I have money sitting in my current account — what should I do?
You know it should be somewhere else. You just don't know where. Here's a step-by-step plan based on how much you've got and what you're saving for.
You already know your money shouldn't just be sitting there. That's why you clicked on this. So let's skip the lecture.
Most current accounts pay 0% interest. Inflation's running at about 3%. So every £1,000 in your current account is quietly losing about £30 of buying power a year. You won't see it on your statement, but it's happening.
Good news? Moving it somewhere better takes about 10 minutes. And the payoff starts straight away.
What your money could be earning right now
Sam's situation
Sitting in current account: £8,400
Interest earned: £0/year
Lost to inflation: -£269/year in real terms
What if Sam just moved that £8,400 to a savings account at 4.5%?
Step 1: Work out how much you actually need on hand
You need some cash in your current account for day-to-day stuff. Keep about 1–2 months of your essential outgoings there. Move the rest.
Sam spends about £1,800/month on rent, bills, food and transport — so keeping roughly £2,700 in the current account makes sense. That frees up £5,700 to go somewhere it'll actually work for Sam.
Step 2: Emergency fund first
Before anything clever, you need a safety net — 3 months of essential costs in an easy-access savings account. If you haven't got that yet, your idle money goes here first. Everything else can wait.
Sam's got £2,100 set aside but needs £5,400 for 3 months of cover. So the first £3,300 should go straight into plugging that gap.
Step 3: Use your ISA allowance (seriously, use it)
Every UK adult gets £20,000 a year they can save or invest completely tax-free. It resets every April. You can't carry unused allowance over. Use it or lose it.
Won't need the money for 5+ years? A Stocks & Shares ISA will likely beat cash over time. Might need it sooner? A Cash ISA still beats your current account by miles.
First-time buyer looking at places under £450k? A Lifetime ISA gives you a 25% bonus from the government on up to £4,000/year. That's £1,000 of free money. Every single year.
Sam's ISA situation
ISA allowance used this year: £0
Left to use: £20,000 of £20,000
Sam hasn't opened an ISA yet. With a house-buying goal in 3–5 years, a LISA (£4,000/year + 25% bonus) plus a Cash ISA for the rest is the strongest move.
Step 4: Match the amount to the action
The biggest mistake? Waiting for the perfect plan
Most people with money sitting in a current account already know they should move it. They just haven't — because choosing between options feels overwhelming. Cash ISA or S&S ISA? Which provider? How much in each?
Here's the thing: any of those options beats 0%. Moving £5,000 to even a basic savings account at 4% earns you £200 a year you weren't getting before. You can fine-tune later. The expensive decision is the one you never make.
£316 billion sits in UK current accounts earning close to nothing. Nearly 60% of adults don't have an ISA at all — that's up to £20,000/year of tax-free savings space going unused. If that's you, you're in good company. And it's fixable in about 10 minutes.
Want this built around your actual numbers?
Theo plugs into your bank (read-only, via TrueLayer) and turns this guide into a plan with your actual ISA allowance, pension, and income. Launching Summer 2026.
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