Personal savings accounts are a highly effective method of keeping your money working hard. With interest earned every month or year, they keep your money ticking along in the background while you focus on other things, such as tending to your family, planning for the future, or running your own business.
As a business leader, your time is precious and you may not always have time for the life-admin that falls outside of work. But, while your company can benefit from its own business account, remember that your personal funds also need some attention.
During the current economic period when businesses could be hit by the potential impact of US tariffs, now is certainly the right time to make the most considered financial decisions.
For those who haven’t yet considered their own financial needs, we’ll provide a few reasons why a personal savings account can be useful for business owners, along with some account options for you to consider.
There is a difference between a business savings account and a personal one, and the biggest distinction is who can hold the account. Business accounts are, of course, held in the name of the business, whereas a personal account is held by an individual. This could be an employee, a business owner, or a director.
We’ve gone into a bit more detail on the differences between a business vs a personal savings account in our article: Business Savings vs Personal Savings
Below, we’ve highlighted some of the main benefits of separating your business and personal savings as a business owner:
It takes a lot to run a business, which can have an impact on our lives outside of it. This can mean sometimes struggling to find time for your social life, family, or even your own needs for the sake of others.
As well as having aspirations for your business, it’s also important to plan for costs in your personal life – children, holidays, home improvements. When it comes to getting the most from your own personal savings, opening a personal savings account can help you take back control over your own finances without the needs of your business getting in the way, and allow you to save for the future you deserve.
When running a business, it can feel like a lot more is at stake. After all, you’ve got employees, customers, and assets to think about, as well as yourself. On the flip side, there are also considerations in your personal life, such as ill health, bankruptcy, and the cost of living.
Regularly contributing to a personal savings account can help lessen the impact of some of life’s challenges, particularly those that are associated with your finances.
Depending on the account you open, saving as an individual can grant some tax efficiencies. Individual Savings Accounts (ISAs), for example, provide tax-free interest on your savings if you stick to the yearly limitations. It’s also worth knowing that savings in tax-free accounts like ISAs do not count towards your personal allowance.
Businesses aren’t eligible for ISAs, but individuals are. Get the most from your personal savings by looking for the best ISA rates available, and take advantage of tax-free interest on your non-business related funds.
Keeping your personal and business finances mixed together is not a good idea. Not only does this make your accounting duties more challenging, it can also open you up to difficult queries while applying for loans or during financial audits.
Having your own money kept separate from a business makes it easy to draw a firm line between personal and business finances. This reduces mental strain and creates a clearer financial picture of you and your business.
With there being so much choice available in the personal savings space, it can be hard to decipher between the options. Thankfully, we’ve broken down each account type to make it easy for you to tell them apart:
Cash ISAs: a cash ISA operates similarly to a regular savings account, while providing tax-free interest on the funds kept within it. Account holders must abide by the withdrawal and deposit limits.
For more on this, read our guide: What is an ISA? ISA accounts explained
Reward Cash ISAs: a type of cash ISA, it “rewards” account holders for sticking to their withdrawal limits.
Easy access savings: these savings accounts offer prompt access to funds without delay.
Double access savings: similar to a Reward Cash ISA, a Double Access Account provides a higher interest rate as long as you stick to fewer than two withdrawals in a year.
Regular savings: to encourage consistent saving, a regular saver account limits how many deposits can be made. Unused deposits don’t carry over, so frequent saving is key.
Fixed rate savings: by keeping interest rates locked in place for a period, a fixed rate savings account offers predictable returns for a given duration.
Notice savings: a Notice Account requires account holders to provide notice before they can make a withdrawal. This can offer slightly higher interest, at the expense of less availability.
Aldermore offers savings accounts for both business and personal use. These are designed to help you invest in both your professional and personal life while keeping everything separate. Visit our savings page to find out more.