Aldermore becomes first bank to provide independent business savings rate-checking tool
New research from Aldermore shows almost a third (32%) of SMEs surveyed in the construction sector admit their business receives 0 per cent interest on their surplus cash. A further 18 per cent say they don’t know what interest rate their business is currently receiving on their surplus funds.
Despite receiving low amounts of interest, the figures also show many SMEs are regularly reviewing their surplus funds. The research found that businesses regularly think about the best home for their surplus funds with more than six in ten (62%) reviewing their accounts at least once a year. But the survey suggests that many SMEs are simply not shopping around to get the best deal or find the process too much of a hassle.
The research, which surveyed more than 1,000 UK SMEs, found that of those construction businesses surveyed with surplus funds, almost half (49 per cent) hold the majority of their surplus funds in a business current account, whereas 31 per cent keeps theirs in a business savings account. These findings follow earlier Aldermore research which found that 9 out of ten SMEs (91%) in Britain who have a business savings account hold it with the same provider as their current account.
With the latest figures from the BBA shows cash held by SMEs in current and deposit accounts totals £152 billion*, the latest research highlights that small British businesses are missing out on millions of pounds in lost interest every year.
The main findings from the construction sector include:
- The average interest rate received on surplus funds is 0.50 per cent;
- 62 per cent of SMEs receive between 0 – 0.5 per cent, 32 per cent of these receive 0 per cent;
- 33 per cent of SMEs review their accounts more than once every six months and 9% once every six months. 9% admit they never review their accounts;
- 20 per cent of SMEs do not have any surplus funds
To improve the information available to the UK’s time-poor SMEs, today sees the launch of Aldermore’s SME Rate Checker. Working with Savings Champion, the new independent service uniquely available on Aldermore’s website allows SMEs to check the rates of 91 savings institutions to see the current rate of interest being earned on their current or business savings in just a few clicks. The process, which takes a matter of seconds, then gives a comparison to what they could be earning at Aldermore.
Commenting on today’s news service, Simon Healy, Managing Director of Savings at Aldermore said:
“It is clear many construction SMEs are not getting the most out of their surplus funds. While the interest rate should be the first thing you should know about your account, businesses regularly tell us that it really isn’t as straightforward as it should be to find out what they’re earning.
“To those businesses who don’t know their rates or who don’t shop around, I urge them to take just a few moments to take a look. With our SME Rate Checker, it is easy to do in moments what can sometimes be an onerous task with some providers.”
“We believe it should be really easy for customers to find something as fundamental as the interest rate they are earning on their spare cash. This is why we’ve teamed up with Savings Champion to offer the UK’s first SME Rate Checker tool, to make it as easy for SMEs banking with any provider to find the rate they’re earning on their hard-earned cash as it already is for Aldermore customers.”
Sue Hannums, Director at Savings Champion added:
“We’re pleased to be working with such an innovative provider in Aldermore. The Bank has become a key provider bringing much needed competition to the business savings market and today’s SME Rate Checker is will only benefit business savers further.”