

HSBC offer 1.8 on business savings and seems to be just enough to stop me doing something about it