I am the Secretary and newly appointed Treasurer of an Association and would like to do something more productive with our reserves.
We have a separate Barclays current account for receipt of leaseholders service charges and payment of monthly invoices such as garden contractor invoices. We also have a Barclays Business Saver account for our reserves which pays 0.05% interest.
I have read all the information I can find on your site and other sites that you recommend and apart from contacting all banks and building societies to ask what their best deal is, if indeed they have one for Residents’ Associations, is there anything that you are able to suggest that might point me in the right direction? We have approximately £5k to invest.
The FPRA responds:
My answer would be that money held in reserve cannot strictly be invested, to obtain the best interest rates, as it is money held in trust and not to be speculated on with different banks rates. This could lead to disputes between leaseholders who could find better rates, hence my advice is to hold such amount in a basic deposit account that can be operation at any point when funds are needed. Interest rates in an event for such amounts are not large at present anyway.