As interest rates continue to be in the forefront of the news,
as the Bank of England, Monetary Policy Committee (MPC) raised
rates again in August for the 14th time in a row, now standing at
the highest they have been since 2008. Now is a good time to review
interest policies and review the basis for calculating the rate
interest to ensure it is still appropriate.
The Solicitors Regulation Authority (SRA) requires law firms to
pay clients a fair rate of interest for any client money held. In
practice there are three methods of holding client funds:
- Designated deposit accounts
- Undesignated client accounts
- Virtual client accounts
The most popular way of holding client monies is the
undesignated client account, usually referred to as general client
account. Operating a general client account avoids lost time due to
opening and closing of multiple designated deposit accounts and
also by pooling the funds, the higher balance tends to attract a
higher level
