New research from Investec Bank (‘Investec’) reveals that 37% of businesses with an annual turnover of £1 million or more have a staggering £21.34 billion in deposit accounts paying less than 0.5% Gross AER4.
Investec estimates5 that if they switched this money to better paying accounts, collectively they could receive over £373.43 million in extra annual gross interest, equivalent to around £4,850 each.
Some 17% of businesses with an annual turnover of £1 million or more have over £100,000 each in accounts paying less than 0.5% Gross AER4, and 5% are receiving this level of interest on deposits of over £1 million1.
Commenting on the findings, Linda McBain of Investec Bank said: “There is no need for businesses to keep the money in poor paying deposit accounts. Around 32%6 are paying 0.1% Gross AER4 or less, but some accounts, including our Business High 5 Account, are paying rates of over 2% Gross AER4.”
The Investec Business High 5 Account, which requires businesses to make a minimum deposit of £50,000, pays a market leading rate every week2. This is because each week, the independent financial product research company Moneyfacts will take the five highest savings rates in the business savings market across the categories of no notice, 7, 30, 60, 90 and 90+ day notice accounts, find their mid-point and use this to set the rate for the Business High 5 Account. The account, which has a three month notice period, does not rely on bonuses to inflate its rate. The current rate for the Business High 5 Account is 2.25%3 Gross AER4.