Forgotten cash: over £1bn sitting in unused ‘zombie’ current accounts
Just over a third of Brits have multiple accounts, yet almost half say they only use one on a day-to-day basis, a study by Comparethemarket found.
With 49 million people using current accounts in the UK, this means around eight million accounts are sitting unused. With each account holding an average of £141, according to the comparison site, this equates to £1.2bn across the UK.
Jody Coughlan, head of money at Comparethemarket, said: “It is concerning to see how many people have over £100 sitting in these unused zombie accounts. While it is a good idea to have a ‘rainy day fund’ set aside in case of emergencies, the fact that so many people don’t regularly check their additional accounts is a risky move to take.”
Out of those who have more than one current account, almost one in ten admit they check their unused account as little as twice a year.
But there are good reasons to keep track of your supplementary accounts.
The first is security. Separate research by the comparison site found one in ten people have been a victim of a cyber-attack on their credit or debit card.
“Unused accounts are easy targets for hackers who might be able to steal hundreds of pounds without it being detected,” said Coughlan.
The second reason is securing the best interest rate. With rates on savings products at record lows, many savers have turned to high interest paying current accounts. While these products haven’t been immune to cuts, some are still offering attractive rates (see table below).
According to the Comparethemarket survey, 56% of respondents did not know if their bank had cut interest rates in the past year and 58% didn’t know the interest rate on their current account.
The third reason is recurring direct debits from forgotten accounts can cause customers to unknowingly go into their overdraft and incur hefty fines.
Research published last week by consumer group Which? revealed unarranged overdraft fees from some major banks can be more expensive than taking out a payday loan.