Here’s the most amount of money you should be keeping in your current account

Keep more than this, and it'll cost you

In the UK, 6.4 million current accounts have £10,000 or more in them according to new data, but what all these people probably don’t know is that they’re losing out.

And even if you’re not one of them, that doesn’t mean it doesn’t also apply to you.

According to experts, if you have more than £1,000 in your current account you may as well choose losing money as only 0.04% of current accounts beat inflation by earning 4% or over.

And if you do absolutely nothing and just leave it there, the value of your money drops.

“A current account should be seen as a tool for everyday spending, not a place to store large sums of money long-term”, Derek Sprawling, head of money at Spring told Metro.

“Think of your current account as your digital wallet – designed for convenience, not storage. You wouldn’t carry £2,500 in cash to the supermarket, so why leave it idle in a current account? Treat it as a flow-through space for your money, not a destination”, he advised.

He says that a sensible amount to cover regular bills and some money for unexpected expenses should be kept in your current account. Basically, between £500 and £1,000, but not more.

Sprawling adds that “anything beyond that could be working harder for you elsewhere. With interest rates on many current accounts sitting well below inflation, excess funds are losing value in real terms”.

Sprawling also recommends doing a weekly review of the money in your accounts.

"Weekly budgeting works well for many people – it helps maintain control and prevents overspending. Topping up your current account in line with your spending habits ensures you’re not leaving large sums exposed to inflation”, he says.

“That way, your current account is essentially just a digital wallet – not a money pit losing value by the month”.

But what is inflation, in simple terms?

What inflation refers to is a general rise in the level of prices. It is the opposite of a general fall in the price level, known as deflation.

While you may not notice the low levels of inflation from month to month, price rises can have a big impact in how much you can buy with your money.