One in three keep most of their money in current accounts - despite far better savings rates on offer

One in three keep most of their money in current accounts - despite far better savings rates on offer High street big bank's average flexible easy-access rate is just 1.64% By Helen Kirrane Updated: 00:01 BST, 10 September 2024 e-mail View comments Millions of savers are missing out on earning interest on their savings by keeping them stashed in current accounts, new data shows. Three in ten savers hold most of their savings in their current account, new research from the Building Societies Association reveals.

Holding savings in a bank account is bad news for most savers, as they will either earn very low or no interest on their savings. In July, there was £248.9billion stashed away in accounts paying no interest, Bank of England data shows.



Missing out: One in three savers keeps their savings stashed with their current account provider Even savers who stow away savings in their bank's most basic easy-access savings accounts will only earn a paltry return of less than 2 per cent. On £10,000 of savings, figures from rates monitor Moneyfacts Compare show five of the UK's biggest banks' flexible easy-access accounts pay an average interest rate of just 1.64 per cent, lagging behind the market average for an easy-access account by 1.

44 percentage points. The average easy-access account pays a rate of 3.08 per cent according to Moneyfacts Compare.

Lloyds Bank's Easy Saver is the poorest performer, adding a mere 1.3 per cent to money savers tuck away in its easy-access deal, or £1.30 for every £100 saved.

RELATED ARTICLES Previous 1 Next Trading 212 cuts its Isa to 5% but it's still the best buy...

NS&I can't find the account I opened for my goddaughter 18...

Visa launches new account-to-account payments service and...

Five best cash Isas 2024: Top fixed-rate and easy-access...

Share this article Share HOW THIS IS MONEY CAN HELP Best easy access savings rates 2024 HSBC's flexible saver pays 1.98 per cent, while Santander's Easy-Access Saver pays 1.7 per cent.

Barclays' Everyday Saver pays 1.65 per cent and NatWest's Flexible saver pays 1.59 per cent.

Keeping £10,000 in one of these high street bank savings accounts would earn around £165 in interest over a year, according to This is Money's savings calculator. By comparison, a saver keeping £10,000 in a top easy-access account paying 4.76 per cent would earn around £487 in interest over a year.

That's an interest gap of £322 and it serves as harsh reminder to savers that loyalty doesn't always pay when it comes to where you keep your savings. Read More Best easy access savings rates 2024 The younger a saver is, the more likely they are to hold their savings in their current account, according to the BSA. Two in five savers between the age of 18 and 34 hold most of their savings in their bank account.

But this drops to 28 per cent of 35 to 54 year old savers and 16 per cent of savers aged 55 and over. One in six people, amounting to nine million, don't have a single savings account, according to savings platform Flagstone. At a time when savings rates are becoming less attractive than they used to be, due to falling interest rates, finding the best savings accounts to make your money work harder is more important than ever.

> Best savings rates: See This is Money's best buy savings tables Rachel Springall, finance expert at Moneyfacts Compare said: 'The big banks' most flexible accounts pay an average rate of 1.64 per cent gross between them, which is significantly lower than the market average rate of 3.08 per cent gross, based on a £10,000 deposit.

'This clearly demonstrates why savers need to look beyond the most familiar brands, as their loyalty is not being repaid. It is vital consumers regularly review and switch their easy access account to ensure they are earning a decent return.' SAVE MONEY, MAKE MONEY Investing boost Investing boost 5.

09% on cash for Isa investors Learn More Learn More Cash Isa at 4.92% Cash Isa at 4.92% Includes 0.

88% bonus for one year Learn More Learn More Free share offer Free share offer No account fee and free share dealing Learn More Learn More 4.84% cash Isa 4.84% cash Isa Flexible Isa that now accepts transfers Learn More Learn More Dealing fee refund Dealing fee refund Get £200 back in trading fees Learn More Learn More Affiliate links: If you take out a product This is Money may earn a commission.

These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence. Share or comment on this article: One in three keep most of their money in current accounts - despite far better savings rates on offer e-mail Add comment Some links in this article may be affiliate links.

If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products.

We do not allow any commercial relationship to affect our editorial independence..