NatWest and Royal Bank of Scotland (RBS) have warned businesses they may have to charge them to accept deposits due to low interest rates.
Alan Sneddon, Director of Gale and Phillipson’s Dynamic Cash Management service in the North East, said: “This is not good news, but business owners and directors shouldn’t worry.
“The driving force for this decision is the potential for the Bank of England base rate to drop into negative territory. Mr Carney has previously given his assurances that this won’t happen. However each banking institution will take an independent view in setting their own rates. The resulting action could be a charge imposed for simply holding a firm’s cash reserves.
“Typically, corporate accounts only offer between 0.05% and 0.15% anyway. Cash management services can offer a solution to this problem. For example, there are rates on the market that pay 1.00 %( AER) on easy access accounts; 1.30 %( AER) on 45 day notice. Now is the time for firms to reassess how they manage their cash.”