As interest rates are expected to decline, personal savers have been advised to capitalise on the remaining high rates. Which begs the question: is it now time for the population of UK small businesses to follow suit? Recognise Bank, a digital challenger bank, has consistently responded to interest rate changes over the past six months by introducing several appealing business saver accounts and passing on the Bank of England Base Rate to its customers – something which traditional banks have been critiqued for.
Over the course of the year, numerous major banks have been strongly criticised for not transferring the interest rate benefits to their SME customers, and there has been increasing political pressure to enhance these rates. To combat these concerns, in July the Financial Conduct Authority (FCA) released a 14-point action plan on cash savings to ensure people can access a competitive savings market. But has this been actioned sufficiently by banks?
Average business easy access still stands at less than 2% AER from major banks
As of November 2023, the average business easy access interest rate from these banks still stands at under 2% AER. A stark contrast to Recognise Bank’s 3.55% AER, which also gives SMEs the option to be paid interest monthly or annually.
Designed specifically for LLPs and Limited Companies, the Business Easy Access – Issue 2 has already proved to be remarkably popular with nearly £7 million pledged within the first 24 hours of opening. This account is alongside Recognise Bank’s variety of business savings accounts for all other business structures including the Business Easy Access – Issue 1 with a minimum deposit of £1,000.
When they go low, we go high
Despite the scrutiny faced by traditional institutions, Recognise Bank has consistently provided elevated savings rates for the underserved UK SME market in response to changing interest rates in the last six months, reaching a current peak of 4.50% AER. This rate is presently accessible through two business accounts tailored to different needs: 180 Notice and 1 Year Fixed.
Recognise Bank’s Chief Operating Officer, Ronelle Arbib, acknowledges the growing scarcity of reliable savings account options for SMEs seeking high-interest rates. She notes, “While personal savers often have plenty of choices, we recognised the need to extend a similar experience to small business owners. That’s why we developed a customised product for these businesses, aligning with our commitment to serve our customers to the best of our ability.”
As interest rates are anticipated to decrease from their peak earlier this autumn, numerous businesses might be contemplating securing a favourable rate while it’s still available. This may be particularly pertinent given that an estimated £250 billion worth of personal and business deposits sits in accounts that do not earn any interest. So, the question remains – will business savers reconsider opening a new account to capitalise on this moment? And what will they prioritise when selecting new accounts? Recognise Bank’s relationship-oriented approach has enabled them to consistently offer elevated savings rates over the past 6 months of rate changes and personalised support to their customers; a commitment which has been acknowledged by their customers and reflected in their maintained ‘Excellent’ rating on Trustpilot. For more information or to open an account, visit www.recognisebank.co.uk
