Personal finance headlines and best-buy tables are dominated by retail savings products, with very few column inches dedicated to helping businesses determine the best places to stash their cash.
However, with the new year swiftly approaching, many businesses are looking to do a spring clean of their finances, so we’ve provided our top tips for making the most of your money in 2019.
Shop around for the best rate
Three-quarters of SME deposits (74%) are held with the big five banks. Less than one in 10 businesses have switched savings provider in the last three years, which means they’re potentially missing out on hundreds of millions of pounds worth of interest each year. In fact, we did some research on this last year and found that British businesses were losing over £537m in interest every year by depositing their cash with the high street banks, rather than opting for a challenger bank. So top tip number one: shop around for the best rate – you can either do this individually or by using a price comparison website to save some time and see all the rates in one place.
Make sure your money is FSCS protected
Research conducted in 2015 found that the average UK business keeps over £270,000 in savings. The Financial Services Compensation Scheme (FSCS) protects deposits up to £85,000. If a business wants to be extra secure, they can split their money across multiple accounts to ensure they always stay below the £85,000 limit. There are several institutions that offer this service to businesses.
Make the application process as simple as possible by getting your documentation in order
As a business, applying for any bank product can be a very time-consuming and painful process, so to make things slightly easier for yourself, try to get all the documentation you’ll need in order. For example, we require the name, date of birth and residential addresses for all applicants (including those connected with the account – business directors, members, shareholders). If you prepare all this information in advance, then applying for an account with us can take as little as 10 minutes.
Review the reviews
Customer reviews are a great way to get a feel for how other businesses have found their experience with the bank. If the application process, rates and levels of protection aren’t enough to convince you to stash your savings with a certain provider, then reading though reviews can be useful.
Make sure you choose the right account for your needs
There are several providers in the market offering a range of products – everything from fixed-term accounts to easy-access and notice accounts. If you don’t want to lock up your money for a set period, then an easy-access or notice account might be a good fit. If, however, you’re happy to keep a portion of your savings stashed for six months to a few years, then you can typically benefit from more competitive rates.
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