With the Children in Need coffers brimming full of donations from last week’s campaign and charitable giving still in the air, it may be a good time for charities large and small to review their own banking arrangements.

Research by Business Moneyfacts has found that a massive 46% of 140 investment accounts available to charities offer rates that do not even keep pace with inflation, with rates starting as low as 0.56%.

Lisa Taylor from Business Moneyfacts commented: "Although charities operate on a not-for-profit basis, they share the same financial aims as all other businesses, making it equally important for them to find a business bank that will offer services to meet their unique needs."

"Charitable organisations work extremely hard to raise much necessary funds; it therefore seems insane to allow them to stagnate in a poor interest bearing account. By shopping around they could earn rates well over 4%."

A good return on deposits should be complemented with the possible cost saving of selecting a suitable current account. There are 29 current accounts available to charities; some generic, others specifically designed for non profit-making organisations.

The selection is somewhat less than for their profit-making counterparts, nevertheless some very competitive deals can be found, with nine accounts making no charge for transactions and many others offering selected free transactions.

However, some providers do offer a limited service. A charity seeking an overdraft would for example have its choice reduced to 19 accounts and if it should dare to want a ‘full banking’ service with credit interest, an overdraft, and the capacity to accept standing orders and direct debits, the line up is reduced to 11.

Lisa Taylor continued: "Many financial institutions are proactively seeking business from the expanding charity sector. With high street banks paying such poor rates, shopping around could earn a charity thousands in interest. The not-for-profit banks, such as CAF, are popular alternatives to the traditional big banks, where charities can be assured that any fees incurred or interest forsaken will be reinvested direct into the charity sector."