There is widespread ignorance among UK small firms of their own surplus funds, with nearly half unaware of the current rate of interest on their deposit account, new research has revealed.
The survey, conducted by Alliance & Leicester Commercial Bank (ALCB), found that 30 per cent of bosses only had a rough idea about the returns that their surplus cash was generating.
Worryingly, 71 per cent of businesses that hold a 30-day notice account admitted they did not know the rate of interest they were accruing.
The study also found that over half of firms with deposit accounts opened their account with their current bank, even though they are allowed to look around for the best deal at other providers.
ALCB said that the amount of firms who wrongly believe they are gaining a certain interest rate on their accounts means there is a £141 million difference between their assumption and reality.
Believing incorrectly that they received £867 million in interest, British businesses actually only gained £726 million over the last 12 months.
Alex Smith, head of deposit accounts at ALCB, said that it was “quite shocking” that British businesses continue to settle for raw deals.
“The competitiveness of business banking services has been the subject of much scrutiny in recent years and rightly so.
“Our research shows that deposit account interest rates are very important to businesses, therefore owners should regularly review how competitive a deal they are receiving.
“It has become a lot easier to switch banks and I hope that these findings will highlight how much businesses are missing out and encourage them to take a closer look at their finances.
“A small amount of time spent finding a better deal could save business owners thousands of pounds a year,” he said.
