Lightyear's analysis indicates that businesses with a need for flexible cash access are negatively impacted by low interest rates. The average interest rate for instant access accounts among major banks is merely 1.54%, which falls short of inflation rates. This poses particular challenges for SMEs, who often need liquidity for operational needs. Although notice accounts offer better rates, they impose lengthy lock-in periods, making them unattractive for many businesses. New alternative products from challengers, like Lightyear’s business account, aim to provide better flexibility and returns.
Businesses requiring flexible access to cash face penalties due to low interest rates, averaging just 1.54%. SMEs particularly struggle amidst the need for financial resilience.
Lightyear's analysis reveals that businesses could lose out on approximately £8,000 in interest over five years by using instant access accounts instead of 95-day notice accounts.
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