New research from Cambridge & Counties Bank reveals that around a third (30%) of business deposit accounts are paying 0.1% Gross/AER or less on balances of £25,000, highlighting the real opportunity for UK businesses to shop around. The bank reveals that in the current low yield environment there are now only seventeen providers offering businesses an interest rate of more than 1% Gross/AER or more on balances of £25,000, a figure which has fallen by around two thirds (64%) from the number available back in December 2015.
Mike Kirsopp, Chief Executive Officer at Cambridge & Counties Bank, said: “There is a significant spread of rates on the market so businesses have a great opportunity to shop around to get a better return on their deposits. It’s all too easy to stick with the same old bank but we’d urge SMEs to make it their New Year resolution to settle for more and take advantage of the higher rates that are available on the market”
Following the August rate cut by the Bank of England, the average rate available for accounts with a balance of £25,000 has continued to decline to 0.41% Gross/AER. This is 38% down from the start of the year and means that UK SMEs are missing out on an estimated £4732 million of interest.
“SMEs have around £69 billion in deposit accounts(3) and much of this is in low interest paying accounts meaning they are missing out on literally hundreds of millions of pounds a year in interest. The latest figures also show business deposits were up 3% since the start of 2016, but too many businesses are getting a raw deal.”