To think keeping large amounts (e.g. £20k+) in a current account isn’t the best use of money?

[ThatHeartyGreenExpert]

Having something like £27k sitting in a current account doesn’t seem like the best use of money to me, given it’s usually earning little to no interest. I understand needing easy access to cash but beyond a certain point it feels inefficient compared to putting at least some of it into savings or other options.

AIBU? Surely there can’t be any good reason for people to keep that much in a current account?

I keep roughly my monthly spend in my current account. Everything else is in a savings account.

Unless the person is a high spender, they don’t need it all in a current account. It’s also more at risk of fraud there.

Agreed. I keep one month in the current account, and transfer over from my instant access account each month. I have a separate debit card with a couple of hundred available for cash. I almost never have a completely unexpected expense that cannot be covered by transfer.

Who is keeping 20k in a current account? Surely nobody does this unless mega wealthy.

Obviously

Of course it’s ridiculous unless it’s a current account that pays interest.

I do have about that much in an easy access saver, but it is earning some interest and will be needed within the next 12 months

I think more people do than you’d expect, often just because it’s easy, they haven’t got round to moving it or they want everything in one place.

Well it depends on your fixed costs. 15k goes out of my account every month without me doing anything so 27k doesn’t feel excessive! It’s all relative.

Why do you need to know @ThatHeartyGreenExpert.

Well, yeah. Anyone keeping more money than they need in an account that doesn't earn interest is being daft.

I don't have anything like that kind of money but I am thinking about putting a bit ( about £2000 ) into a savers account or fixed/ flexible isa but tbh everytime I look into it , it completely befuddleds me

YABU to ask because it’s patently obvious and not something many people are doing?

Obviously and any bank account, will have an appropriate easy access deposit account you can run alongside and make easy transfers as required.
Everyone should also try to use at least part of their ISA allowance as maintaining a tax free status for life on a sum of money is not to be sniffed at.

You can get around 2.5% in an instant access savings account which would be about £500 a year on. If you were prepared to lock it away for 6 months you get around 4%. so that's around £800 a year. And tax free if you have no other savings.and are a basic rate tax payer. Now every bank has an app, so easy to sweep it from one account to another. Easiest money you'll ever make

On what?

Many people have low financial literacy as this is not taught in schools.

A lot of older people as well are not aware or mistrustful of other options.

My dad has dementia and we recently had to get a joint account when he became unable to manage his bills. I discovered he had a large amount in his building society account making absolutely pitiful interest.

He had held the same account since the 1970s and until last year was getting the bus into town to withdraw cash with a passbook. They wouldn't even give him a fecking debit card!

I actually think banks and building societies should proactively reach out to people sitting with large amounts of cash in their daily account and let them know about other options, but they don't because it suits them to lend out the money for profit whilst paying the customer 0.2% interest.

What kind of amount do you start with to get them returns?

High interest easy access savings. I keep £150 in my current account. If I need to buy anything and its running low I go on the app, transfer some funds.

for 27k, they could be earning about £3 a day on Trading 212 which is paying 4.31%.

My ISA’s and premium bonds are maxed out. I don’t get a personal savings allowance so anything else I save, half the interest goes to HMRC. I don’t spend lots of time searching for the best savings account rates, to give Rachel Reeves half the interest I could earn, if I did.

mortgages, council tax and utility bills, but we have a few properties.

If you wish to avoid filling in a tax return you might prefer not to have savings interest which uses up any tax allowance you are entitled to, which you might be using for something else.

I always wonder about people like the OP having these random and rather pointless thoughts running round their heads.
It's nobody's business how anyone else runs their finances. It just isn't.
I suspect this is about someone you know - someone you're trying to boss around because you don't approve. Leave them alone.

£20k - but you can invest less.

Agree. I would not do it. I generally keep enough to cover expenditure plus a small buffer. The rest goes into savings.

20k

This is my mum. As she's gotten older, she's become very reluctant to engage with anything outside of her comfort zone.

She has tonnes in her current account - like over £50K. Her outgoings (absolutely tiny) are far, far below her income (state pension and very small workplace pension). So her money just keeps accumulating. But she doesn't move it out of her current account.

She has complex health issues so can't get to a bank in-person to sort things out.
She doesn't like people coming to her house so won't have a financial adviser in to help her out.
She can't use the internet so can't easily move her money around herself.
She flatly refuses to call NS&I to just stick it in Premium Bonds.

She says "anything to do with money gives me a headache" and that's that - it just keeps inefficiently piling up in her current account. Ridiculous.