In the charity sector, every pound is mission-critical. Yet, many charities still leave substantial sums sitting in low-interest bank accounts, doing little more than gathering dust.

Despite cuts in the base rate over the last year, interest rates continue to offer better rates than they have in years. It’s time to “get up off your asset” and take a closer look at how cash deposits can work harder for your organisation. 

Cash reserves shouldn’t be lazy 

Charities often build up reserves for sensible reasons – stability, emergencies, or future projects. But keeping all of it in a current account or a near-zero interest deposit means missing out on easy, low-risk returns.

Even modest changes in deposit strategy can generate meaningful income, all without asking donors for another penny. 

Low risk, high value 

Maximising interest doesn’t mean taking undue risk. Many options – such as notice accounts, fixed-term deposits, or diversified treasury solutions (money market funds, gilts, low-risk multi-asset funds etc) offer enhanced returns while still aligning with a low-risk appetite.

Finance teams can segment cash based on time and knowing what’s on the horizon: keep what’s needed for the short term easily accessible, and place the rest in higher-yielding instruments. 

Inflation is the silent eroder 

Inflation erodes the value of static funds. A charity that leaves £1m in a 0.1% account while inflation runs at 3% is losing real value year after year.

Strategic cash management helps preserve purchasing power, ensuring your reserves can still deliver impact in the future. 

A simple way to unlock unrestricted income 

Interest earned on deposits is typically unrestricted income – a valuable asset for any charity navigating funding pressures or aiming to cover overheads.

It’s one of the few areas where you can grow funds without additional fundraising efforts or programme trade-offs. 

Responsible stewardship starts with financial awareness 

Donors, regulators, and trustees expect sound financial management. Regularly reviewing banking arrangements and interest rates is a fundamental part of good governance.

Charities should treat their cash as an active resource – not just a safety net. 

It’s time to get proactive

Charities should consider taking a few next steps:

• Review your current banking arrangements and interest rates. 
• Develop or refresh your reserves policy, including segmentation by liquidity needs. 
• Explore ethical or socially responsible deposit options that align with your values. 
• Set a calendar reminder for regular treasury reviews – rates change, and so should your strategy.  

“Getting up off your asset” means recognising that your cash has power – if you let it. 

With the right strategy, charities can unlock additional income, protect their reserves, and strengthen their ability to deliver on mission. It's not just a financial decision—it's a leadership one.