InvestEngine is bringing the benefits of exchange traded funds investing to small businesses

InvestEngine is bringing the benefits of ETF (exchange traded funds) investing to small businesses, as latest figures show that billions of pounds of SME funds in UK savings accounts are being hit by hidden penalties that are diminishing their value.

A recent report found that £125 billion of SME savings are sitting in current accounts that are plagued by a hidden ‘SME savings penalty’ that see banks routinely offering large companies higher interest rates on their savings compared to those offered to smaller businesses.

When combined, this penalty costs small businesses more than £7.5 billion a year. Meanwhile, a further £150 billion of SME deposits are in current accounts that accumulate no interest at all.

With the current cost of living crisis having a knock-on impact on small businesses, UK SMEs can’t afford to let their surplus cash lose out on its potential in stagnant and potentially detrimental savings accounts.

To overcome this, business owners can instead invest that money in the stock market via an InvestEngine business account, creating the potential for higher returns than with a traditional savings account where they would likely gain little to no interest.

InvestEngine business accounts invest in ETFs, a basket of securities that trade on an exchange and can contain securities like stocks, bonds and commodities. Investment funds like ETFs are considered a lower-risk investment because of the increased diversification over single-stock investing, by holding multiple stocks or other securities.

This enables more companies in the UK to utilise ETFs and the diversification and reliability they offer as a means of growing their wealth and reaching longer-term financial goals.

Ian Durrell, Compliance and Development Officer at SME Ask the Boss holds an InvestEngine business account. He said: “As a former financial adviser and personal investor, I know that long-term investing can bring numerous benefits, including greater financial resilience and making savings go further.

“With this in mind, having hard earned money sitting in a stagnant savings account and being hit with hidden penalties doesn’t align with how I see my business achieving future success. InvestEngine’s account helps bring the same benefits as personal investing to my own company.”

Individuals can open a business account for their company on a managed or DIY basis from £100. And InvestEngine charges no fees on its DIY portfolio, while it keeps costs low (0.25%) on its managed portfolio – far lower than others on the market.

Andrey Dobrynin, Co-Founder and Managing Director at InvestEngine, said: “Businesses are often sitting on surplus cash that’s earning little to no interest in the bank. What’s more is that the funds sitting in traditional savings accounts are being hit by hidden penalties.

“Our business account offers SMEs a solution. Investing in diversified, low risk securities gives businesses the opportunity for higher returns, avoids the hidden charges, and can help bolster business finances in the long-term.”

You can find out more about InvestEngine’s business account on the 22nd & 23rd of November at the 2023 Business Show at ExCel London.