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what interest rate payable on funds held in client account?

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what interest rate payable on funds held in client account?

Postby henryp » Tue Feb 09, 2016 11:14 am

Hello,

I am acting for myself in the sale of a house, and the conveyancer for the purchaser is a legal executive employed by a solicitors' firm. We have used the Law Society's Standard Conditions and so far everything has progressed smoothly. When discussing the details of how we will complete, I reminded the other conveyancer that the monies payable to me on completion will include the entire purchase price (including the deposit which I agreed could be held by him) plus the interest on the deposit. That the interest is payable to me is stated in the contract and is not in dispute.

The other conveyancer has written to me stating a figure for the interest that will be paid, saying it has been calculated by his firm's accounts department. I have calculated an annual rate of interest based on that figure (dividing by the number of days interest will have accrued, multiplying by 366, and assuming interest is compounded annually), and it comes to 0.6%. This presumably is pre-tax, as any tax payable will be payable by me and not by the other conveyancer.

Does 0.6% sound about right?

Thanks in advance!
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Re: what interest rate payable on funds held in client accou

Postby atticus » Tue Feb 09, 2016 11:58 am

what interest rate does the contract specify? These contracts usually state a rate.

We are in an era of low interest rates. Look at what you could get if you put this money in a deposit account with a bank or building society, bearing in mind that the money has not been locked up for an extended fixed term. It is no different for solicitors. Many solicitors' firms get next to nothing in interest on client account balances.
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Re: what interest rate payable on funds held in client accou

Postby dls » Tue Feb 09, 2016 2:36 pm

It is either right or not so far from right as to be worth any dispute.

As has been pointed out this is an account where money must be available to be withdrawn instantly. One per cent or less is probable.
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Re: what interest rate payable on funds held in client accou

Postby blig » Tue Feb 09, 2016 8:07 pm

https://www.bsa.org.uk/statistics/savings and the last link on the page shows savings interest rates; typical in December 2015 was 0.38% for instant access
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