Business cash management: a strategic lever still too often overlooked

When your business has surplus cash, letting it sit in a current account is essentially losing money. Yet many small businesses hesitate to take action, often due to a lack of simple, flexible and accessible solutions.

The good news is this strategic lever is no longer reserved for large corporations. Today, managing your company’s surplus cash is easier than ever thanks to modern, flexible alternatives. Here’s how to take advantage.

Summary

1. Why business cash placement matters
2. Main options for business cash placement in 2025
3. Vivid: a business account that helps grow your cash
4. FAQ

If you want to explore a comprehensive perspective on managing finances while working independently, check out our detailed guide Paid business account: the new way to grow your cash flow.

Why business cash placement matters

Having a cash reserve is vital to protect your business. But once you reach a certain threshold, leaving that money idle no longer makes sense. Inflation erodes purchasing power, and you miss valuable opportunities. 

Placing your business cash allows you to:

• Generate passive income without taking excessive risk
• Plan ahead for future needs (investment, taxes, salaries)
• Optimise your overall financial management

Best practices for business cash placement

Placing business cash is not just about chasing yield. It’s a strategic approach that must match your operational needs. Before taking action, you should define a clear, structured strategy. 

Ask yourself the right questions: 

• How much cash do I need to keep instantly available? You should always hold a reserve to handle emergencies (social charges, late payments, breakdowns). This portion should stay liquid at all times.
• What is my placement horizon? Short term (up to 3 months), medium term (6–12 months), or long term (1 year or more)?
• What is my risk tolerance? Would you prefer lower returns with low risk, or are you open to some volatility for better performance? Your business profile matters as much as your personal one.
• Do I have planned expenses in the coming months? Hiring, moving office, buying equipment? You’ll need to factor those into your strategy to avoid blocking funds at the wrong moment.

Are you a freelancer? Check out our full guide to becoming a freelancer and optimising your finances.

Main options for business cash placement in 2025

Fixed-term deposit accounts (CATs)

These are traditional placement products: locked deposits with a fixed duration and a defined interest rate. 

Advantages: 

• Capital is secure

Disadvantages: 

• Funds are locked for a set period 
• Interest is only paid at maturity
• Early withdrawals may incur penalties

Professional savings accounts

More flexible than CATs, these accounts allow you to deposit funds that stay accessible. However, yields tend to be low, and access may be limited for microbusinesses.

Advantages: 

• Funds are always available

Disadvantages:

• Yields are often low
• Few offers are accessible to freelancers or small businesses

Medium and long-term investment products

These include life insurance, mutual funds, euro funds, diversified portfolios, etc. They are more investments than placements, requiring a longer time horizon and some risk appetite.

Advantages:  

• Higher performance potential

Disadvantages: 

• Volatility and risk of capital loss
• Less suitable for short-term treasury management

Looking for a reliable alternative to traditional placements? Discover why term deposits remain a top choice in 2025 in Term deposit for businesses: the best alternative in 2025.

Vivid: a business account that helps grow your cash

At Vivid, we’ve redesigned financial tools for small businesses. Our business account is built for simplicity, efficiency and returns, with no hidden fees or admin headaches.

Open your Vivid business account in minutes and benefit from: 

• 100% online setup, no appointments, no endless paperwork
• Flexible plans to suit your business, including a free option
• A full IBAN, free VISA card and unlimited free transfers
• Cashback on business expenses, up to 10%
• Built-in accounting tools to save time
• A flexible cash placement solution with up to 4% annual return, the Vivid Interest Account

The Vivid Interest Account: flexible, daily cash placement for your business

We offer a smooth, constraint-free approach designed to keep pace with your business. You shouldn't have to choose between security, liquidity and return.

We believe your funds should remain accessible, while still earning interest. That’s the logic behind our Interest Account.

You can open it instantly from your Vivid app and transfer surplus cash whenever it suits you. Your funds start earning interest immediately.

Key benefits of the Vivid Interest Account 

• Daily interest payments credited directly to your balance.
• Fixed rate known in advance, depending on your chosen plan.
• Funds are always accessible, with no penalties or withdrawal delays.
• No minimum or maximum deposit, place what you want, when you want.
• Zero paperwork, everything is done online, via your Vivid account

No commitment required. You stay in control of your liquidity while making it work for your business.

FAQ

Can my company place cash even if it’s just starting out?

Absolutely. With Vivid, there’s no minimum capital requirement. The Interest Account is available to freelancers, sole traders and SMEs. You can start with as little as £100 for one week if you like.

How long do I need to lock in funds for a cash placement?

Traditional banks often require several months or years. But with the Vivid Interest Account, your money stays available at all times, no penalties, no lock-in, even with a fixed rate.