Produced in partnership with Kroo.

Most of us have become fairly accustomed to shopping around when it comes to our finances, whether that means comparing energy tariffs, checking insurance renewal prices or moving savings when an introductory rate disappears, but there is one account that can very easily escape the same scrutiny.

Your current account is, after all, mostly functional. It’s where your salary arrives, where the mortgage or rent comes out and where direct debits, supermarket shops, petrol and all the other expenses of everyday life steadily eat away at your balance, so we don’t necessarily think about the money sitting there as something that could also be earning money.

That’s why a new offer from digital bank Kroo caught our attention. Eligible new customers can currently earn 3.00% AER / 2.96% gross (variable) interest on their current account balance, including a fixed 2.00% AER promotional bonus for the first 12 months, with interest calculated daily and paid monthly.

Crucially, you don’t have to switch your existing current account to open one, which means it could potentially be used alongside the bank you already have rather than requiring you to move your salary and every direct debit you’ve accumulated over the years.

It raises a much bigger question than whether one particular bank account is worth considering: how much money are we routinely leaving sitting in current accounts that may pay little or no interest simply because we’ve never thought to check?

How much money do you actually leave in your current account?

This is the first question worth asking because, if you’re somebody who deliberately keeps a decent financial cushion available, the answer can be surprisingly revealing.

Some people reach the end of the month with very little left over, in which case earning interest on a current account balance probably isn’t going to make a huge difference, but others deliberately keep several thousand pounds accessible because it covers upcoming bills, provides an emergency fund or simply gives them the reassurance of knowing that an unexpected expense isn’t going to send them straight to a credit card.

Let’s say that amount is £5,000.

Keeping £5,000 readily available isn’t necessarily excessive, particularly if you’re self-employed, your income fluctuates, you have a family or you simply know from experience that boilers, cars and household appliances have an uncanny ability to break at the least convenient moment.

The question isn’t whether you should have that financial buffer, because having accessible emergency money can be extremely useful; it’s whether the account you’re keeping it in is giving you anything in return.

Neither amount is going to transform your finances, but when we’re constantly looking for ways to shave £10 from one household bill or £20 from another, it seems slightly strange to ignore money that could potentially be earned on cash we intended to keep accessible anyway.

Why not simply move the money into savings?

This is the obvious question and, depending on your circumstances, it could also be exactly what you should do.

If you have a substantial amount of cash that you don’t need for everyday spending or emergencies, there are easy-access savings accounts, Cash ISAs, notice accounts and fixed-rate products to consider, and you should always compare the wider market rather than assuming a current account will give you the best return.

However, there is a slightly awkward category of money that doesn’t quite feel like savings. It’s the money you want readily available because the mortgage is coming out, Christmas is approaching, the car is making a suspicious noise or you simply know that the next expensive surprise is unlikely to give you much notice.

You can continually move that money backwards and forwards between savings and your current account, of course, and plenty of organised people do exactly that, but it creates another bit of financial admin and may not be something everybody wants to think about every time a large bill approaches.

That’s effectively the thinking behind Kroo’s current offer: rather than requiring someone to overhaul all of their existing banking arrangements, it gives customers another option for money they want to keep accessible while potentially earning interest on it.

What could your current account buffer actually earn?

Open your banking app and take a look at your balance, but rather than concentrating on the exact figure showing today, think about what your account normally looks like across an entire month.

Once your mortgage or rent, bills and other regular commitments have been taken into account, is there an amount that tends to remain there?

Using 3.00% AER / 2.96% gross (variable) purely as an illustration, and assuming both the balance and rate remained unchanged for the first 12 months, the figures would look roughly like this:

These are illustrative figures rather than guaranteed returns because rates can change, current-account balances naturally rise and fall and your individual tax circumstances can affect how much interest you ultimately keep, but they demonstrate why knowing what your everyday money is earning becomes more important once the amount gets into the thousands.

We looked beyond Kroo’s 3.00% AER / 2.96% gross (variable) headline rate

The 3.00% AER / 2.96% gross (variable) rate is what initially caught our attention, but a headline interest rate isn’t enough on its own for us to suggest readers even consider opening another bank account, so we looked more closely at what Kroo actually offers, what it costs and, importantly, what you need to know before deciding whether it suits you.

The ability to keep your existing bank could be the interesting bit

This is one of the features I think is easiest to overlook because bank promotions so often revolve around persuading us to switch.

Kroo isn’t part of the Current Account Switch Guarantee, but you don’t have to close or move your existing account to open one, so you could keep your salary, mortgage, direct debits and other everyday arrangements exactly where they are.

For someone who is perfectly happy with their existing bank but has several thousand pounds of surplus cash sitting in a current account that may pay little or no interest, that creates a different proposition from the usual “move everything to us” banking offer.

You are, of course, adding another account to your financial life, which won’t appeal to everybody, but if the alternative is repeatedly shifting money backwards and forwards between accounts, some people may find keeping a separate pot of accessible cash easier to manage.

No monthly account fee – but always look for the other costs

Kroo doesn’t charge a monthly account fee for its current account, which is worth highlighting because an interest-paying account becomes rather less attractive if the benefit is being swallowed up by a regular account charge.

That doesn’t mean you should assume that every possible banking transaction everywhere will cost nothing, however, and this is where reading the terms matters.

It’s one of the reasons I prefer looking at the whole account rather than simply comparing headline interest rates. An account needs to fit the way you actually use your money, rather than looking fantastic in a comparison table and becoming irritating once you’ve opened it.

The budgeting tools could help separate your ‘spare’ money

One of the difficulties with keeping a large balance in a current account is that seeing £5,000 sitting there can create the illusion that you have £5,000 available to spend, when in reality £1,000 might be for an upcoming holiday, £1,500 is your emergency fund and another chunk is earmarked for a large annual bill.

I wouldn’t open a bank account simply because it has budgeting tools, but if you’re trying to make the money sitting in your current account work harder while also keeping it organised, they are useful features to have.

What about using Kroo abroad?

If you travel regularly, overseas spending is another part of a current account worth checking because foreign transaction fees can quickly undo some of the money you’ve made elsewhere.

Whenever you’re using an ATM abroad, check the information displayed before accepting the transaction so you know whether the machine’s operator is adding a fee.

What about the 12-month bonus?

This is one of the most important things to understand before being attracted by the 3.00% AER / 2.96% gross (variable) figure.

The remaining element is variable, and rates can change, which means I’d put a reminder in my calendar before the promotional period ends and compare what Kroo will pay from that point with the wider market.

In fact, that’s a habit worth adopting with almost every financial product because a competitive account can become considerably less interesting if its promotional period ends or the market changes and we simply stop paying attention.

Don’t choose any current account because of one attractive number

There is a danger whenever a bank advertises an eye-catching rate that we focus entirely on that figure and forget about everything else we actually need from an account.

Think about how you bank before thinking about the interest.

If you regularly rely on an overdraft, for example, Kroo may not suit you because it doesn’t currently offer one, while somebody who likes walking into a branch and speaking to someone face-to-face may understandably decide that a digital bank isn’t for them.

Equally, if you have genuine long-term savings rather than an everyday financial buffer, an easy-access savings account, Cash ISA, notice account or fixed-rate product could be more appropriate and potentially pay a better rate.

The right question isn’t simply “Which account pays the most interest?” but “Which account works best for what I’m trying to do with this particular pot of money?”

What else does Kroo offer?

Existing customers can also apply separately for a Kroo Flexible Cash ISA, while Kroo offers personal loans to eligible customers.

These are separate financial products with their own terms and eligibility requirements, so the fact you have a Kroo current account doesn’t automatically mean either will be the best option for you. If you’re saving, compare ISA and savings rates across the market, and if you’re considering borrowing, compare the interest rate and total cost with other available options before applying.

That distinction is important because convenience is useful, but it shouldn’t replace shopping around.

Is my money protected with Kroo?

This is a question worth asking before depositing a substantial amount with any bank, particularly one you may not have used before.

It’s also worth remembering that the maximum balance on which a bank will pay interest and the amount covered by deposit protection aren’t necessarily the same thing, so anyone considering holding a particularly large balance should check the latest FSCS protection rules before moving their money.

For more information, read MoneyMagpie’s guide to managing your money and protecting your savings.

Do you pay tax on current account interest?

Potentially, although many people can earn some savings interest without paying tax on it thanks to the Personal Savings Allowance.

Interest earned on money held in bank accounts can count towards your savings income for tax purposes, so if you already have substantial savings elsewhere it’s worth considering the total interest you’re earning across all your accounts rather than treating each one in isolation.

Cash ISAs work differently because interest earned within an ISA is tax-free, which is another reason somebody with a large amount of cash shouldn’t automatically choose a current account simply because it advertises an attractive rate.

Your circumstances matter, and the best home for £5,000 of readily accessible money won’t necessarily be the best home for £50,000 of longer-term savings.

The five-minute current account check I’d do today

Before you start moving money anywhere, spend five minutes looking at your current account and work out roughly how much you normally keep there once your regular bills have been accounted for, then find out what interest rate – if any – you’re currently receiving.

If you’re routinely keeping several thousand pounds in an account that may pay little or no interest, compare your options and think about whether some of it belongs in an easy-access savings account, whether an interest-paying current account such as Kroo might suit you, or whether a combination of the two makes more sense.

There is no point making your finances unnecessarily complicated for the sake of earning a handful of pounds, and an attractive headline rate shouldn’t persuade you to open an account that doesn’t fit the way you actually manage your money.

However, if you’ve spent the past year carefully comparing savings rates while £5,000 has been sitting quietly in your current account that may pay little or no interest, that feels like a financial blind spot worth investigating.

We spend an enormous amount of time looking for clever new ways to save or make money, but occasionally the easiest wins come from looking at the money we already have and asking one very simple question: could this be working harder?