Small firms lack savings accounts

Less than a third of small and micro-sized businesses put money into a business savings account, research by Aldermore has found.

The SME bank surveyed more than 1,000 firms and found that 31% have a savings account.

Firms were asked the reasons for using a business savings account:

  • 40% of small and micro firms have a savings account to cope with unexpected costs
  • 35% use a savings account for taxes
  • 34% said they use it during cash flow fluctuations.

Of those that do have a business savings account, 9 in 10 hold their savings in the same bank as their current account.

The survey also found:

  • 14% of firms with a deposit account never check on their business savings
  • a quarter review their savings more than once every 6 months
  • 28% said they'd be more likely to save if interest rates increased in the next year.

Simon Healy, managing director of savings at Aldermore, said:

"It is concerning that only a minority of SMEs have a savings account, as surplus funds provide protection against unforeseen cash flow issues which can create real problems.

"This, coupled with the fact that nine out of 10 SMEs hold their savings with the same bank as their business current account, shows that businesses are simply not looking around."

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