businesses are suffering from low interest rates on cash reserves through fear of leaving their deposits with an institution which may fail, says a Leeds wealth management expert.
High street banks are favoured as a secure place to leave cash as they are seen as too big for the government to allow to fail, says Leeds-based Pearson Jones’ investment director, Peter Heckingbottom.
“The systemically-important banks know this and so don’t offer good interest rates to businesses,” he added.
He says millions of pounds in business bank accounts are earning negligible interest rates.
Businesses should consider alternative savings accounts which are only available through certain investment wrappers, he advised.
However, they should take independent advice first, he added.