Research commissioned by United Trust Bank (UTB) has found that UK charities could boost their incomes by over £377m1 a year just by earning an extra 0.5% interest on their £75.57 billion2 of cash reserves. The additional revenue raised would equate to the money raised by nearly six London Marathons a year3.
Even more remarkably, experts at the award-winning savings provider calculated that if charities switched 50% of the £75.57 billion cash reserves from an average Easy Access account (paying 2.14%4 interest for balances of £100k plus) to United Trust Bank’s 40-Day Charity Notice Account (paying 4.10% interest on balances over £5000), UK charities could earn an extra £740m5 a year in interest. That’s nearly 12 London Marathons!
United Trust Bank (UTB) commissioned independent savings expert Andrew Hagger of Moneycomms.co.uk, to examine the range of savings accounts available to UK charities. Their research revealed the differences between the highest and lowest paying accounts as well as the substantial boost charities could make to their incomes by utilising the benefits of Fixed and Notice accounts.
Analysis of 141 accounts available to UK charities was carried out on the 5th July 2024. Rates are for balances of £50,000 or greater.6
| Account Type | Highest Rate | Lowest Rate | Difference | Additional Interest p.a. per £50,000 balance |
| Easy Access | 3.75% | 1.05% | 2.70% | £1350.00 |
| Notice (up to 40 days) | 4.10% | 1.85% | 2.25% | £1125.00 |
| Notice (60 to 100 days) | 4.75% | 2.10% | 2.65% | £1325.00 |
| Notice (120 Days plus) | 5.25% | 3.40% | 1.85% | £925.00 |
| Fixed Term – 3-9 months | 4.90% | 1.91% | 2.99% | £1495.00 |
| Fixed Term – 1 Year | 5.20% | 3.60% | 1.60% | £800.00 |
| Fixed Term – 16 months to 2 years | 4.90% | 3.50% | 1.40% | £700.00 |
| Fixed Term – 3 to 5 Years | 4.60% | 3.50% | 1.10% | £550.00 |
UTB USP – Immediate access to up to 20% of balance on Notice Accounts
In response to charities wishing to make more of their cash reserves whilst also satisfying their liquidity needs, UTB has introduced what it believes to be a unique feature amongst UK Notice Charity Deposit accounts. Once per year, account holders can withdraw up to 20% of their Notice Account balance without notice and without penalty, enabling them to benefit from higher rates of interest whilst allowing them to respond to unplanned or emergency situations quickly.
Due to increased demand, UTB has also expanded the types of charities to which it can provide accounts. These now include Charitable Company (Limited by Guarantee), Charitable Incorporated Organisation (CIO), Excepted Charities and Exempt Charities that benefit UK and overseas.
Andrew Hagger of Moneycomms, commented: “To enjoy the better rates on offer from higher paying providers, there’s no need to uproot the existing current account relationship (which I appreciate many charities would be reluctant to do due to disruption/inconvenience) but there’s nothing to stop charities opening a separate charity deposit account or accounts with the growing range of more specialist charity savings banking providers offering a wider choice of more competitive savings options.”
Brian Todd, Head of Deposits at United Trust Bank, commented: “The rewards for charities switching to better paying accounts are there for the taking, and the difference between the most and least competitive rates available are substantial. Charities are constantly looking for ways to increase donations, but many may not realise how much extra revenue they could generate by being smarter with the cash they already have.
“We believe that UTB’s unique feature of enabling charities to withdraw up to 20% of their Notice account balances once a year without notice or penalty, makes it easier for finance managers and treasurers to make their reserves work harder, whilst retaining important liquidity.”
The information contained in this news release shouldn’t be considered as financial advice and if you’re unsure about how to manage your savings, please seek advice from a professional financial advisor.
All interest rates and calculations were correct at the time the research was completed by Moneycomms on the 5th July 2024.
1 – £377m – £75.57bn X 0.5% additional interest = £377,850,000 – rounded to £377m
2 – £75.57bn – According to the Charity Commission’s most recent Annual Return (2022), charities with an income of £500,000 or more are asked about their level of reserves in the Annual Return. Reserves are a charity’s funds that are freely available for it to spend on its charitable purposes, not tied up in fixed assets or restricted funds, and are held to help it operate effectively, including to meet unexpected costs. Proxy reserves were £75.57 billion in 2022.
3 – According to London Marathon organisers TCS, the 2023 London Marathon raised £63m – total fundraising for the 2024 London Marathon is not yet available. £377m Divided by £63m = 5.99 rounded to 6 London Marathons.
4 – 2.14% the average interest rate of all 43 Easy Access accounts available to UK charities during the research period.
5 – £740m p.a. – The difference between 4.10% and 2.14% is 1.96%. 50% of the £75.57bn reserves is £37.785bn. £37.785bn X 1.96% = £740,586,000 (rounded to £740m) – £740m Divided by £63m = 11.75 London Marathons ‘nearly 12’.