According to a report released by the retail bank, Aldermore, small and medium enterprises could alleviate pressure on their cashflow by paying more attention to their business bank account savings interest.
Aldermore polled 950 SME owners and sole traders and found that 62% are earning no interest on their business savings at all. Over half (53%) are earning less than £300 a year, while 65% had the same business bank account as their personal account provider.
While consistently low interest rates offer little incentive to save, 33% of respondents said they were spending their cash too quickly each month.
Around a fifth (19%) claim their bank does not offer high enough rates for noticeable interest to be earned.
Figures show that the average SME could be earning three times more on surplus cash compared to what it does now. According to Aldermore, the average interest rate they’re currently receiving is just 0.6%. They could be earning up to 1.9% on specialist one-year fixed-rate business bonds however.
Ewan Edwards, head of savings at Aldermore is urging small and medium enterprises to conduct due diligence so that they can find the best banking products on the market.
“It’s vital that business owners make their surplus cash work harder to provide additional financial support and to strengthen financial resilience.”
“Many businesses could be missing out on additional income that would be a boost when dealing with the multiple financial pressures of running a business. We encourage all business owners to shop around to find the best account on offer as this can make a positive difference in the long term.”
If you would like help or advice with any aspect of running your business, please feel free to contact PKB Accountants and we will be more than happy to help.