The reasons for a flying school, or indeed any other business, giving a discount for bulk purchases, has more to do with the marketing & work planning, than with the prevailing rate of interest, per annum, on savings accounts.
For instance, "lock out" applies when your local supermarket has just sold you 10 packets of cornflakes for the price of 8. You are now "locked out" of the cornflake buying market, for the next 10 weeks, so will not buy from a competitor.
The same applies for a flying school. If you have just purchased the next 20 hours, at a discount, you are unlikely to go elsewhere. The school has you as a guaranteed customer, for the next few weeks, & if the school does a decent job, you will stay with it, for your following batch of hours.
It is also easier for a school to plan the requirements of aircraft & intructors, when it knows how many lessons have been presold.
BTW a 5% discount for 20 hours, cannot be directly equated to an interest rate of 5% per annum. It will depend whether you take 1 month or 12 months to fly it off. So those who intend to do a lot of flying in a very short time, can do a good deal on prepayments.
As ever, unless you have thoroughly checked the financial status of a flying school, the advice should by to ONLY make large prepayments via your credit card.