The Business High Interest Deposit Bond fills a gap in the SME savings portfolio from the major banks, offering a fixed interest rate of 3.25 per cent per annum for deposits of £5,000 and above over a fixed three-month period - one of the best rates of return over this period in the market.
HSBC’s research show that three months is the optimum length of time that small businesses are comfortable making their funds illiquid, and so the bond exploits the greater interest rates available through the money markets over this period.
Simon Wainwright, head of commercial savings, investments and protection at HSBC Bank, said: "Small businesses have surplus funds sitting around like David Blaine, doing very little for them in the short-term. Some of the money is to cover the day-to-day running of the business, but often much of it has been set aside as a kind of float that will be used shortly to offset some future expenditure, be it a tax demand, new plant, wages or whatever it may be.
"Keeping some of this money in an interest-bearing current account is sensible, but it is usually possible to predict when a business will need the bulk of its surplus cash, and with the new HSBC Bond it is now possible to put it to work to earn extra interest."
According to Wainwright, HSBC has made managing the bond easy for customers: "Our research shows that businesses do not want the hassle of actively managing their surplus funds, so we have developed this product to make inertia pay. Surplus funds can now sit in the bond and, when the three months is up, we will contact the customer, and discuss what they want to do going forward. This can include reinvesting straight into another three-month bond if appropriate."
The launch of HSBC Bank’s Business Bond follows the introduction of the new Business Money Manager account in January, offering higher returns, instant access and no charges, and fills a gap in the savings offering to SMEs.
For information on HSBC’s on Business High Interest Deposit Bond, visit a local branch, telephone 08457 40 41 42, or visit www.ukbusiness.hsbc.com.
