Most charities are earning less interest than the Bank of England base rate, according to research, so Charity Bank is encouraging all charities to review the interest being paid on their savings.
Research conducted by Third Sector and Flagstone has found that 85% of the 194 charities surveyed are earning less interest on their money than the Bank of England base rate of 0.5 per cent. In addition, nearly a third are earning less than 0.1% interest.
The ethical bank which lends to charities and social enterprises is not surprisingly taking the opportunity to highlight its Ethical Easy Access Account, which offers 0.75% gross/AER to charities looking for same-day access to their deposits.
Eligible deposits up to £85,000 are protected by the Financial Services Compensation Scheme, the UK’s deposit guarantee scheme.
Justin Hort, Head of Savings at Charity Bank, said: “It’s disheartening to think charities are not getting the best possible return on their savings… Because we use our savers’ money to fund loans to other social sector organisations, charities can ensure their reserves are working for good all the time whilst obtaining a competitive rate of interest.”
Barrier to switching account?
Why don’t more charities switch banks to find a better rate of interest? The research published in January found that 58% of the charities surveyed are deterred from switching “by the amount of time and paperwork involved”.
Charity Bank, which has provided over £200 million of loans since 2002 to support organisations working to improve society, points out that it has recently introduced online applications across all its deposit products, to help make opening an account even easier.
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