Cornwall Council is offering town and parish councils in Cornwall the chance to gain a higher return on their money by depositing it with the unitary authority rather than putting into a high street bank.

Over the past few months the Council has been working with local councils to draw up a scheme which will enable them to deposit cash with the authority and gain a higher rate of interest than they would get by depositing it with mainstream banks.

So far two town councils - St Austell and Launceston – have signed up to the new scheme, with more expected to follow suit in the coming weeks and months.

Welcoming the new scheme Alex Folkes, the council’s cabinet member for finance and resources, said “Cornwall Council can attract a better rate of return from financial institutions due to its size and high credit rating. This scheme means that town and parish councils will now be able to benefit from this opportunity. This is another example of Cornwall Council doing what we can to help town and parish councils."

Under the scheme local councils can deposit between £25,000 and £1m with the Council. There is no time limit and the councils will be able to access their money at any time. An interest rate equivalent to Cornwall Council’s average return will then be added to their monthly balance.

“Currently local councils receive their precept payment in two instalments, with the money then being used by them over the coming months” said Alex Folkes.

“This scheme will enable them to put their precept or any other monies that are not immediately needed with us and earn better interest rates.”