Data analysis from savings app Spring shows that 8.3 million current accounts in the UK contain over £10,000, and four-fifths of those are earning no interest.
Over a million accounts contained balances of over £50,000, the analysis shows.
Derek Sprawling, Spring’s managing director of savings, said that cumulatively, nearly £400bn is held in current account balances in the UK.
“Most people sensibly maintain a small current account balance to cover emergency costs and everyday expenses, but leaving thousands of pounds in your current account means you will be missing out on hundreds of pounds in interest each year.
“With nearly eight million current accounts containing significant balances, that money could work harder in a higher-paying savings account,” he added.
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Interest being lost
At present, the highest paying instant-access savings account pays 4.75% in interest, meaning that a £10,000 balance would pay £475 over a year.
However, if rates drop in coming weeks – as they are expected to – this amount will fall.
Those who are willing to tie up some of their money could earn more.
After raising rates last week, Isbank’s Raisin UK – 6 Month Fixed Term Deposit now pays the joint market-leading rate of 4.4% AER on maturity. Or, for a slightly longer fix, Isbank’s Raisin UK – 9 Month Fixed Term Deposit pays 4.37% AER on maturity. These rates are guaranteed for the duration of the bond.
Those who have not used their full ISA allowance for the year should also consider how to use this to help them save, as any interest over £500 is taxable for higher-rate taxpayers, while basic-rate taxpayers can earn £1,000 in bank interest before paying tax.
