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No interest rate for small firms

Some small businesses are receiving 0% interest rates on their bank accounts, according to new research by MoneyFacts.

The study found that the small firms have £55 billion on deposit in UK banks and are receiving an average interest rate on company savings of £10,000 of 0.19%, down from the 2.6% it was at the same time last year.

Small firms with business cheque accounts with a balance of £25,000 have seen rates drop to 0.2%, from 2.8 % at the start of 2008.

Despite the fall in interest rate for small businesses, Phil Orford, chief executive of the Forum of Private Business has said that it is not all bad news and that small companies need to shop around for the best deals.

“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,” said Mr Orford.

This was posted in Bdaily's Members' News section by Ruth Mitchell .