Analysis of Moneyfacts and British Banker Association data by Cambridge & Counties Bank reveals that in 2008, the average business deposit account rate for a balance of £10,000 was 2.93% Gross/AER but this has dropped to around 0.69% Gross/AER today.
Of the 261 UK business deposit accounts available, just 28 (or 11%) are paying over 1.5% Gross/AER.
Gary Wilkinson, chief executive officer at CC Bank, said: “The business deposit savings market is in the doldrums.
“Rates are depressingly low and one of the key reasons for this is that there has been very little competition here.
“We now have two very attractive and competitive business savings accounts, and are confident that we will continue to attract significant deposits, which is fuelling our growth as a bank.”
The new Cambridge & Counties Bank 95 Day Notice Account pays 1.95% Gross/AER, and follows on from the bank’s highly successful 30 Day Notice Business Account, which currently pays 1.75% Gross/AER.
The CC Bank 95 Day Notice Account is operated through a nominated existing current account which can be with any UK bank – all credits and withdrawals are made via this current account. Withdrawals and closures can be made on 95 day notice only. The minimum balance for the account is £10,000, and the maximum is £1 million.
The interest rate for the new deposit account guarantees to apply 100% of any Bank of England base rate changes until February 1st 2015.
Wilkinson added: “Since our launch, around a third of our customers have topped up their initial deposits with us. As our SME account balances continue to build, we are delighted to widen our product range with the introduction of another best-buy deposit account.”