If you have £10,000 or more in your current account, take a moment to rethink your strategy. New research shows that many people in the UK keep large sums in no-interest bank accounts, letting their savings lose value daily. With rising inflation and better options available, it’s important to make smarter financial decisions.
At Clarkwell & Co. Chartered Certified Accountants in London, we help clients improve cash flow, save on taxes, and manage their savings wisely. This guide is for self-employed individuals, freelancers, landlords, and startups. We’ll explain how to avoid financial traps and show you how to better manage your money so it can grow.
In this guide, we’ll share real stories of clients who avoided common money traps by reviewing their cash management. From everyday savers to business owners, we’ve helped them make choices that increased their interest earnings and improved their financial options.
The Hidden Danger of “Safe” Current Accounts
Storing your money where you can see it feels safe, but current accounts aren’t meant for saving. They are for everyday purchases and offer little to no interest, especially on amounts over a certain limit. This means if you keep your money in these accounts, you’re missing out on easy, risk-free earnings.
In the UK, over 6.4 million current accounts hold £10,000 or more. That money isn’t working for you while inflation reduces its value. It’s not just about missing interest; it’s a poor choice that could cost you a lot in the future. This is a common mistake UK savers should avoid, especially since better options are available now.
Whether you’re saving as an individual, running a small business, or managing a side hustle, knowing the risks of letting cash sit idle is crucial. If you have extra money in your current account beyond what you need for bills and expenses, find a way to make it earn more for you.
Understanding Inflation: Your Silent Wealth Killer
Inflation is at 3.6%. If you keep your £10k in a current account with 0% interest, you lose £360 a year in value. This is the cost of doing nothing with your money. Many people forget that inflation means you can buy less with the same amount of money over time.
For example, today your £10k might cover a family holiday. In five years, that trip could cost £11,800. If your money sits in a no-interest account, you’ll have lost almost £1,800 without realising it.
Inflation impacts everyone, but few take steps to counter it. So, finding ways to earn interest on savings in the UK is essential. If you’re confused about how inflation affects your finances, our expert accountants in Shoreditch can help explain it.
Current Account vs Savings Account: Know the Difference
A current account is your everyday bank account for deposits, withdrawals, and paying bills. It offers flexibility but little else. A savings account helps your money grow.
When comparing a current account vs a savings account, here are the key differences:
- Interest rates: Savings accounts typically offer higher interest rates.
- Access: Current accounts are instant-access, and savings accounts may limit withdrawals.
- Purpose: Current accounts are for spending, savings accounts are for growing wealth.
At Clarkwell & Co., we advise clients to balance cash flow with growth when managing business funds. Many clients don’t notice how much money sits unused each month until they check their statements with our Bookkeeping Services London. Understanding your actual cash needs is the first step to making better choices.
If you run a limited company, sole trader, or partnership, your extra funds should also focus on tax efficiency. Talk to our Corporation Tax Return London team to learn how banking and tax strategy can work together.
What to Do with £10k Savings UK: Smarter Alternatives
If you have £10,000 or more, find a place where it can earn you money. There are safe and flexible options that offer better returns than current accounts:
a. Easy Access Savings Accounts
These accounts let you withdraw money anytime while earning good interest. They are great for emergency funds and flexible savings. If you want the best savings account in the UK for 2025, look for one offering 3% interest or more, no penalties, and FSCS protection. These accounts balance growth and easy access.
b. Easy Access ISAs
An easy-access ISA or savings account offers tax-free interest. If you want to preserve your Personal Savings Allowance (PSA), ISAs are a great choice. They are especially helpful for higher-rate taxpayers or anyone wanting to avoid issues with earned interest.
c. Regular Saver Accounts
Some banks provide bonus rates if you save monthly. These accounts usually have limits, but are great for forming a savings habit and earning a bit more.
d. Business-Specific Savings Products
If your business has extra cash, consider business savings accounts. Our specialist accountants for tech startups and SaaS companies help companies manage reserves to maximise returns without losing flexibility.
Why You Should Avoid Banking Mistakes UK Savers Often Make
One common mistake is not checking your banking setup for years. The financial world changes, and so should your savings plan. If you’re a freelancer, business owner, or part-time worker, you should regularly review your finances.
Another big mistake is not seeking expert help. Our Chartered Certified Accountants in Islington assist clients in reorganising their finances to cut waste and boost earnings. We’ve helped many creatives, contractors, and professionals regain lost interest with simple banking changes.
These small financial adjustments can add up to significant savings over time. A solid savings plan combined with expert advice can help you turn lost opportunities into steady growth.
Where to Put Money to Earn Interest UK: Real Options
Here are a few realistic places to consider if you want to earn returns without taking massive risks:
- High Interest Savings Accounts: Look for ones offering 3%+ interest.
- Fixed-Term Savings: Slightly less liquid but often higher rates.
- Premium Bonds: Not guaranteed, but you could win tax-free prizes.
- Cash ISAs: Tax-efficient savings, especially useful for high earners.
Looking for the best place to keep £10k in cash in the UK? It depends on whether you need easy access or want your money to grow. Generally, a no-interest current account is not a good option.
Remember, some banks give switching bonuses, which are free money. Others offer higher interest if you meet certain monthly activity requirements. Check your options, and if you need help, schedule a free call with Clarkwell.
How to Grow £10k in the UK: Actionable Tips
Start with a plan and a goal. If you want a safety net, keep your money in a high-interest, easy-access savings account. For long-term growth, think about tax-free ISAs or diverse investments like index funds, bonds, or pensions.
If you own a business, consider reinvesting some money into systems or expert advice, like our VAT Return Services or Corporation Tax Return support in London. This can give you better returns than just letting your money sit in a savings account. Your money should either grow on its own or help you grow.
Ask yourself: what do you want to do with this £10k? Is it for security, retirement, a property deposit, or business expansion? Once you know your goal, it will be easier to choose the right option.
Interest-Free Current Accounts Warning: Real Stories, Real Losses
We recently worked with a creative agency that had over £60k in their business account for almost 18 months, earning no interest. After we adjusted their finances, they began earning over £1,800 each year just by moving their money to a better place.
This isn’t unusual. We see similar situations with tech companies, startups, and media producers. That’s why we provide specialised support for Accountants in Media and Film Production, as well as for Tech Startups and SaaS Companies in the UK. These industries often get large payments and need to manage their cash flow wisely. Keeping money idle can be a big mistake.
Think about what you could do with an extra £1,800 a year to invest, expand, hire, or save more. That’s the value of being aware and taking action.
Don’t Just Save. Grow Smart With Clarkwell & Co.
If you’re reading this, you likely care about your finances, which is great. But just knowing isn’t enough; you need to act. Whether you have personal savings, run a business, or are an investor, don’t let your money sit unused.
At Clarkwell & Co., we go beyond accounting. We help you think smartly about your money. As expert accountants in Shoreditch and beyond, we assist Londoners with their finances every day.
Our team guides you through forecasting, cash flow management, savings strategies, and investment plans. Book a free consultation today, and let’s talk about the best ways to manage your savings and business accounts.
Avoid This Mistake Before It Costs You More
To recap:
- Don’t keep more than necessary in a current account.
- Move savings to high-interest or tax-free accounts.
- Avoid letting inflation quietly erode your money.
- Use your cash to earn, grow, or protect value.
- Get professional support when needed.
Every pound counts. If you have £10,000 or more in a no-interest account, it’s time to make that money work for you starting today.
