The idea
Charities are told that Banks are restricted by regulations in regard to the type of deposit accounts they may offer, and therefore the rate of interest they provide. These 'regulations' should be made less rigid and more flexible, so that charities may earn a reasonable rate of return. The rates offered by the Banks in no way reflect the returns the banks themselves earn by using the depositors monies.
Why is it important?
Currently our charity is offered 0.05% on our standard deposit account. After much pressure from us, we were offered a rolling bond offering 0.5% (10 times greater!!) However, this only matches Bank of England base rate and is far less than inflation. As a bank customer, I could sign up for an 'on-line' internet account giving at least 5% (100 times greater than the standard rate offered to charities!!) Since most charities operate in fields of activity that benefit the general population, they incidentally save the Government having to supply support services in their place.