UK businesses are collectively missing out on over £532m in additional interest a year by keeping their savings with one of the big five banks rather than a challenger, claims a new study.
Research released by OakNorth has found that SMEs in the UK saved £66.6bn in deposit accounts, of which 74% is held with the big five banks.
These banks offer an average rate of just of 0.38% compared to the 1.46% average rate offered by the top 10 challenger banks.
OakNorth offers fixed bond deposit accounts for businesses with rates of up to 1.51%.
Joel Perlman, co-founder of OakNorth (pictured above), said: “The interest rates being offered by the largest banks in the market are appalling, yet still the vast majority of businesses keep their savings with them.
“As an entrepreneur running a bank for entrepreneurs, I fully appreciate that business owners' time is incredibly important and the potential return needs to warrant the time spent on opening an account.
“With ongoing Brexit uncertainty, a reduction in consumer spending, and the pound being worth … less than what it was before the referendum vote, it is essential that businesses make their money work harder and shop around for the best rate available.
“Additionally, there are so many unforeseen expenses such as cyber-attacks that can arise and impact cash flow, so the more that businesses can do to safeguard themselves, the better.”
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