Concerns raised over low savings rates on charity accounts

Savings providers are offering an average of just 0.38 per cent interest on charity accounts, it has been reported.

According to the Fair Investment Company, these low returns have contributed to an 11 per cent fall in charitable donations over the last year – equivalent to £1.3 billion.

This average rate of interest is reported to be 0.34 per cent lower than the average personal easy access savings account.

David Doulton, director at the firm, said that due to the effects of the credit crunch and the recession, money is tighter for a lot of people.

"They are obviously not able to give to charity in the same way they were," he stated.

"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."

Since March 2009, the Bank of England has kept its base rate –upon which savings interest rates are based – at a historic low of 0.5 per cent in an attempt to encourage consumer spending.

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2010-04-21 13:53:35 © Moneyextra.com