Investec Private Bank (‘Investec’) has announced that through the launch of a new savings offering, it intends to dramatically increase the amount of money it has on deposit from UK businesses. It believes that the level of returns offered to UK companies are so poor, that by launching a new account that will consistently pay one of the most attractive rates in the marketplace, it can attract a significant amount of savings deposits from UK businesses.
The new Investec Business High 5 Account requires a minimum deposit of £50,000 and will pay a market leading rate every week1. 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 Investec Business High 5 Account. As well as being assured one of the best rates available, charities also have the added benefit that the rate is set independently. The new 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 2.44%1 Gross AER2.
New research3 from Investec Private Bank reveals that businesses with an annual turnover of between £1 million and £5 million have approximately £48 billion deposited with banks and building societies in the UK. However, its analysis4 reveals that 38% of deposit accounts targeted at businesses are paying 0.1% Gross AER or less in interest for balances of £50,000. Just over 16% are paying less than 0.1% Gross AER, and 3% are paying no interest at all.
Jack Jones of Investec Private Bank said: “Many of the interest rates paid on cash deposits from businesses are disgracefully low, and companies deserve better. Especially when our research shows that on average British businesses have around 27% of their assets in cash deposit accounts5.
“We view the cash deposit market for businesses as a great opportunity for us, and by offering one of the best rates available because of the transparency of the product ensures that it will always be competitive and we hope to attract a lot of business.
“We already offer an Investec High 5 Account for individuals and this has been instrumental in helping us increase the amount of money on our deposit book. Since the beginning of the year it has bought in over £500 million6. We are hopeful for a similar level of success in the business banking market.”