SMEs could be missing out on thousands of pounds in interest because of rates on some savings accounts.
Allica Bank’s SME Monthly Savings Tracker monitors the average savings rates offered by big banks compared to the savings interest rates offered by challenger banks for comparable SME savings products.
It says it has shown a “continued and significant gap” between the rates SMEs are offered by challenger banks and their larger, incumbent competitors.
Allica says that high street banks are still offering an average rate of 1.45% to small business on their savings. In comparison, it says its data shows that challenger banks are offering rates of up to 4.33% on the same cash.
This means that the average SME with £75,000 of savings who is banking with one of the big banks is missing out on nearly £2,160 a year in extra interest.
The bank is calling for the incoming UK government and regulators to force banks to notify their SME customers of the top rates in the market and where they can be found. It says this will “increase transparency in the market, encourage competition, and help small businesses to make the most out of their hard-earned savings”.
Richard Davies, CEO of Allica Bank, said:
“Allica’s goal is to help SMEs succeed and make the most of their hard-earned cash, which is why we are calling for a shake-up to the business savings market. It’s a tough time to be an SME in the UK and the last thing small business owners need is to be shortchanged on their savings – many without even knowing it.”
The research tracks the top rates offered every month by the challenger banks and contrasts it against those rates offered by the six largest incumbent providers in the UK – Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander.
Allica Bank recently wrote to the Treasury Select Committee (TSC) asking MPs to investigate what it called the “lack of transparency” in the business savings market. It has also launched a campaign, The Great British Savings Squeeze, to tackle the issue.
