More than a third of businesses are unsure what interest rate their business is currently receiving on their surplus funds, a study finds.
New research from Aldermore shows that 34 per cent of small and medium-sized enterprises (SMEs) don’t know what interest rate their business is currently receiving on their surplus funds, with a further 14 per cent admitting their business receives 0 per cent interest.
The research, which surveyed more than 1,000 British SMEs and follows a similar survey to last year, also shows more than eight in ten SMEs who have a business savings account hold it with the same provider as their business current account.
The survey also finds that SMEs aren’t reviewing their savings as regularly as they did last year. This year’s survey reveals that 55 per cent of businesses review their accounts at least once a year, compared to 62 per cent in 2015.
Almost half (47 per cent) feel the potential returns aren’t worth the effort meaning many SMEs are simply not shopping around to get the best deal or find the process too much of a hassle.
Of those businesses with surplus funds, almost half (46 per cent) hold the majority of their surplus funds in a business savings account, with just over a further third (34 per cent) keeping their funds in a business current account.
The most recent figures from the BBA shows cash held by SMEs in current and deposit accounts totals £163.5 billion.
Simon Healy, managing director of savings at Aldermore says that business savings play an important role for SMEs in covering unexpected bills, future investment and general cash flow, and it is therefore important businesses make the most of their money and shop around for the best rate.
‘While it is understandable that SMEs prefer to keep their surplus funds with the same provider as their business current account, in reality they are not making the most of their hard-earned money,’ he adds.
Further reading on business banking
See also: Opening a business bank account