By Claire West
- 32% of cash deposit accounts aimed at businesses pay 0.1% Gross AER or less
- The Investec Business High 5 Account always pays the average of the five highest savings business accounts. Its current rate is 1.96%3 Gross AER4
Amid growing concerns about the possibility of a double dip recession, new research from Investec Bank (‘Investec’) reveals that 9% of businesses with an annual turnover of at least £1 million have £626 million held in cash as a result of cancelling or postponing business development plans as they feel unsure about the economic and trading environment. The average amount of cash held by companies of this size as a result of this is £39,120.
Investec warns that much of this cash is being held in accounts paying poor returns.
Amount held in cash by businesses as a result of cancelling/postponing business development plans due to uncertain economic/trading environment and percentage of businesses with an annual turnover of £1 million or more...
Under £5,000 3%
Between £5,000 and £15,000 1%
Between £15,001 and £100,000 3%
Over £100,000 2%
Do not have any cash as a result of this 46%
Don’t know 34%
Jack Jones of Investec Bank said: “There is clearly some uncertainty about the economy and this has resulted in some businesses putting projects on hold, and much of the money for these is sitting in deposit accounts. However, the problem here is that many of these are paying derisory rates of return. Our research shows that 32% of accounts aimed at businesses are now paying 0.1% or less Gross AER on balances of £50,000, and some are paying no interest at all.
“Businesses hold billions of pounds in cash, and they need to make sure that they are receiving a good rate of interest on this.”
The Investec Business High 5 Account, which requires businesses to make a minimum deposit of £50,000, pays a market leading rate every week. 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. As well as being assured one of the best rates available, businesses also have the added benefit that the rate is set independently.
The Business High 5 Account, which has a three month notice period, does not rely on bonuses to inflate its rate. The current rate is 1.96%3 Gross AER.
To find out more about the Investec Business High 5 Account or Investec Bank’s other unique savings products, please call 0845 366 6333 or visit www.businesshigh5.co.uk