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Savings rates

The UK Bank Base Rate was held at 5.25% in November.

You should check the rate on any savings accounts you have with high street banks, as these may be lower than market rates. While having a small amount in these accounts for convenience may be fine, you could be losing out on interest if you have more substantial deposits with them.


8th December 2023

Looking at rates at the time of writing (on Tuesday 5 December) an indicative sample of the rates you can secure at present are as follows:

Source: 05.12.23

We also hold some cash in portfolios for the purpose of paying fees and the rate for this is currently 4.63%, which while not the best rate available is competitive.

We have not included institutions in the table above as rates change quickly.

Cash management services

As mentioned in our Investment Committee article, we have been looking at cash management services. These are essentially platforms for cash deposits which allow you to easily switch between different deposits accounts without having to go through the arduous account opening process each time.

For those with a larger short-term deposit or entities such as Trusts, pension funds and Companies where opening accounts is more difficult, using a cash management service can simplify the ongoing administration and makes it easier to ensure the overall rate of interest remains competitive.

When you are dealing with a large sum of money, while the interest rate is important so too is ensuring the deposit is protected by the Financial Services Compensation Scheme (FSCS) in the event an institution should become insolvent. For individuals, this is £85,000 (£170,000 for a couple) and entities like a trust or some companies this is £85,000 per institution. Opening multiple accounts to ensure the funds remain protected by the FSCS can be extremely onerous especially for trusts and companies.

For our chosen cash management service, while it will be necessary to carry out the normal money laundering checks up front, once identification is provided, multiple accounts can then be opened from the service.

Rates are variable and will change over time but below is an indication of the average interest you could currently earn on £500,000 held in a range of immediate access accounts fully protected by FSCS:

Individual           4.5%

Company           3.8%

Trust                  3.9%

If you would like to review the interest rates you are getting currently or want to know more about our cash management service, please speak to your Old Mill financial planner.