🔔 Negative Interest Rates?

It has been suggested that RBS/NatWest could charge its business customers negative interest rates – which would effectively mean you paying the bank to hold your money – which has caused consternation and highlighted just what a bad deal many businesses are currently getting from their banks.

The warning was outlined in a letter sent to the bank’s reported 1.3m business customers last month, which could result in an account holder with £10,000 seeing that balance fall the following year, as the bank charged a negative interest rate. Even though it has said it has no intention of expanding this plan to personal account holders, it leaves businesses – especially small businesses – reeling at the thought of even greater costs to deal with their everyday business banking, and other banks have not ruled out similar moves for either business or personal customers.

NatWest does not cover itself in glory when it comes to business banking, with its top paying savings account for businesses paying 1.05%. But this stands out against the majority of its accounts which pay a paltry 0.55% or less, with a 95-day notice period to get 0.5% and plans for some of these higher interest accounts to have rates slashed by the end of the year.

We have heard from many business customers who are unhappy with the service they receive from their bank, so the clear message from us is to switch to one you are happier with and that will pay you more interest. For example, Aldermore’s Easy Access Business Savings Account Issue 5 is paying 1.1% with no need to give notice for withdrawals and you can get this rate on deposits of as little as £1,000. If you had £50,000 on deposit, this would give you £550 a year, rather than £250 at 0.5% in interest.

If you are prepared to give some notice before withdrawals, then your business could get 1.55% with Cambridge & Counties 120 Day Notice Business Savings Account – Issue 2, on deposits of £10,000 or more. On £50,000 this would pay you £775 a year. 

If you are prepared to tie your money up for longer, then Cambridge & Counties is offering 2.75% on a five-year fixed rate bond for deposits of £10,000 or more. This account is operated by post, you cannot access your money during the term and would give you £1,375 based on a deposit of £50,000 for the first year.

But dealing with your own business is hard enough without having to worry about where your business savings need to be to make you the most money, so we have developed our Business Concierge Service, that has been proven to double your returns as a minimum after fees.

To find out more about how we can help your business grow its reserves more quickly, call us on 0800 321 3581.