In 2024 United Trust Bank commissioned research looking at the amount of interest UK SMEs were potentially missing out on by leaving their surplus cash in zero or low interest paying deposit accounts. The result was astonishing. Savings expert Andrew Hagger estimated the figure to be just under £2.3bn a year. At the time it would have been enough for businesses to collectively employ an extra 58,000 staff.
Running a business means juggling priorities every day — customers, staff, suppliers, tax, growth plans. It’s no surprise that surplus cash sitting in your current account isn’t always top of the list, and you’d have to carry a very large balance for the extra interest to pay for more people, but the research made a great point. Leaving excess funds to dwell in low- or zero-interest accounts could be quietly costing your business hundreds and possibly thousands of pounds a year.
Cash sitting idle is money that could otherwise be helping you invest in new equipment, upgrade technology, strengthen working capital, or simply provide a bigger buffer against unexpected costs. Even relatively modest balances can generate a meaningful extra income if placed in a competitive savings account — yet many current accounts still pay little or no interest at all.
One of the most common misconceptions is that improving returns on surplus cash requires changing your business bank or disrupting day-to-day banking. In reality, that isn’t the case. Many businesses keep their main current account exactly where it is and open one or more separate business savings accounts with specialist providers offering more competitive rates. It’s a straightforward way to improve revenue without attracting more customers or affecting how the business operates.
A sensible approach is to segment your cash. Funds needed for payroll, tax or regular outgoings can stay readily accessible, either in your current account or, better, in an Easy Access account which can be drawn upon when you need it but can still earn a meaningful rate of interest. For example, UTB’s Business Easy Access Tracker account* is currently offering 3.80% Gross / AER** which includes 0.8% bonus for the first 12 months of opening.
Money not required for a defined period can be placed into notice or fixed-term accounts. These typically pay higher rates and, when aligned with your cash-flow forecasts, don’t compromise flexibility. The key is matching access to need — not leaving everything in one place by default.
With interest rates remaining above historic lows, the opportunity cost of doing nothing can be significant. Even though the original research was completed over a year ago, the underlying issue it highlighted hasn’t gone away. Many high-street banks continue to lag behind more agile providers when it comes to rewarding business savers.
In a challenging trading environment, every income stream matters. Reviewing where your surplus cash sits is one of the simplest financial health checks you can carry out — and one that can deliver immediate, low-risk returns. Making your money work harder doesn’t require radical change, just a willingness to question whether your business cash is really in the right place.
Although this article may contain helpful information and tips, this is not personal advice. You may wish to seek advice from a financial advisor if you are unsure what’s best for your own personal circumstances.
*On the Business Easy Access Tracker account, during the first 12 months a fixed introductory bonus rate of 0.80% will be applied to give a rate of 3.80%. Once the 12 months have concluded no bonus rate will be applied, reducing the rate to 3.00%. The interest rate is variable and tracks at the Bank of England Base Rate (BoE) minus 0.75% for the duration of the account. The Bank of England Base Rate is currently 3.75%.
**AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year. Gross is the interest rate without the deduction of income tax. Interest is paid gross into your account.