Firms getting 0% on accounts
Jan 19 2009
Some businesses are getting zero per cent interest rates on their bank accounts, according to new research by MoneyFacts.
The study, commissioned by the Financial Mail on Sunday, found the average interest rate on £10,000 of company savings is 0.19 per cent, down from 2.67 per cent this time last year.
Rates for business cheque accounts with a balance of £25,000 have dropped to 0.2 per cent, from 2.82 per cent in January 2008.
Small businesses have £55 billion on deposit, with Phil Orford, chief executive of the Forum of Private Business, telling the newspaper that these firms will suffer.
'However, it is not all bad news. A number of banks are trying to improve their balance sheet and are offering rates above the bank rate of 1.5 per cent in order to attract businesses,' he adds.
The European Central Bank cut its interest rates on Friday to two per cent, a reduction of 50 basis points.
It is now at the lowest rate since December 2005, following a 0.75 per cent drop last month.
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