As part of carrying out your instructions to us, we may need to hold your money in our client accounts. In holding client money, we have an obligation to pay interest on that money at a fair and reasonable rate and are required to put in place an interest policy.
This policy sets out the guidelines for when interest will be paid.
We aim to account to you for interest at a reasonable rate of interest. However, as the holding of your funds is incidental to the carrying out of your legal instructions, the rate is unlikely to be as high as the rate you may be able to obtain if you were to deposit the in to an account of your own choosing.
We must ensure that money held in our client accounts are immediately available and therefore all client monies are held ininstant access accounts that allow us to make immediate withdrawals. We take this into account when we set the interest rate which we pay on client monies.
Unless you are informed otherwise, your money will be held in one of our general client accounts. If your monies are held outside of these accounts, the interest rate applied will fall out of the scope of this policy.
The interest rate which we pay on monies held on general client accounts is the interest rate which the Royal Bank of Scotland (being the firm’s main bank) offers on balances under £999,999.00 on its instant access business savings account. We have chosen this rate as the balances of the vast majority of client monies we hold are significantly lower than this amount.
We review this rate on a monthly basis and will update the rate if the rate has changed. The relevant interest rate can be obtained at your request.
Interest will be calculated from the time the funds become cleared for interest purposes. This is as follows:
- For cheques or banker’s drafts, 7 working days after the cheque or draft has been deposited with our bank.
- For amounts received by debit or credit card, from the date of the actual receipt. This is usually 3 days after the transaction has been authorised.
- For direct transfers or same day payments, the day after receipt.
Interest will be calculated on a daily basis and calculated on the amount held overnight from the day on which the funds became cleared for interest purposes as set out above.
Interest will not be paid if the total amount of interest calculated for the period that we held the cleared funds is less than £50.
We reserve the right to charge negative interest if the Bank of England base rate was to fall below 0.01%. We would absorb any cost less than £50. However any charge above this would be re-charged onto you.
Interest will be calculated either quarterly, at the conclusion of the legal transaction or when your file is closed and will be credited to the client ledger. We will contact you to pay any interest due to you or you can choose to donate it to St Michael’s Hospice.
Any interest paid to you is paid without any deduction for income tax. As such it is your responsibility to inform HM Revenue & Customs of amounts of interest received from us, and the implications of this will depend upon your own financial circumstances.
Last reviewed – 13 January 2025