Best Online Savings Accounts for Small Businesses in the UK (2025 Update)

As the UK moves forward to a cashless economy, traditional banking is rapidly being replaced by digital-first solutions. According to The Times UK, online business savings accounts in the UK comprise over 220 distinct digital account options, offered by at least 66 participating banks and providers.

Here’s why small businesses in London and the UK are loving digital banks and online-only savings accounts in 2025:

Competitive interest rates
User-friendly mobile apps
Instant notifications
Low to no fees
FSCS protection, just like traditional banks

In today’s blog, we’ll be discussing the best options to open a savings account for your small business in the UK. Keep reading.

What Is an Online Savings Account for Small Businesses?

An online savings account for small businesses is a digital-first bank account which is designed to help business owners store surplus cash securely while earning interest (without needing to visit a physical branch).

These accounts are typically offered by online banks, neobanks, or digital branches of high street banks and are managed entirely through websites or mobile apps.

Unlike current (checking) accounts, savings accounts focus on growth, not transactions. That’s what makes them ideal for holding:

Emergency reserves
Tax money (e.g., VAT, Corporation Tax)
Short-term savings goals (e.g., new equipment or office rent)
Idle funds waiting to be reinvested

When it comes to a traditional business savings account vs an online business savings account, guess our winner:

Online savings account offers better AERs (Annual Equivalent Rates) for your small business than traditional banks because of lower overhead costs.
It gives you 24/7 access to your funds, anytime, anywhere, with real-time balance updates and instant transfers.
Most legitimate online savings accounts in the UK are protected by the Financial Services Compensation Scheme (FSCS), covering up to £85,000 per eligible business, per banking license.

List of 5 Best Online Savings Accounts for Small Businesses in The UK

According to Statista, the average profit made by SMEs in the UK was around 13000. So, if you want to keep your profit in a profitable online savings account, you can consider the following options:

Business Savings Account Options Online At A Glance
Bank Name	Interest Rate	Min-Max Deposit	Monthly Fee
Tide	4.22%	£1.00 – unlimited	£0 for Instant Saver account
Axos Bank	3.80%	$2,500 to waive the $5 monthly fee	$0 (Premium); $5 waiverable (Standard)
Hampshire Trust	4.15%	£5,000.00 – £750,000.00	No monthly fee
EverBank	0.50%	$1,500 to open	No monthly maintenance fee
Allica Bank	4.15%	£20,000.00 – £2M	No monthly fee

1. Tide

Tide is a UK-based fintech challenger bank offering business current and savings accounts. Designed for startups, freelancers, and small businesses, it provides an easy way to manage finances from your phone.

Key Features of Tide

Instant Saver account via ClearBank
App-based money management
Daily interest credited monthly
FSCS protection up to £85,000
Linked to Tide Business Current Account

Tide Interest Rate

Up to 4.22% AER

Pros & Cons of Tide

Pros	Cons
Low deposit requirement (£1)	No separate dedicated savings account (linked to the main account)
Fully digital & mobile-friendly	The introductory interest rate drops after 6 months
UK-regulated
No monthly fees

2. Axos Bank

Axos Bank is a US-based online-only bank with business savings and checking options. Though not UK-based, it’s popular with global SMEs earning in USD.

Key Features of Axos Bank

Premium & standard business savings options
QuickBooks integration
FDIC insured (U.S. businesses)
Online banking with unlimited transactions

Interest Rate

Starts from 3.80%

Pros & Cons of Axos Bank

Pros	Cons
High APY up to 3.80%	U.S.-only (no UK FSCS protection)
No monthly fee for Premium	$2,500 required to waive the Standard account fee
Strong accounting software support

3. Hampshire Trust

Hampshire Trust Bank is a specialist UK savings and commercial lender offering fixed and notice business savings accounts with competitive returns.

Key Features of Hampshire Trust

Fixed, notice & easy-access savings options
FSCS protection (UK)
Online portal for savings management
Business-specific interest accounts

Hampshire Trust Interest Rate

4.15%

Pros & Cons of Hampshire Trust

Pros	Cons
Competitive fixed AERs (up to 4.55%)	Minimum deposit from £5,000
Trusted UK provider	No mobile app
Flexible maturity terms

4. EverBank

EverBank (formerly TIAA Bank) is a US-based digital-first bank offering high-yield personal and business savings accounts with zero maintenance fees.

Key Features of EverBank

Performance Savings account
FDIC insured
Online and mobile access
No monthly maintenance fee
Daily compounding interest

EverBank Interest Rate

0.50%

Pros & Cons of EverBank

Pros	Cons
High APY (4.30%)	No UK-specific tax tools or FSCS cover
$0 monthly fees	Currency exchange cost for UK users
No minimum to earn the advertised rate

5. Allica Bank

Allica is a UK challenger bank catering specifically to SMEs, offering high-interest business savings pots, current accounts, and relationship-led banking.

Key Features of Allica

Savings pot within Rewards Business Account
Up to 4.33% AER
1.5% cashback on card spend
FSCS protection
Dedicated relationship managers

Allica Interest Rate

4.15%

Pros & Cons of Allica

Pros	Cons
Strong AER with instant access	Requires £50,000+ to access full features
Rewards program for businesses	Still scaling — fewer app features than older banks
Excellent UK support and compliance

What Bookkeeping Tasks Do Small Businesses Need to Do?

Whether you’re a sole trader, freelancer, or a growing limited company, keeping accurate and up-to-date bookkeeping records is not just smart—it’s legally required in the UK. Here’s a breakdown of the key tasks small businesses need to manage:

1. Create and Manage Invoices

Sending timely and professional invoices is essential to ensure consistent cash flow. You need to:

Generate and send invoices to clients/customers
Include all legal details: VAT number (if applicable), payment terms, invoice number, etc.
Monitor unpaid invoices and follow up

Tip: Using accounting software like QuickBooks, Xero, or FreeAgent automates invoicing and reminders.

2. Record All Income and Expenses

All money coming in and going out must be properly logged. This includes:

Sales revenue
Business expenses (rent, subscriptions, travel, etc.)
Cash transactions and digital payments
Keeping digital records helps in easy classification and future tax return filing.

3. Categorise Transactions

Each transaction must be classified correctly to generate accurate financial reports and tax filings. Categories can include:

Utilities
Marketing
Office supplies
Staff wages
Loan repayments

Misclassified transactions can lead to incorrect tax calculations or missed deductions.

4. Reconcile Bank Statements

Bank reconciliation means matching your recorded transactions with actual bank entries. This helps to:

Identify missing or duplicate transactions
Catch bank errors
Maintain accurate financial records
Most accounting software allows automatic bank feeds to make this task faster.

5. Track VAT and Prepare for MTD Submissions

If your business is VAT registered:

You must track VAT on sales and purchases
Submit VAT returns quarterly under Making Tax Digital (MTD)
Ensure your software is MTD-compliant and connected to HMRC
Mistakes in VAT tracking can result in penalties and audits.

6. Maintain Payroll and Employee Records (If Applicable)

If you employ staff, you’ll need to:

Run payroll and PAYE (Pay As You Earn) correctly
Issue payslips
Report to HMRC monthly or weekly
Track holiday and sick pay

Non-compliance with payroll rules can lead to fines or employee disputes.

7. Keep Documents Organised for HMRC Audits

HMRC requires you to keep records for at least 6 years, including:

Receipts and invoices
Bank statements
Payroll records
VAT returns and correspondence
Good digital filing means faster tax prep and less stress during audits.

Based in East London, we support small businesses and self-employed professionals by:

Providing full bookkeeping services
Managing VAT and MTD submissions
Running payroll accurately and on time
Offering training and software setup (QuickBooks, Xero, FreeAgent)

Why Choose Taj Accountants for Bookkeeping?

When it comes to bookkeeping, we know what really matters to small business owners in the UK. Which is, clarity, reliability, and a team you can actually talk to.

That’s exactly what you get with Taj Accountants. For over ten years, we’ve worked closely with freelancers, startups, and small businesses across London. We help them stay financially organised and stress-free. We’re not here to just plug in numbers. We take the time to understand how your business works, what systems will suit you best, and how to keep you tax-ready all year round.

We take a digital-first approach, using HMRC-recognised software like QuickBooks, Xero, and FreeAgent, so your records are always up to date and accessible.

You’ll get gentle reminders, real-time insights into your accounts, and support that actually feels supportive. Whether it’s your VAT returns, payroll, self-assessment, or corporation tax, we handle it all in one place. And when it comes to pricing, we keep things simple and honest: affordable monthly plans with no surprise fees or last-minute charges.

We’re not just your traditional bookkeeper. We’re your partner in making business smoother.

Conclusion

Bookkeeping isn’t just about ticking a compliance box — it’s about understanding your numbers, making informed decisions, and setting your business up for long-term success. With organised books, you’ll be better prepared for tax deadlines, reduce financial stress, and uncover opportunities to save money or grow smarter.

At Taj Accountants, we make bookkeeping simple. Whether you’re just getting started, need help streamlining your process, or want to fully outsource your books, we’re here to support you with friendly, expert guidance every step of the way.

Book your free bookkeeping consultation today and let us help you keep your business finances clear, compliant, and in control.

FAQs

How do I do bookkeeping for a small business in the UK?

To do bookkeeping in the UK, you need to record all income and expenses, track invoices, categorise transactions, and reconcile your bank statements regularly. You’ll also need to stay on top of VAT (if registered) and keep digital records for HMRC. Using software like QuickBooks or Xero helps streamline the process.

What software is best for small business bookkeeping?

Popular bookkeeping software in the UK includes QuickBooks, Xero, FreeAgent, and Zoho Books.

Is bookkeeping required for sole traders?

Yes, sole traders in the UK must keep accurate financial records of all business income and expenses. This is essential for filing your Self Assessment tax return and proving allowable expenses. Digital bookkeeping is strongly recommended, especially with MTD expansion.

How much do bookkeeping services cost for small businesses?

Costs vary based on business size, transaction volume, and services required. On average, UK bookkeeping services range from £50 to £250+ per month. At Taj Accountants, we offer transparent and affordable packages tailored to your business needs — with no hidden fees.