80 percent of charities are unhappy with their interest rates, according to latest research
24th January 2018 15:54 - Voluntary
80 percent of charities are unhappy with their interest rates, according to latest research: In a recent online survey, 197 charities were asked about their financial situation with their current bank, of which the majority claimed they were disappointed with the current level of interest they receive.
According to the latest findings, nearly a third of charities said they received less than 0.1% interest with their current account provider, and 85 percent earned lower than the Bank of England’s base rate (0.5%).
Despite their current financial predicament, over two fifths (42%) were worried about the potential risks of placing their money in banks not listed on the high street, most of which offer higher interest rates.
Nonetheless, when asked what stopped them from opening accounts with other bank providers, over half (58%) said they were put off by the amount of time and paperwork involved to set up new accounts; yet, others felt that keeping all of their money with the same bank was too much of a risk and instead, split their finances accordingly.
For money that is not spent on a daily basis, the following amount of charities stored their money in the following amount of accounts:
· Three or more accounts (27%)
· Two separate accounts (35%)
· One account (24%)
· Same current account as other finances (15%)
Commenting on the charities’ financial predicament, co-managing partner at Flagstone, Simon Merchant, said: "We knew that the persistent low interest rate environment, combined with the complexity of bank account opening processes, had created inertia and an over-concentration of deposits with a small number of banks. This research reveals the scale of that problem for charities."
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