Are you in the current account savings trap? Here is how to get by


You may have heard of the tax trap before, but have you ever heard of the current savings account trap?

Otherwise, you are not alone. But you could have fallen into it without knowing it.

About one in five British adults we interviewed * don’t realize that the value of their savings is even more likely to be reduced by inflation by keeping them in a checking account.

We look at what the current savings account trap is, and above all, how to escape it.

While this article can give you helpful advice, it is not advice. If you’re not sure whether something is right for you, seek financial advice.

* Results of a survey of 2,000 people by Opinium for HL in September 2021.

What is the current savings account trap?

Most would be reluctant to keep money under the mattress, but currently there isn’t much of a difference when it comes to keeping savings in a checking account.

While it offers quick and instant access to your savings, it doesn’t do much to help you get the most out of savings money.

In fact, it does the opposite.

With inflation expected to reach 5% next year, there is a real risk that savers will suffer in the not-so-distant future.

One possible financial backing that emerges from the pandemic is, on average, that people have saved greater amounts than ever before.

But an estimated £ 250bn in savings doesn’t earn much interest and just demands inflation to start eating it away.

Learn more about the inflation risk for your cash savings

What about the too often quick dip?

Savers may be more likely to dip into their savings when they are in their checking account. Almost one in five * people spend their savings when they are not in a separate account.

We generally suggest keeping three to six months of essential expenses in an easy-to-access savings account if you are earning an income. If you are not working, we think you should be holding more than one to three years. We call it an emergency cash buffer.

If you dive in too often and something unexpected happens, it might be more difficult to replenish your savings and you might see your savings plummet faster than you think. You could also run the risk of eating your overdraft to cover additional unforeseen costs.

Rising (and falling) interest rates

With inflation dominating the spotlight on savings and investment, the interest rate available on most checking accounts would not even scratch the surface of savings for better returns.

Even if interest rates rise, they are very unlikely to rise enough to beat inflation in the short to medium term. That’s why it’s important to make your money work harder for you.

A better way to save?

Smart savers get better returns by having a savings portfolio.

By keeping savings that you don’t need for months or years in an easy-to-access checking or savings account, you run the risk of losing real value on your money.

You can amortize this by saving in a mix of fixed-term products where you could earn more interest in the long run. But you won’t be able to access your money until the end of the term.

By mixing and matching different terms, rates, and banks and building societies, you can take charge of your savings and build them around your savings goals.

A savings portfolio can help increase returns by giving savers the opportunity to obtain the best rates and terms for their savings goals.


Build a savings portfolio with Active Savings

You can manage everything online through your HL account – you can see all your savings and investments together. You also don’t need to look for competitive savings rates from different banks and mortgage lenders.

Once you’ve opened your Active or Connected Savings Account, you can look for the right combination of rates and terms that match your goals and needs.

Whether short or medium term is up to you, you have the flexibility to choose and mix providers, prices and conditions. You won’t always get this with the big banks on Main Street.

Cash back

Get £ 10-100 cash back.

Open an active savings account before December 9, then add at least £ 10,000 by debit card and choose your savings product (s) within 60 days to qualify for the cashback. If your balance falls below the eligible amount of your cash offer within 6 months, we can collect your cash back. Conditions apply, see below.

You save Your cash back
£ 10,000 – £ 19,999 £ 10
£ 20,000 – £ 29,999 £ 20
£ 30,000 – £ 49,999 £ 30
£ 50,000 – £ 79,999 £ 50
£ 80,000 or more £ 100


The Active Savings Service is provided by Hargreaves Lansdown Savings Limited (company number 8355960). Hargreaves Lansdown Savings Limited is authorized and regulated by the Financial Conduct Authority (reference number 915119). Hargreaves Lansdown Savings Limited is authorized by the Financial Conduct Authority under the Electronic Money Regulations 2011 with reference 901007 for the issuance of electronic money.

Active Savings Cash Back Offer Terms – What You Need to Know

  1. This offer is available to anyone opening a new Active Savings Account between November 11, 2021 and December 9, 2021 inclusive (“the Offer Period”).
  2. To qualify for the offer you will need to fund your new account with at least £ 10,000 by debit card and then use that money to ask us to add at least £ 10,000 to one or more savings products in that account . Both of these actions must be taken within 60 days of opening the account to be eligible (“the Eligibility Period”). For the avoidance of doubt you can open an account with as little as £ 1 and still qualify for the offer, as long as your account is topped up to a balance of at least £ 10,000 and you use that money to ask us to add at least £ 10,000 to one or more savings products. These two actions must be taken within 60 days of opening the account to be eligible.
  3. If you open an account during the offer period and you also meet the criteria listed in section 2, we will credit your account treasury center with a cash amount between £ 10 and £ 100, depending on the amount you add to one or more savings. some products. We will credit the cash amount within one month of your eligibility period. We will notify you via email once the cash amount has been added.
  4. The value of the cash reward will be based on the total amount added to savings products within 60 days of opening the account. The value of the cash reward will also be based solely on the amount added to your debit card account during the eligibility period. The value of the cash reward will not be based on amounts added to savings products using cash held in a fund and stock account.
  5. The cash reward will be determined in accordance with the levels identified in the table accompanying these terms and conditions.
  6. It is not possible to accumulate the value of the selected savings products on accounts with different customer numbers within the framework of this offer. The maximum amount of money you can receive under this offer is £ 100.
  7. We reserve the right to recover the cash reward if the overall balance of your active savings account falls below the eligible amount of your cash offer within 6 months of the date of the eligible deposit. We will notify you if we intend to collect the cash reward and claim it within 7 business days.
  8. We reserve the right to modify, extend or withdraw this offer if necessary, including for legal, regulatory or other reasons. If the offer ends earlier, all eligible requests received up to that time will still be accepted. Details of any such modification, extension or withdrawal will be posted on our website at
  9. This offer is not available to anyone who already has an active savings account.
  10. You must not be an employee of any Hargreaves Lansdown group company or an immediate family or household member of such employee.
  11. This offer is limited to a payment of up to £ 100 per customer.
  12. This offer will be governed by English law and by participating in it you submit to the jurisdiction of the English courts.
  13. References in these terms and conditions to “Hargreaves Lansdown”, “our”, “we” or “we” mean Hargreaves Lansdown Savings Limited (company number 08355960), authorized and regulated by the Financial Conduct Authority (FCA register number 915119) under the Electronic Money Regulation 2011 with the firm reference 901007 for the issuance of electronic money. The registered office is located at 1 College Square South, Anchor Road, Bristol, BS1 5HL. References to “Hargreaves Lansdown Group” refer to Hargreaves Lansdown plc (company number 02122142) and its subsidiaries from time to time.

The best rates on Active Savings

Easy access

Up to
0.50% | 0.50%

(ARE | Raw)

1 year

Up to
1.33% | 1.33%

(ARE | Raw)

2 years

Up to
1.55% | 1.55%

(ARE | Raw)

3 years

Up to
1.65% | 1.65%

(ARE | Raw)

Easy access

Up to
0.50% | 0.50%

(ARE | Raw)

1 year

Up to
1.33% | 1.33%

(ARE | Raw)

3 years

Up to
1.65% | 1.65%

(ARE | Raw)

Find out more

Please note that the above products are some of our most popular, but more are available. Click on the link above to see our full range. Products can be added or removed at any time. Minimum deposit requirements apply to individual products. Easy-access products pay a variable rate and fixed-term products pay a fixed rate.

Source: Bank of England September 30, 2021. Comparisons to mid-market rates for Easy Access products are based on Instant Access products, which allow immediate withdrawals. Active Savings offers easy access products and withdrawals typically take one business day.

Individual savings held in banks and licensed mortgage companies are covered by the FSCS. All of our partner banks are authorized by the Prudential Regulation Authority (PRA) and covered by the FSCS.

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