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2-04-04 12:29
Business Account-holders Losing Out


UK businesses miss out on £422 million in interest a year because they do not shop around for the best bank accounts, new research has revealed.

A study commissioned by the Alliance & Leicester bank (A&L) found that there are about 1 million business deposit accounts in the UK.

Smaller businesses with a turnover of under £1 million hold roughly 830,000 deposit accounts, but the largest 5% of businesses hold 62% of the value in all accounts, the study revealed.

British businesses hold more than £36 billion on deposit - an average account value of £58,000. A&L said it is "difficult to understand" why businesses are not looking to make their money work harder.

According to the study, undertaken by two independent research groups, 57% of bosses opened their business account with the same bank as their private account provider.

Meanwhile, just under half could not specify the amount of interest being paid by their bank.

Alex Smith, head of deposit accounts at A&L Commercial Bank, said: "It is quite shocking that British businesses continue to settle for raw deals.

"The cost of not shopping around is huge at £422 million a year and our research shows that half of all businesses are overlooking the benefits of deposit accounts and therefore missing out on maximising the return on any surplus funds.

"However, we have seen evidence to suggest that business customers are beginning to look actively for alternatives to the traditional big banks and we would encourage more owners to shop around for the best deal for their business."


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