SMEs unaware of savings rates and missing out on millions of pounds
Aldermore become first bank to provide independent business savings rate-checking tool
New research from Aldermore shows almost a quarter of SMEs (24%) don’t know what interest rate their business is currently receiving on their surplus funds. A further 23% admit their business receives 0% interest.
Despite receiving low amounts of interest, the figures also show many SMEs are regularly reviewing their surplus funds. The research found that businesses do regularly think about the best home for their surplus funds with six out of every 10 (62%) reviewing their accounts at least once a year. But the survey suggests that many SMEs are simply not shopping around to get the best deal or find the process too much of a hassle.
The research, which surveyed more than 1,000 UK SMEs, found that of those businesses with surplus funds, over four-in-10 (41%) hold the majority of their surplus funds in a business current account, whereas 35% keeps theirs in a business savings account. These findings follow earlier Aldermore research which found that nine out of 10 SMEs (91%) who have a business savings account hold it with the same provider as their current account.
With the latest figures from the BBA shows cash held by SMEs in current and deposit accounts totals £152bn, the latest research highlights that small British businesses are missing out on millions of pounds in lost interest every year.
The main findings include:
– The average interest rate received on surplus funds is 0.60%;
– 51% of SMEs receive between 0 – 0.5%, 23% of these receive 0%; and
– 26% of SMEs review their accounts more than once every six months and 12% once every six months. 11% admit they never review their accounts.
– 20% of SMEs do not have any surplus funds
To improve the information available to the UK’s time-poor SMEs, today sees the launch of Aldermore’s SME Rate Checker. Working with Savings Champion, the new independent service uniquely available on Aldermore’s website allows SMEs to check the rates of 91 savings institutions to see the current rate of interest being earned on their current or business savings in just a few clicks. The process, which takes a matter of seconds, then gives a comparison to what they could be earning at Aldermore.
Commenting on this, Simon Healy, managing director of savings at Aldermore said:
“It is clear many SMEs are not getting the most out of their surplus funds. While the interest rate should be the first thing you should know about your account, businesses regularly tell us that it really isn’t as straightforward as it should be to find out what they’re earning.
“To those businesses who don’t know their rates or who don’t shop around, I urge them to take just a few moments to take a look. With our SME Rate Checker, it is easy to do in moments what can sometimes be an onerous task with some providers.
“We believe it should be really easy for customers to find something as fundamental as the interest rate they are earning on their spare cash. This is why we’ve teamed up with Savings Champion to offer the UK’s first SME Rate Checker tool, to make it as easy for SMEs banking with any provider to find the rate they’re earning on their hard-earned cash as it already is for Aldermore customers.”
Sue Hannums, director at Savings Champion added:
“We’re pleased to be working with such an innovative provider in Aldermore. The Bank has become a key provider bringing much needed competition to the business savings market and today’s SME Rate Checker is will only benefit business savers further.”
