Charities and clubs are getting a raw deal from banks and building societies with many receiving interest as low as 0.1%.

With 188,000 clubs and charities in the UK, many are struggling to find rates of interest more than 1%.

Money Box listener Iris Smith looks after her local Methodist Church Sunday school savings account.

The school's money is with the Nationwide Building Society, in the Treasurer's Trust Account earning just 0.5%. Iris was horrified.

Hopeless search

Iris decided to look around and discovered another account at Nationwide paying better interest.

But Iris was told that she could not move the money because hers was a charity account.

"I do not see why a charity should not have similar rate as an individual", said Iris.

But the Building Societies Act stops groups of people having the same membership rights as individuals.

Charity customers who keep their money with a building society have a difficult choice when it comes to opening other accounts with the same organisation because of rules about member's voting rights.

So Iris and the Sunday school are stuck with 0.5%, which the Nationwide Building Society defends as "a competitive rate".

Better than nothing?

When compared to the high-street banks, 0.5% is high. Natwest pays out just 0.25%, Abbey National will offer 0.2%, while Barclays, Halifax, HSBC and Lloyds TSB give 0.1%.

To get a better rate for a charity or small group, you really need to look beyond the high street.

Yorkshire Building Society pays 3.25%, and Iris and the Sunday School account in the East Midlands could get 2.9% with the Nottingham Building Society.

Charity Finance Director's Group Chief Executive Shirley Scott is not impressed with the rates on the high street, and wants charities to take action.

COIF Charities Deposit Fund is run by charity fund managers CCLA. If your charity does not need a local branch then it is ideal for earning better interest.

They are currently paying 3.75% on deposits of just a pound or more and Mike Goddings at COIF says this rate can be achieved because they are non-profit making.

COIF are regulated by the Financial Services Authority and have 15,000 existing customers in England and Wales.

It is a postal account with no cheque book, but you can make limitless deposits and withdrawals.

Moneyfacts Business Account finder will help you browse through a list of available accounts and compare rates of interest.