Investec Private Bank research highlights poor rates from business savings accounts

The new Investec Business High 5 Account will pay the average of the five highest business savings accounts. Its current rate is 2.41%² Gross AER³. For balances of £50,000, 17% of business savings accounts pay 0.05% Gross or less1.

New research1 from Investec Private Bank (‘Investec’) reveals that for balances of £50,000 and £250,000, 58% and 54% of business savings accounts respectively pay less than 0.5% Gross. Equally alarming is the fact that less than one in ten (9%) accounts pays 2% Gross or more on balances of £50,000 and only 11.3% offer this for deposits of £250,000.

Investec Private Bank has launched a new savings account called the Business High 5 Account, which requires a minimum deposit of £50,000 and will pay 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 Investec 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 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 2.41%² Gross AER³.

Jack Jones of Investec Private Bank said: “Generally speaking, the level of interest offered to deposits belonging to UK companies is ridiculously low. Our research¹ shows that for balances of £50,000, 17% of business savings accounts pay 0.05% Gross or less, and there are three accounts paying no interest at all. This is totally unacceptable, and given that businesses have billions of pounds on deposit with banks and buildings societies, it is important that they shop around for a fair and competitive return.”

Research⁴ from Investec Private Bank reveals that businesses with an annual turnover of between £1 million and £5 million for example, have approximately £48 billion deposited with banks and building societies in the UK. Also, on average British businesses have around 27% of their assets in cash deposit accounts⁴.

To find out more about the Investec Business High 5 Account or Investec Private Bank’s other unique savings products, please call 0845 366 6333 or visit www.businesshigh5.co.uk

Notes to editor:
¹ Investec Private Bank analysis of Moneyfacts data on savings accounts aimed at UK firms and companies for balances of £50,000 and £250,000.
²The Investec Business High 5 Account always pays the average of the five highest savings rates as supplied by the Moneyfacts Group plc, across the categories of no notice, 7, 30, 60, 90 and 90+ day notice accounts. No more than one product from any bank, building society or financial institution is taken into account when calculating the AER. Moneyfacts is an entirely independent and impartial source of information and their selection charts can be seen throughout the UK national press and media. The rate is correct as at 19 August 2009 and subject to variation.
³‘AER’ stands for Annual Equivalent Rate and illustrates what the rate of interest would be if interest was paid and compounded once a year. ‘Gross’ stands for the rate of interest paid before the deduction of tax.
⁴ Investec Private Bank commissioned research. Continental Research interviewed 203 companies between 13 and 17 April 2009.