Top Small Biz Savings Accounts

I've been looking for an instant-access account that pays better than my bank's terrible deposit account rate. The best I've found is with Northern Rock - their Business Reserve account* (the only business account they still offer, I think), which is currently paying 1.25% AER and is operated by post. It's open to sole traders and limited companies. It offers unlimited, no-notice withdrawals, with the only caveat being that they have to be for over £1000. You need to deposit at least £10,000 to open one.

I'm in the process of opening one now, and it's going very smoothly so far.

*Can't post a link because I'm too new a user, but you can easily find it with Google - just search for "northern rock business reserve".

I'm unsure if the FSCS covers £50k deposits in savings/deposits of certified institutions for companies with a turnover of more than £1m. The advice seems contradictory from MSE and FSCS. What am I missing here?


MSE SAYS:
Savings Safety
The protection your limited company’s savings are due depends on your firm’s turnover.
• Annual turnover under £1,000,000.
• If you have a company with turnover under a million pounds, money in UK registered banks – all the above are - has the same £50,000 per person (company) protection as private individuals (see the Savings Safety guide). So if you’re saving more than that, for ultimate safety you need to spread it over different accounts.
• Annual turnover over £1,000,000
• Here you have no guarantee at all, so it's a question of considering or even taking advice on mitigating risk. The spreading your savings philosophy is quite a good one here too though, as it does mean the risk of losing all your cash is diminished.


FSCS WEBSITE 25/05/10 SAYS:
Is a business covered if the bank or building society it holds money with fails?
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
For claims made under an insurance contract, small businesses are protected. A small business under the COMP rules is one that has an annual turnover of less than £1m.
The same levels of compensation apply whether the claimant is a private individual, small business, or a small company.