Why You Shouldn’t Keep More Than €5,000 in Your Current Account

Is It Wise to Keep More Than €5,000 in Your Current Account?

Many people accumulate money in their current account and leave it there.
But is it the best decision to make? Probably not.
Having more than €5,000 in your current account is a prudent yet risky choice, and there are at least five factors that explain why.

Reasons to Avoid Keeping Too Much Money in Your Current Account

1) No Interest: Parking a large sum of money in your current account without earning any interest is not financially savvy.
Current accounts are meant to hold money for short-term expenses, not for substantial amounts that could be invested elsewhere to generate returns.
It’s better to keep a slightly lower amount in your current account to cover monthly expenses, including unexpected ones, and to have an emergency fund for any unforeseen circumstances.

2) Increased Exposure to Unnecessary Spending: Having a significant balance in your account increases the likelihood of spending money on products and services that you don’t actually need.
Separating savings from daily liquidity makes it psychologically harder to dip into funds meant for other purposes.

3) Tax Implications: The stamp duty is a tax deducted by the bank where you hold your current or savings account, as mandated by decree-law no.
201/2011.
For individual current accounts with an average balance exceeding €5,000, the fixed fee is €34.20.
This applies to each account, including deposit accounts, which have different calculation rules.

4) Security Risks: Not everyone is aware of the Interbank Deposit Protection Fund (FITD), which guarantees up to €100,000 per depositor and per bank in case of the bank’s insolvency.
Deposits exceeding €100,000 are neither guaranteed nor refunded in case of issues.

5) Vulnerability to Scams: Having a large balance in your current account makes you a target for scammers both inside and outside the bank.
While there is no specific amount that makes you “fraud-proof,” those with lower balances, like less than €5,000, are less likely to attract unwanted attention.

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