Business account with interest rate

HappyUser

Hello


My company's income sits in my business bank account for a quarter until I can take it as personal income.


This results in money lost as it doesn't have any interest rate.


Is there any solution?

Terry_Towelling

I presume there is a reason why it just sits there before you can take any. Your accountant should be able to help you.

A short-to-medium term workaround might be to get yourself a 0% on purchases credit card with as long a promotional period as possible. You can then spend on that whilst waiting for the company cash to be released to you. You'd still have to manage the monthly minimum payments but it is a way of effectively getting a credit card provider to pay you upfront with no added costs.

When the quarterly cash is accessible, you don't have to pay it all off the credit card either. Simply save it in an interest-bearing account and use it to manage the minimum payments on the 0% card until the promotional period ends.

OK, it isn't a perfect solution and it doesn't actually create interest for you straight away but it might help. Obviously, it's use as a tool is subject to getting a reasonable credit limit and a long 0% period.

jonesMUFCforever

Could you not open a Business savings account - the rate would not be great but better than nothing?

planteria

why do you have to wait for a quarterly payment?
could you not take money on a monthly basis?
interest rates are low, especially for business accounts.
some people take a loan from their companies and save business cash in a personal account.

20SmthngSver

The only Business Current Accounts which are free are Metro Bank (first 50 transactions a month, then 50p per transaction thereafter) and Starling Bank (App based/Online based only).

Every other bank will charge you varying amounts and rip you off. Some don't even let you use their counters for the privilege of a monthly free or transactions fees for every transaction. Santander is about the best. Steer clear of HSBC, Lloyds and Barclays, their payment plans are awful.

Penelopa.Pitstop

My business account pays whole 0.1% and only from £100K upwards ... and account is free. I would not count on a lot more. I pay corporation tax early to get interest from HMRC, which is higher than that on my account.

HappyUser

Isn't taking money out of the business account monthly considered as income while taking every quarter is dividends?

Terry_Towelling

HappyUser wrote: »

Isn't taking money out of the business account monthly considered as income while taking every quarter is dividends?

I don't run a business so I don't know but your accountant (or HMRC website) should be able to tell you.

If taking money out quarterly is a way of avoiding income tax (or of paying less tax overall) then, presumably, that more than makes up for a little loss of interest.

18cc

No they are not the same

a dividend is something your company declares and then has to pay to all shareholders it is a formal thing

just moving money out of your current account and put it somewhere where it pays interest and then moving it back again is not

you can do that as much as you want

if you move it from the company name to an account in your name to get interest then you can just call it a loan at 0% as long as you pay it back

20SmthngSver

Better to look at business bonds, like Hampshire Trust Bank (fixed term), or Saffron Building Society (easy access).

Marcon

HappyUser wrote: »

Isn't taking money out of the business account monthly considered as income while taking every quarter is dividends?

I think you'll find that helping yourself to company money is generally considered as theft. You need to pay yourself a dividend or a salary (assuming the company has been registered for PAYE).

Loans to directors are tightly regulated, so you can't just put your paw in the till as someone else has suggested.