Sector 'losing £400m a year' in banks

Charities could be wasting up to £400m a year by keeping their cash in high street bank accounts, a charity fund manager has warned.

James Bevan, chief investment officer at CCLA, told Third Sector that trustees should be holding accounts with organisations such as the Charities Aid Foundation's CAF Bank, which offer same-day access to money, but pay better rates than high street branches.

He said that, according to recent data, charities had about £30bn of cash in the system, and £20bn of it was not getting the best return.

"If that money is getting 2 per cent less each year than it should, that's £400m a year the sector is losing," Bevan said. "Charity trustees think high street banks are sensible places to keep money, but they aren't. High street banks aren't interested in charities because they can't make any money out of them. Banks want people buying mortgages and taking out credit cards.

"If they hold a high street bank account, charities are paying for services that they don't need."

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