Bank of Scotland launches 'no catches' deposit account for SMEs

Bank of Scotland Business Banking has launched a market-leading deposit account for small businesses offering 25bps above base rate (5.64% AER / 5.50% gross p.a.) on balances of £1 and above, a rate that is nearly 40% higher than any deposit product offered by the Big Four banks.

With no catches and no hidden terms and conditions, the Total Business Deposit Account could stand to make small business customers £550 per annum on a balance of £10,000. Put another way, if every small business holding deposits with the Big Four banks were to switch over to the Total Business Deposit Account, an extra £585 million would be added to the bottom line of SME plc every year.

The Total Business Deposit Account is aimed at helping Bank of Scotland Business Banking take a bigger slice of the small business deposit market which is estimated to be worth approximately £45 billion (BBA 2007). It is the latest in a string of market-leading products from Bank of Scotland aimed at shaking up the small business marketplace, following the successful launches of the original Total Business Account – the first current account to pay base rate on balances - and the Business Offset Account – the first offset account for small business.

The Total Business Account, which was launched in October 2007, has already broken the £100 million barrier on deposits and recently received a commendation at the 2008 Business Moneyfacts Awards. The rate of interest on this account has recently been raised to 25bps over base rate (5.64% AER / 5.50% gross p.a.), in line with the Total Business Deposit Account.

Ivan Matviak, Head of Bank of Scotland Business Banking said: "The Total Business Deposit Account is the latest innovation from Bank of Scotland designed to bring consumer pricing to the business banking. With a leading rate of interest and no hidden terms and conditions, this deposit account is finally offering small businesses a deal that they deserve. If every small business owner who banks with the Big Four were to switch over their savings to us, we would see £585 million added to the bottom line of small business every year – a significant sum of additional cash. We believe that this account lays down a challenge to our competitors which they will be hard pushed to match."