What are cash deposit accounts?
These accounts are similar to a bank account, but focused on improving the interest paid on the cash that is held in a business bank account. There are a broad range of account types to increase yield, whilst managing for access and diversifying risk with cash being held by a number of financial instituions, instead of just one.
How much can i place in a cash deposit account?
Most business owners will have an idea of how much cash they might be prepared to place into a cash deposit account. However we can work with you to provide an analysis of your cash management policies and help determine what would be a suitable amount to deposit.
Can i withdraw my cash whenever i need it?
Most cash deposit accounts will have an agreed amount of time that will be left with the account provider. Most will have instant access accounts where funds can be accessed whenever they’re required, but others will have stricter time constraints around them. These are tyically reffered to as Notice and Fixed Term Accounts.
What is a notice account?
The distinguishing feature of a notice account is that account holders are required to give advance notice before making a withdrawal. This notice period can vary from days, weeks, months and years.
What is a fixed term deposit account?
The key characteristic of a fixed-term deposit is that it has a predetermined maturity date, and the funds are typically deposited for a fixed period, ranging from a few months to several years. Fixed-term deposits generally offer higher interest rates compared to regular savings accounts. The interest rate is agreed upon at the time of opening the deposit and remains fixed for the entire term.
What are the costs?
There aren’y typically any costs involved for the setting up and depositing within cash deposit accounts. However it is important to note that account providers typically have restrictions on early withdrawals. If the account holder needs to withdraw funds before the maturity date, they may incur penalties or receive lower interest.
Are my accounts protected by FSCS?
If your business is a separate legal entity, e.g., a limited company or LLP, it is protected up to £85,000. This is in addition to the £85,000 protection across all individual accounts you hold within the bank/banking group. In this situation, the business is the protected entity, not each individual.
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