Last updated: 16 October 2026
The question
Can I invest £100,000 of my company’s money in a savings account designed for individuals, to get a higher interest rate, and pay the capital and all the interest back to the company?
The short answer
You should not. Personal savings accounts are for individuals investing their own money. Putting company funds into one in your own name breaks most banks’ terms, may mislead the bank and creates tax problems for both you and the company. The company is the owner of the money, so the account should be in the company’s name.
The tax problems
- Director’s loan: if company money goes into your personal account, it is treated as money taken by you. It goes through your director’s loan account.
- Section 455 charge: if the loan is still outstanding nine months and one day after the company’s year end, the company pays a temporary tax charge of 33.75% of the balance.
- Benefit in kind: an interest-free or cheap loan of more than £10,000 is a taxable benefit, worked out using HMRC’s official rate of interest (3.75% from 6 April 2026), with Class 1A NIC at 15% for the company.
- Interest: the interest belongs to the company and is taxable in its accounts, even if it was paid into your account.
- Deposit protection: the Financial Services Compensation Scheme (FSCS) has protected up to £120,000 per eligible depositor per authorised bank since 1 December 2025, according to the FSCS, but protection for funds that really belong to a company may be disputed.
Example
A director moves £100,000 from the company to a personal account paying 5%. After a year she returns £105,000. The company is taxed on £5,000 of interest. If the money is not returned within nine months of the year end, the company owes £33,750 under section 455 until it is repaid. She may also have a benefit in kind of £3,750 based on the official rate, taxed at her marginal rate.
Better ways to earn interest on company cash
| Option | Points to consider |
| Business savings or notice accounts | Interest paid gross to the company |
| Fixed-term business deposits | Higher rates in exchange for locking money away |
| Money market funds | Spread risk across banks, need careful choice |
| Paying off borrowing | Saves interest at a higher rate than savings earn |
| Pension contributions for directors | Usually deductible for the company and tax-free for you |
Watch out for BADR
Large cash balances that are not needed for the trade can count as non-trading assets. If non-trading activities are more than about 20% of the company, you could lose Business Asset Disposal Relief when you sell or close the company.
Frequently asked questions
Is company interest taxed at 25%?
It is taxed at the company’s corporation tax rate: 19% for profits up to £50,000, 25% above £250,000 and a marginal rate in between.
Can I lend company money to myself and repay it later?
Yes, but director’s loan rules, section 455 and benefit in kind rules apply.
Do banks deduct tax from company interest?
No. Interest is paid gross and the company declares it.
Is the FSCS limit higher for companies?
No. The FSCS limit is £120,000 per eligible depositor per authorised firm, and banks that share a banking licence count as one firm.
Related: section 455 refunds, writing off a director’s loan and corporation tax rates.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with company cash and director tax planning. See our limited company accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
