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Scottish Sun
07-07-2025
- Business
- Scottish Sun
Warning for 31million bank customers losing more than £350 a year for leaving cash in zombie accounts
We've explained how to find the top rates CASH BLOW Warning for 31million bank customers losing more than £350 a year for leaving cash in zombie accounts Click to share on X/Twitter (Opens in new window) Click to share on Facebook (Opens in new window) MILLIONS of Brits are losing out on hundreds of pounds each by keeping their savings in low-interest "zombie" accounts. More than 31million bank customers have £186billion in savings accounts earning just 1.5% interest, according to Paragon Bank's app Spring. Sign up for Scottish Sun newsletter Sign up 1 To help you get the best returns, we've listed the top savings rates below These accounts generate £2.3billion a year in interest, but savers could earn over three times more by switching to accounts offering up to 5% interest, The Sun can reveal. The average bank customer has around £10,000 in savings, according to Raisin. If that £10,000 is kept in an easy access account earning 1.5% interest, it would generate just £150 in interest each year. But switching to Chase's 5% easy access account would boost that to £500, earning you an extra £350. Experts specifically warn that using savings linked to current accounts often means low rates, restrictions, and losing value to inflation. Derek Sprawling, managing director of Spring, said: "Too many savers are leaving their money with their current account provider's linked savings accounts. "Simply sticking with a savings account offered by their current account provider often means an array of restrictions, such as tiered rates or withdrawal limits, on top of poor rates. "There are other options for savers, it is possible to get a rewarding rate of return without sacrificing access to their money or wading through a host of restrictive terms and conditions." If your savings account pays less than the current inflation rate of 3.4%, it's time to look for a better deal. Plus, the Bank of England is expected to cut its base rate soon, which could make savings rates even lower. The base rate affects how much banks pay savers - when it drops, interest on savings usually goes down too. Financial markets expect the Bank to reduce rates at its next meeting in August, and again to 3.75% before the end of the year. How this affects your savings depends on the type of account you have. Fixed-rate accounts won't change, but easy-access accounts can see their rates drop at any time. What types of savings accounts are available? THERE are four types of savings accounts: fixed, notice, easy access, and regular savers. Separately, there are ISAs or individual savings accounts which allow individuals to save up to £20,000 a year tax-free. But we've rounded up the main types of conventional savings accounts below. FIXED-RATE A fixed-rate savings account or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term. This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account. Some providers give the option to withdraw, but it comes with a hefty fee. NOTICE Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash. These accounts don't lock your cash away for as long as a typical fixed bond account. You'll need to give advance notice to your bank - up to 180 days in some cases - before you can make a withdrawal or you'll lose the interest. EASY-ACCESS An easy-access account does what it says on the tin and usually allows unlimited cash withdrawals. These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee. REGULAR SAVER These accounts pay some of the best returns as long as you pay in a set amount each month. You'll usually need to hold a current account with providers to access the best rates. However, if you have a lot of money to save, these accounts often come with monthly deposit limits. To help you get the best returns, we've listed the top savings rates for each account type below. What's on offer? If you're looking for a savings account without withdrawal limitations, then you'll want to opt for an easy-access saver. These do what they say on the tin and usually allow for unlimited cash withdrawals. The best easy access savings account available is from Atom Bank, which pays 5% - and you only need to pay a minimum of £1 to set it up. This means that if you were to save £1,000 in this account, you would earn £50 a year in interest. However, this rate is only for new customers and includes a 2.25% bonus for the first 12 months. Meanwhile, Snoop's easy access saver offers customers 4.6% back on savings worth £1 or more. If you're okay with being less flexible about withdrawals, a top notice account could be a great option. These accounts offer better rates than easy-access accounts but still let you access your money more flexibly than a a fixed-bond. Plum's 95-day notice account offers savers 4.84% back with a minimum £1 deposit, for example. This means that if you were to save £1,000 in this account, you would earn £48.40 a year in interest. Oxbury Bank's 120-day notice account offers 4.6%, requiring a minimum deposit of £1,000. If you want to lock your money away and keep the same savings rate for a set time, a fixed bond is a good choice. The best fixed rate currently offered is GB Bank's one-year fixed bond, which pays 4.58%, requiring a minimum deposit of £1,000. Meanwhile, Marcus by Goldman Sachs's one-year fixed bond offers 4.55% back on a deposit of £1 or more. This means that if you were to save £1,000 in this account, you would earn £45.50 a year in interest. If you want to build a habit of saving a set amount of money each month, a regular savings account could pay you dividends. Principality Building Society's Six Month Regular Saver offers 7.5% interest on savings. It allows customers to save between £1 and £200 a month. Save in the maximum, and you'll earn 25.81 in interest. While regular savings accounts look attractive due to the high interest rates on offer, they are not right for all savers. You can't use a regular savings account to earn interest on a lump sum. The amount you can save into the account each month will be limited, typically to somewhere between £200 and £500. Therefore, if you have more to save, it would be wise to consider one of the other accounts mentioned above.
The Sun
07-07-2025
- Business
- The Sun
Warning for 31million bank customers losing more than £350 a year for leaving cash in zombie accounts
MILLIONS of Brits are losing out on hundreds of pounds each by keeping their savings in low-interest "zombie" accounts. More than 31million bank customers have £186billion in savings accounts earning just 1.5% interest, according to Paragon Bank's app Spring. 1 These accounts generate £2.3billion a year in interest, but savers could earn over three times more by switching to accounts offering up to 5% interest, The Sun can reveal. The average bank customer has around £10,000 in savings, according to Raisin. If that £10,000 is kept in an easy access account earning 1.5% interest, it would generate just £150 in interest each year. But switching to Chase's 5% easy access account would boost that to £500, earning you an extra £350. Experts specifically warn that using savings linked to current accounts often means low rates, restrictions, and losing value to inflation. Derek Sprawling, managing director of Spring, said: "Too many savers are leaving their money with their current account provider's linked savings accounts. "Simply sticking with a savings account offered by their current account provider often means an array of restrictions, such as tiered rates or withdrawal limits, on top of poor rates. "There are other options for savers, it is possible to get a rewarding rate of return without sacrificing access to their money or wading through a host of restrictive terms and conditions." If your savings account pays less than the current inflation rate of 3.4%, it's time to look for a better deal. Plus, the Bank of England is expected to cut its base rate soon, which could make savings rates even lower. The base rate affects how much banks pay savers - when it drops, interest on savings usually goes down too. Financial markets expect the Bank to reduce rates at its next meeting in August, and again to 3.75% before the end of the year. How this affects your savings depends on the type of account you have. Fixed-rate accounts won't change, but easy-access accounts can see their rates drop at any time. What types of savings accounts are available? THERE are four types of savings accounts: fixed, notice, easy access, and regular savers. Separately, there are ISAs or individual savings accounts which allow individuals to save up to £20,000 a year tax-free. But we've rounded up the main types of conventional savings accounts below. FIXED-RATE A fixed-rate savings account or fixed-rate bond offers some of the highest interest rates but comes at the cost of being unable to withdraw your cash within the agreed term. This means that your money is locked in, so even if interest rates increase you are unable to move your money and switch to a better account. Some providers give the option to withdraw, but it comes with a hefty fee. NOTICE Notice accounts offer slightly lower rates in exchange for more flexibility when accessing your cash. These accounts don't lock your cash away for as long as a typical fixed bond account. You'll need to give advance notice to your bank - up to 180 days in some cases - before you can make a withdrawal or you'll lose the interest. EASY-ACCESS An easy-access account does what it says on the tin and usually allows unlimited cash withdrawals. These accounts tend to offer lower returns, but they are a good option if you want the freedom to move your money without being charged a penalty fee. REGULAR SAVER These accounts pay some of the best returns as long as you pay in a set amount each month. You'll usually need to hold a current account with providers to access the best rates. However, if you have a lot of money to save, these accounts often come with monthly deposit limits. To help you get the best returns, we've listed the top savings rates for each account type below. What's on offer? If you're looking for a savings account without withdrawal limitations, then you'll want to opt for an easy-access saver. These do what they say on the tin and usually allow for unlimited cash withdrawals. The best easy access savings account available is from Atom Bank, which pays 5% - and you only need to pay a minimum of £1 to set it up. This means that if you were to save £1,000 in this account, you would earn £50 a year in interest. However, this rate is only for new customers and includes a 2.25% bonus for the first 12 months. Meanwhile, Snoop's easy access saver offers customers 4.6% back on savings worth £1 or more. If you're okay with being less flexible about withdrawals, a top notice account could be a great option. These accounts offer better rates than easy-access accounts but still let you access your money more flexibly than a a fixed-bond. Plum's 95-day notice account offers savers 4.84% back with a minimum £1 deposit, for example. This means that if you were to save £1,000 in this account, you would earn £48.40 a year in interest. Oxbury Bank's 120-day notice account offers 4.6%, requiring a minimum deposit of £1,000. If you want to lock your money away and keep the same savings rate for a set time, a fixed bond is a good choice. The best fixed rate currently offered is GB Bank's one-year fixed bond, which pays 4.58%, requiring a minimum deposit of £1,000. Meanwhile, Marcus by Goldman Sachs's one-year fixed bond offers 4.55% back on a deposit of £1 or more. This means that if you were to save £1,000 in this account, you would earn £45.50 a year in interest. If you want to build a habit of saving a set amount of money each month, a regular savings account could pay you dividends. Principality Building Society's Six Month Regular Saver offers 7.5% interest on savings. It allows customers to save between £1 and £200 a month. Save in the maximum, and you'll earn 25.81 in interest. While regular savings accounts look attractive due to the high interest rates on offer, they are not right for all savers. You can't use a regular savings account to earn interest on a lump sum. The amount you can save into the account each month will be limited, typically to somewhere between £200 and £500. Therefore, if you have more to save, it would be wise to consider one of the other accounts mentioned above. How can I find the best savings rates? WITH your current savings rates in mind, don't waste time looking at individual banking sites to compare rates - it'll take you an eternity. Research price comparison websites such as Compare the Market, and MoneySupermarket. These will help you save you time and show you the best rates available. They also let you tailor your searches to an account type that suits you. As a benchmark, you'll want to consider any account that currently pays more interest than the current level of inflation - 3.4%. It's always wise to have some money stashed inside an easy-access savings account to ensure you have quick access to cash to deal with any emergencies like a boiler repair, for example. If you're saving for a long-term goal, then consider locking some of your savings inside a fixed bond, as these usually come with the highest savings rates.
Daily Mail
17-06-2025
- Business
- Daily Mail
Millions of fixed-rate savings deals to mature within three months triggering a wave of tax bills
A large chunk of Britons could face a tax bill on their savings interest in the coming months, analysis shows. Some 1.2million fixed-rate bonds are set to mature between June and September 2025 containing £70.5billion, according to Paragon Bank. Seven in 10 accounts set to mature will generate enough interest to potentially incur a tax bill, the data suggests. Of the 1.2million accounts, almost all will generate interest of more than £500. This would breach the Personal Savings Allowance (PSA) of £500 for higher-rate taxpayers. Meanwhile 822,000 accounts will generate more than £1,000 in interest, resulting in a tax liability for basic-rate taxpayers who have a PSA of £1,000. Under the PSA, basic rate taxpayers can earn up to £1,000 in savings interest across all accounts held before they incur tax, with higher rate taxpayers able to earn up to £500. Additional rate taxpayers don't have a PSA and pay tax on all savings interest outside an Isa. The figures are from an analysis of CACI data which is pulled from over 40 savings providers. Fixed-rate savings accounts surged in popularity in the second half of 2023 and into 2024 as savers took advantage of high fixed-rate savings accounts offering rates as high as 6.2 per cent in September 2023. Derek Sprawling, head of savings at Paragon Bank said: 'Fixed-rate savings dominated the market during 2023 and 2024, with many accounts benefitting from high savings rates.' Many of these one-year accounts will be maturing over the next six months, so savers could face a savings tax bill on the interest. The best way for savers who want to shield their savings from a savings tax bill is by keeping it in an Isa, a type of tax wrapper where any interest earned is completely tax free. For this reason, Sprawling said: 'I urge savers review their accounts and make the most of their tax-free allowance by utilising other savings products, including cash Isas.' The best cash Isas currently offer rates north of 5 per cent which is higher than the best one-year fixed rate bond which pays 4.45 per cent. How will I know if I need to pay tax on savings interest? Banks, building societies and NS&I report your taxable interest directly to HMRC each year. When HMRC receives this information, it checks if you've gone over your PSA. If you have, any tax due will usually be collected via a change to your tax code in the following year – assuming you're employmed and part of the PAYE scheme. If you are not employed, you may need to fill in a Self Assessment return and pay the tax due. So, keep track of how much interest you are earning and estimate your overall likely tax rate. If the interest you earn on savings is over £10,000 you need to complete a Self-Assessment tax return.
Daily Mail
07-06-2025
- Business
- Daily Mail
Banking group urges customers with £10,000 in savings to move their money NOW
Customers with £10,000 in savings are being urged to move their money or risk missing out on earning hundreds of pounds a year. In the UK 8.3 million current accounts hold £10,000 or more but 80 per cent of these accounts pay no interest - meaning their money sits passively. However, Spring, a savings app, has encouraged those looking to earn money through interest to move it into a savings account instead. The company warned millions of people in the UK are 'current account coasters' - leaving their money in a main account after paying for essentials, rather than placing it in savings. Derek Sprawling, Spring's Managing Director of Savings, told The Express: 'Cumulatively, nearly £400 billion is held in current account balances in the UK. 'You would imagine that these would mainly consist of small balances, but our analysis shows that there are a significant number of accounts that contain sizeable funds, accounting for over half of the overall balance. 'Most people sensibly maintain a small current account balance to cover emergency costs and everyday expenses, but leaving thousands of pounds in your current account means you will be missing out on hundreds of pounds in interest each year. 'With nearly eight million current accounts containing significant balances, that money could work harder in a higher-paying savings account.' File image: In the UK 8.3 million current accounts hold £10,000 or more but 80 per cent of these accounts pay no interest - meaning their money sits passively He explained that many people are wary about using savings accounts because they can loose immediate access to their money. But there are alternatives, which connect savings and current accounts together. These allow money to be transferred between accounts immediately. As well as unlimited withdrawals.
Daily Mirror
06-06-2025
- Business
- Daily Mirror
Warning issued to anyone with £10,000 in their savings account
New research has found that millions of Brits are missing out on hundreds of pounds in interest by leaving large sums of money sat idle in their current accounts Millions of Brits are losing out on piles of cash annually due to a banking blunder – they're not moving large cash reserves from non-interest paying current accounts. Recent analysis has discovered around 8.3 million UK current accounts with balances over £10,000 are earning zero interest. These dormant accounts collectively hold a whopping £284 billion, a sum that could accrue substantial interest if placed in high-interest savings. The data is brought to light by Spring, the latest savings app incorporating Open Banking tech to sync seamlessly with user's current bank accounts. Spring boasts a 4.30% AER offer, beating typical high street banks' rates. Industry figures used by the app show every eleventh account holds an average of £33,961, and about 1.3 million of these have more than £50,000. Spring is raising the alarm on the 'current account coasters' - those folks who let excess cash sit idly in their accounts instead of transferring to a savvier savings option. Alarmingly, broader industry stats point to 74 million credit-positive current accounts that don't earn a penny in interest, reports the Express. Derek Sprawling, Savings MD at Spring, said: "Cumulatively, nearly £400 billion is held in current account balances in the UK. You would imagine that these would mainly consist of small balances, but our analysis shows that there are a significant number of accounts that contain sizeable funds, accounting for over half of the overall balance. "Most people sensibly maintain a small current account balance to cover emergency costs and everyday expenses, but leaving thousands of pounds in your current account means you will be missing out on hundreds of pounds in interest each year. "With nearly eight million current accounts containing significant balances, that money could work harder in a higher-paying savings account." He further stated: "Many people don't move those funds because they don't want to lose access to it but choosing a savings account that connects to a current account so you can transfer money in seconds and offers unlimited withdrawals, could provide a compelling alternative." Spring's app - available on iOS and Android - allows users to apply within minutes and link their accounts for instant access to savings features, including separate pots and easy withdrawals. It requires no bank switch and promises to help people develop better savings habits with minimal effort.
