Interest rates – is your cash working for you?

With savings rates at one of their lowest levels on record, investors are finding it increasingly difficult to access rates that produce income which is even close to real returns. The retail prices index (RPI) is running at 5% and Bank of England base rate is still at 0.5%. As a consequence, those who wish to hold cash whether for working capital or personal monies, find that the capital is losing value in real terms.

Many bank accounts offering easy access are offering minimal rates of interest with some as low as 0.1%. This is particularly common with business accounts.

However, there are solutions available and this is an area that we have been actively reviewing with our clients who hold cash. We can arrange savings accounts with UK banks currently offering rates of up to 2.8% p.a. even for accounts where access to cash is required within a few working days.

Example

We recently advised a client who was holding £600,000 in several savings accounts. The cash was held in instant access accounts receiving an average of 1.1% in interest.

We were able to arrange for this to be moved to two easy access accounts which increased the interest rate payments to 2.7% gross AER (Annual Equivalent Rate). This resulted in a projected additional income of £9,600 p.a.

This is a service we offer to any firms who are holding and/or wish to continue to hold reasonable levels of cash. We would be happy to discuss your specific circumstances if you believe that you are not obtaining a competitive rate on your existing accounts.