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.”
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Close Brothers’ banking division reports 6.6% loan book growth
Close Brothers Group PLC has revealed that its banking division has seen a 6.6% growth in its loan book in the 11 months to 30th June 2018...
Leeds introduces two-year fixed rate BTL product
Leeds Building Society has launched a two-year fixed rate buy-to-let (BTL) mortgage product as part of a wider refresh of its 70% LTV BTL range...
Just 20% of Brits would opt for a challenger bank
Only 20% of UK residents would opt for a challenger bank if they were opening a new account today, according to research from Equifax...
Santander to form digital investment banking team
Banco Santander has announced that a new digital investment banking team will be formed within Santander Corporate & Investment Banking...
Metro Bank introduces developer portal
Metro Bank has launched a new developer portal for FCA-registered third parties wishing to build services on top of its APIs...
Wesleyan Bank appoints new head
Wesleyan Bank has appointed David Brownbill (pictured above) as its new head of indirect sales...
Arbuthnot announces profit surge
Arbuthnot Banking Group has reported a half-yearly profit before tax of £3.5m for the six months to 30th June 2018, up from the £2.5m recorded during the same period last year...
Temenos extends contract with Northern Trust
Temenos has signed a multi-year contract with global financial services company Northern Trust...
TSB adds new director to board
TSB Bank PLC has announced the appointment of Andy Simmonds (pictured above) as an independent non-executive director...
60% of Brits want ‘peace of mind’ when using cards online
Three-fifths of Brits (60%) want ‘peace of mind’ – regarding online security and fraud prevention – when using cards online, according to recent research...
Tandem reaches 250,000 customers
Tandem has announced it now has 250,000 customers across its cashback credit card, fixed term savers and account aggregating banking app...