In this article, we’re explaining business savings accounts, including the most important nuances and factors you need to consider before choosing where to bank.
This article is part of our series on business banking, including free articles that range from merchant accounts to opening a bank account for ecommerce businesses – click here to get free access now.
Of course, you can also continue reading to learn about savings accounts – use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Business Saving Accounts
- Who Can Open Business Savings Accounts?
- How to Open Saving Accounts for Foreign Business Owners
- Where Can a Foreign Business Open Saving Accounts?
- Frequently Asked Questions
- Ready to Explore Your Options?
Business Savings Accounts
Business savings accounts provide access to a business’ capital while earning a higher interest rate than a checking account. That said, these accounts typically have minimum balance requirements and limits on withdrawals. Therefore you need to consider short-term capital requirements before committing funds to a savings account instead of a checking account.
Importantly, you can open a savings account for your company in all major jurisdictions, including the United Kingdom, United States, Australia, Canada, and elsewhere. However, the account opening requirements in each country vary widely.
For example, opening a business savings account in the United Kingdom is very challenging if you want to open remotely or you have a non-resident business.
On the other hand, if you have a resident company with local UK operations, then opening a savings account can be a relatively straightforward process.
In the following sections, we’ll explore the businesses that are eligible to open a savings account, the requirements to open one, and how to start the process of opening an account for your company today.
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Who Can Open Business Savings Accounts?
All businesses can open a savings account if they meet the account opening requirements set by their chosen bank. In fact, when a business cannot open savings accounts it is usually because they chose the wrong bank or wrong country-based. This is reflected in the opening requirements set by the bank and whether they cater to businesses in the same industry, region, or risk brackets.
With this in mind, here is a list of common legal structures used by business owners that can open business savings accounts.
Business Types That Can Open Saving Accounts
- Limited Company (e.g. UK Ltd.)
- Limited Liability Partnership (e.g. UK LLP)
- Limited Liability Company (e.g. US LLC)
- Corporation (e.g. US Inc.)
- Limited Partnership (e.g. Canada LP)
- General Partnership (e.g. US GP)
- And more
How to Open Savings Accounts as a Foreign Business
To open savings accounts as a foreign business you will need to be much more selective in where you apply for accounts. Otherwise, you could waste a huge amount of time and effort applying for accounts that you cannot realistically open.
The reason that business owners end up wasting time and effort is because they apply to banks that cannot accept them. That’s because banks don’t tell applicants at the outset that their business doesn’t qualify. Instead, they simply let them apply… and then deny their applications.
With this in mind, it’s important for foreign businesses to look for banks that match the following criteria:
- Understand the nuances of onboarding a foreign business
- Regularly open accounts for businesses from your country
- Support transactions to and from your countries of interest
- Onboard business owners with your citizenship and residency
There are many other variables that our team specifically looks at to determine which bank is suitable for every client. But, if you can navigate these four variables, you will be on your way to finding suitable banks.
That said, even after identifying which banks to apply to, you still need to meet the account opening requirements. Not surprisingly, most banks have different account opening requirements for foreign businesses than they do for local businesses. Here’s a look at what some of these requirements include.
Requirements for Opening Saving Accounts as a Foreign Business
The following requirements are commonly requested. However, account opening requirements do vary from bank to bank. So, it’s important to confirm the specific account opening requirements at your desired bank before applying.
- In-person meeting (common but not always required)
- Account opening deposit
- Ongoing account balance
- Corporate documents
- Letter of good standing
- Bank reference letter
- Client contracts or invoices
- Acceptable proof of address
- Shareholder(s) passport and license
- Director(s) passport and license
Where Can a Foreign Business Open Saving Accounts?
Foreign businesses can open savings accounts in a number of international and offshore jurisdictions. This includes opening accounts in jurisdictions like the Isle of Man, Jersey, Guernsey, Panama, Singapore, and even the United States.
However, the specific jurisdictions that will be available to each business depending on a wide range of factors. Some of these factors include:
- Country of registration
- Country of operation
- Industry of operation
- Where incoming transfers originate
- Where outgoing transfers are sent to
- Desired currencies
- And more
With this in mind, it’s important that you take time to reflect on your specific business profile and goals before deciding where to open accounts.
Jurisdictions to Open a Business Savings Account
The following jurisdictions could be suitable for foreign companies looking to open a savings account:
- Isle of Man
- United States
Alternatively, if you have a local business that requires a savings account, you can open an account in the country where the business is registered.
Frequently Asked Questions
Below are three of the most common questions that we receive from people looking to open business saving accounts. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
What Types of Business Savings Accounts Are Available?
The types of savings accounts that are available to companies vary by country. In the United Kingdom, these types of accounts include easy-access accounts, notice accounts, and fixed-rate bond accounts. In the United States, these types of accounts include traditional savings accounts, money market accounts, and fixed-deposit accounts.
Where Can I Open a Business Savings Account?
You can open an account in the country where your company is registered. Alternatively, if you would like to explore business bank accounts in foreign jurisdictions, you can consider a wide range of options. These options include stable banking jurisdictions like the Isle of Man, Jersey, and Guernsey as well as offshore jurisdictions like Panama.
What Are the Benefits of Business Savings Accounts?
Business savings accounts offer a way for companies to keep access to their money while earning higher interest. This is an effective way for business owners to manage short term capital constraints while also continuing to grow their capital. Most companies can open an savings account with their existing bank. However, opening accounts with banks in other countries is also possible and can often result in higher interest rates.
Ready to Explore Your Options?
If you would like assistance navigating your banking options at home or abroad, we can help.
You can access GlobalBanks IQ, our international banking intelligence platform, in just a few clicks. Unlock our bank database, individual bank profiles, account opening strategies and reports, banker scripts, and more.
But, if you want a 100% personalized account opening service that taps into our team’s expertise and provides direct banker introductions, you can get started with GlobalBanks Insider.
Of course, if you have any questions, please contact us directly.