Britons are missing out on millions of pounds in interest each year because they have a collective £13.6 billion lying dormant in current accounts, Sainsbury’s Bank has found.
Despite the low interest rate that current accounts offer compared to savings accounts, Sainsbury’s research has discovered that up to 19 million adults in the UK have excess money sitting in current accounts that pay just 0.1% interest.
The research suggests that there are 2.87 million people with fee-free current accounts at one of the four main UK banks which regularly have £501 to £1,000 sitting in them at the end of the month.
If moved to a savings account that offers a higher rate of interest, instead of the minimal one offered by current accounts, this idle cash could be earning a potential £801 million each year. A person with £1,500 in their account could earn £88.50 more a year.
It was also found that more than 500,000 people have surplus balances of at least £5,000 at the end of each month, which could be earning them more than £295 a year in a high interest account.
Sainsbury’s Head of Savings, Peter Wood, urges people to move their money to a more fruitful account and reap the benefits. “Our research indicates that there are millions of people who could be making their money work harder for them”, he said.
“Obviously it is sensible to keep a surplus amount in your current account to ensure you don’t go overdrawn but many people have significant sums that they are not drawing upon. This money could be transferred to a high interest, easy access savings account or high paying current account that could earn them considerably more interest.”
Find out more about Sainsbury’s Savings Accounts