On average, UK SMEs have savings balances of £446,000, according to the latest research from Hampshire Bank Trust*.
Further to this, nearly a third of respondents (30%) stated that they intend to increase their savings balances over the next 12 months to help cushion any potential financial bumps in the road amid nervousness about economic uncertainty.
Just 14% intend to reduce the amount of money they hold in savings, with the majority (56%) looking to maintain their current savings level.
Whichever way you look at it, that is a significant amount to be held in business savings.
Savings pots can be used not only as a cash buffer but also to help fund major purchases, in turn helping businesses to flourish and so all SMEs could potentially benefit from paying more attention to their accounts and returns.
However, many SMEs routinely opt for the savings account offered by their current account provider and are earning little or even no interest at all on hundreds of thousands of pounds held in the bank, potentially missing out on a useful source of income.
The research also pointed out that, on average, SMEs hold £409,000 in their current account – all of which will be earning little or no interest.
For every £1 held in a current account, there is just £1.09 in a business savings account. The key question is – do businesses really need to keep this much in their current accounts?
Our advice would be to make every pound count, making the most of opportunities to save for future growth.
If you need help maximising your savings interest, speak to us about the benefits of our Cash Advice Service - our business clients see an average increase of over four times the interest on their cash savings by using our service, compared to going it alone.
*Hampshire Trust Bank UK SME Savings Tracker 2017
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