A warning has been issued to millions of people with certain current accounts. New research shows that there are around 6.4 million current accounts with £10,000 in which are earning no interest.
According to new analysis from Spring Savings, there are 323,000 accounts which have £100,000. As a result, millions of people are keeping their money in accounts with no interest. A current account should ideally have around £1000 in, say personal finance experts.
Any more money than this should be kept in an easy-access savings account, or ISA, which can be accessible if you need it.
Andrew Hagger, founder of personal finance website MoneyComms says: “If you’ve always got a few thousand sitting in your bank once your bills have been paid, you would be better off by switching some into an easy access savings account.”
You should not keep too much money in a current account as current accounts do not usually earn any interest.
With inflation now at 3.6%, your money is being eroded if you’re not keeping it in the right account. Making sure your savings are in the right place is crucial.
If you have £10,000 or more in savings, a current account is not the right place to store it.
Instead, you should transfer your money into an easy-access savings account.
Make sure to look into the rate or your account and make sure that you can access your money as many times as you’d like to without penalties.
By making this small change, you can help your savings grow and feel assured that your cash is not losing value.
Money Saving Expert says there are two main options which include either the easy-access savings account or easy access-ISAs.
An easy-access savings account is the foundation of traditional savings while an easy-access ISA allows any interest you earn to be tax-free.
