Popular Easy Access product will now pay SMEs 1.25% AER
Following the increase of the Bank of England Base Rate to 1.25%, Recognise Bank has raised the interest rate of its Business Easy Access Savings Account to match. The popular account will now pay small business savers 1.25% AER from the middle of next week, an increase that will benefit both new and existing customers.
Recognise said the move was to show support for hard pressed SMEs struggling with rising costs, but often receiving very low interest rates on their savings from the big banks.
The big banks think they’ve got SMEs – and their cash – over a barrel
Bryce Glover, CEO
Bryce Glover, CEO for Recognise Bank, said: “Business savings rates have been in the doldrums for years, with the biggest banks, who dominate the business banking sector, still paying as little as 0.01% AER to their SME customers. They work on the basis that business owners don’t have the time to shop around for better rates, so they think they’ve got SMEs – and their cash – over a barrel.
“We’ve been blown away by the success of our Easy Access Business Account since it launched in April, and it shows that small businesses really want an account that’s easy to open, simple to use and most of all pays a decent rate. When we launched Recognise Bank we had a mission to support small and growing businesses in the UK – with this interest rate rise, we’re showing that we are good to our word.”
Research* by Recognise Bank found that British SMEs keep an average of £75,000 in cash: 30% keep it as an emergency fund; 29% use it as a buffer in case of cashflow problems; 23% are saving for future investment in their business growth. Yet nearly half of firms (49%) don’t bother putting their cash in a savings account because of the perceived hassle of moving money between accounts, so they leave it in their business account earning zero interest.
Glover added: “The success of our Easy Access Account shows that small businesses want to work their cash surplus harder and earn some interest, but they also want the flexibility to be able to access it to pay bills, or in the worse case scenario, as a fall back for cashflow challenges.
“With the economy struggling and the cost of living rising, SMEs are facing more challenges than ever before. So, they need every bit of support they can get. If businesses aren’t earning a decent rate on their savings, I urge them to vote with their feet.”
Recognise Bank’s Business Easy Access Account pays 1.25% AER, is FSCS protected and doesn’t require the saver to have a business current account with Recognise. It can be quickly opened online and simply managed via the Bank’s website, with dedicated telephone support.
Recognise Bank was created to provide SMEs with digitally enabled, relationship-led banking, offering a range of unregulated lending options via a network of relationship managers across the UK. The Bank hit a milestone of £100 million in lending and £95 million in deposits through its range of personal savings accounts. It also announced fresh capital of £8.7 million following successful fund raising, to be used to develop it’s digital capability and support further lending.
|Account Name||Business Easy Access Account|
|Gross Per Annum %||1.25%|
|Can Recognise change the interest rate?||Yes – the account has variable interest|
|How can the account be opened and managed?||The account can be opened online and managed using our Online Secure System, with support from telephone.|
|Can money be withdrawn||Yes, with immediate access|
AER stands for Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid and compounded once each year; Gross p.a. is the interest rate without tax deducted; Variable Rate means Recognise Bank can change the interest rate.
*Research was carried out amongst the financial decision makers of 500 SMEs with between 1 and 49 employees by 3Gem in November 2021