SMEs miss out on £40m in interest by leaving £161bn in accounts offering pitiful returns

Recent financial research has revealed that SMEs are missing out on around £40 million a year in interest payments, by leaving their cash in bank accounts offering pitiful returns.

Experts have found that the amount could be raised significantly if just 10% of the money deposited by small and medium-sized businesses in UK bank accounts was moved into more competitive accounts offering as little as 0.25% more interest.

Finance specialist Andrew Thatcher claimed that all SMEs could potentially benefit from paying more attention to their bank accounts.

“The reality is that, unlike larger businesses who have the resource to proactively and professionally manage their cash, SMEs are unable to constantly be opening bank accounts, researching bank risk and moving money around,” said Mr Thatcher, leader of the recent study into SME savings.

At this time of year, the public tend to be urged to switch their current account to find a better deal. But the same does not seem to be true among the business community.

According to Bacs Payment Schemes, which runs the UK’s Current Account Switch Service, £161billion of SME deposits have been earning next to no interest in practically stagnant accounts.

“It makes sense for small businesses to check periodically whether or not the banking provider they have is still right for them; it may be that it is but, if it isn’t, it’s very easy to switch,” said Anne Pieckielon, from Bacs Payment Schemes.

“Another one of the hurdles for businesses making that change used to be the uncertainty around when the switch would actually take place,”

“With the Current Account Switch Service, businesses can choose the date they want and be confident that the move will happen on that day.”