- Average charity savings rate is just 0.38%
- Charities receive almost 50% less interest than other savers
- Fair Investment’s new service offers rates of up to 4% to charities
Charitable donations fell by £1.3billion (11%) last year*, but instead of helping charities make the most of the money they do have, savings providers are offering an average of just 0.38% interest on charity savings accounts**.
"Due to the effects of the credit crunch and the recession, money is tighter for a lot of people and they are obviously not able to give to charity in the same way they were. It is exactly at these times, when their donation levels take a hit, that charities need to be earning as high an interest as possible on the money they do have," explains David Doulton, director at Fair Investment Company.
Unfortunately, despite being bailed out themselves by the taxpayer, many banks have not been offering charities the same good will. In fact, the average easy access charity saving account offers a pitiful 0.38% interest – this is 0.34% lower than the average personal easy access savings account**.
Notice accounts offer slightly more – an average of 1.10%, while fixed rate charity accounts are paying 1.68% on average. But even compared to personal savings accounts, which pay virtually the same for notice accounts (an average of 1.0%), but almost double for fixed rate accounts – an average of 3.18%** - charities are getting a pretty raw deal.
"Although the figures would suggest there are very few accounts out there for charities, if they know where to look, there are some higher paying accounts on the market," says David.
"Unfortunately, most charities don’t know where to look, which is why we have launched a new comparison service displaying a range of leading savings accounts to help charities get a better rate on their donations.”
Using Fair Investment Company's new charity savings accounts service, charities can find an online comparison of leading accounts including 3 year fixed rate deposit plans with rates of up to 4.0%. There are also one year fixed rate accounts offering rates of up to 2%, 2 year deposit accounts with rates of up to 2.20% and 3 day notice accounts with rates of up to 2.19%.
"Many charities are aware that their current savings solution is less than adequate but don’t know what to do about it – our new service offers rates considerably higher than the average and provides charities with the much needed tools required to help them make more from their money," concludes David.
*UK Giving 2009 Key Findings; donations to charity fell by 11% between April 2008 and March 2009 compared with April 2007 and March 2008 from £11.2billion to £9.9billion
**Source: Moneyfacts 19.04.10