Finance News: Foundation launches savings account for smaller charities

Mathew Little

The Charities Aid Foundation is to launch a savings account that aims to offer investment-style returns for small and medium-sized charities.

The CAF Fixed Rate Selector Account, which is available from December, is a fixed-term, fixed-interest account. Voluntary organisations, including mainstream charities, faith groups, hospital trusts, schools, friendly societies, clubs and housing associations can deposit anything between £10,000 and £10m in the account.

Sums must be deposited for an agreed term of three months, six months, one, two or three years. Interest is fixed and is paid out monthly, annually or at the end of the term.

Ron Green, senior manager of CAF's financial services, said that the foundation's non-profit status meant it was able to offer returns to charities they wouldn't otherwise get unless they were large enough to invest on the money markets.

"This is a flexible product which we hope will appeal to charities of all sizes," he said. "By committing their funds to a term that suits them, charities can expect to earn higher interest without the risk to capital associated with bond and equity investments."

The new account will be managed by Birmingham Midshires, a division of Halifax PLC.

The firm's head of savings and investments marketing, Tim Hague, said: "Birmingham Midshires, as a leading partnerships savings provider, is delighted to be working with CAF. This provides a great opportunity for CAF's customers to benefit from attractive rates and peace of mind that their funds are achieving a guaranteed return during a fixed period of time."

Green added that the Selector Account filled a gap between the foundation's existing accounts - its basic bank account and the CAF gold account - and its investment products. The account will be launched at CAF's annual conference tomorrow.

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