One in three have £5k sitting in current accounts earning zero interest - could this app be the solution?

EXCLUSIVE One in three have £5k sitting in current accounts earning zero interest - could this app be the solution? £526m is sitting in current accounts earning no interest By HELEN KIRRANE Updated: 00:01, 30 April 2025 e-mail View comments Products featured in this article are independently selected by This is Money's specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence.

A staggering £526billion is estimated to be sitting idle in current accounts earning no interest, data shows. It means some 29million people miss out on £20billion annually in interest by leaving money languishing in current accounts and not moving it to high-interest savings accounts, research from Paragon Bank reveals. Around half of those keeping money in current accounts paying no interest could move their money into a higher interest savings account, but choose not to.



One in three people have £5,000 sitting in their current account, while the average current account balance is £2,067. The research comes as Paragon Bank launches a new savings app called Spring which aims to help savers kick savings apathy to the kerb and get better returns on their savings. Rock bottom: £526billion is estimated to be wasting away in current accounts earning no interest Why do so many keep money in current accounts? Meagre savings rates from big banks plays a part in the lack of enthusiasm around saving.

Though the average easy-access account pays 2.78 per cent, according to rates scrutineers Moneyfacts Compare, the average interest rate offered on pure easy access accounts by the big five high street banks is just 1.25 per cent.

Derek Sprawling, of Paragon Bank, says: 'High street banks are offering little to no interest on savings while making it unnecessarily difficult to access better alternatives, resulting in the rise of "current account coasters".' But there is more than just poor savings rates at play here, apathy from savers is perhaps a more fundamental problem when it comes to taking charge of savings and actively seeing the best account for them so they grow as much as possible. One in ten people say they keep money in their current account because they haven't got round to moving it to a higher paying savings account, while 11 per cent said there's no particular reason they haven't moved it to a high-interest savings account, according to Paragon.

But just over a fifth of people say they are keeping money in their current accounts as a rainy-day fund. Savers would stand to make £243 interest if they kept £5,000 in the best easy-access account paying 4.76 per cent.

While the average current account balance of £2,067 would grow to £175.56 if kept in the best easy-access account. Read More Best easy access savings rates 2025 How does Spring plan on changing this? Paragon Bank has launched an app-based savings account called Spring which offers an easy-access account paying 4.

3 per cent. Unlike Paragon Bank's flagship easy-access accounts which are managed by desktop and post, to use Spring's savings account savers must download the app. It is therefore targeting a younger audience.

Paragon research found that those between the ages of 18 and 24 are most likely to keep money in their current accounts. At 4.3 per cent, the rate Spring offers is lower than the best easy-access accounts , which pay upwards of 4.

5 per cent so savers will find better deals with the likes of Chip's easy-access deal* , which is paying 4.76 per cent and Atom's Instant Saver Reward which is paying 4.76 per cent.

Spring's main appeal is that customers don't have to navigate out of the app to their banking apps to put money in the accounts. They can do this within Spring's app. It uses open banking technology to link it directly with current accounts making it easier for savers to move money from their current account to the easy-access account without hassle.

On a £10,000 deposit a saver could earn £430 of interest over a 12 month period, if the rate remains unchanged. Unlike some of the top accounts, withdrawals are unlimited so the rate will not drop if savers withdraw their money. Savers getting the top rates will have to tread carefully if they intend to dip in and out of their savings on a regular basis.

If someone makes four or more withdrawals from Chip's easy-access account* within 12 months they will find their rate is reduced to 3.75 per cent. There is a similar catch on Atom's Instant Saver Reward account.

Anyone who doesn't withdraw earns 4.75 per cent, but make one withdrawal and the rate falls to 3 per cent for that given month. Money held in the Spring easy-access account is fully protected under the Financial Services Compensation Scheme.

The money is held with Paragon Bank, as it is a licenced bank, and used to fund its lending activities. But bear in mind that if a customer is both a Spring and a Paragon customer, the FSCS limit of £85,000 applies across both accounts, so they will get one £85,000 limit, not two lots of £85,000 protection. Spring has 24/7 customer service and their customer service team is based in the UK should customers need any help.

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