Top cash rate, a free ISA and your questions answered

This week it's an update on the highest interest rate on cash. Calling out an ISA which has no charges. Answering your questions. And we’ve a manifesto money summary. Off we go…

5.2% on cash, anyone?

The best easy-access cash rate of 5.2% is still from investment platform Trading 212. The interest is calculated and paid daily and there are no restrictions on when you can get your hands on the money. It’s a pretty good deal and it looks like a loss-leader to turbo-charge their customer base. This rate applies to cash held in a Cash ISA or on money in your Stocks & Shares ISA you haven’t invested yet.

Trading 212 is not a bank, so they split your money into one or more accounts at Barclays, JP Morgan and NatWest. These Big Boys are of course covered by the £85,000 FSCS protection scheme, in case they go under. But if you already bank with one of these three (and remember that JP Morgan own Chase), it’s a total of £85,000 at any of these banks, whether that’s in a main current account held directly with one of these three or money which ends up there via Trading 212 for example.

And why do we pay % fees for an ISA?

Our ongoing research confirms that Trading 212 is currently the most popular DIY investment ISA pick with the under 35s, followed by Moneybox and then Vanguard. And here’s why. The app is lovely. Really nice to use. This is a tech-firm first and an investment firm second IMHO. And they don’t charge any fees on an ISA.

Yes, you read that right. This is a minor brain fry and presents a headache for other platforms at a time when the regulator is banging a loud drum about value for money. It also makes me question (again) why other platforms are still charging up to 0.45%. Or % fees at any level, rather than a fixed £ fee. Has tech moved on so much that charging for an ISA account is old-school?

We’re not there yet. In general, I do believe that you get what you pay for, and I still don’t really understand how Trading 212 see the long-term game plan and how they can financially navigate this landgrab/what’s going on under the bonnet. Oh, I’ve had it explained to me, but I’m old and grumpy enough to be suspicious about complicated answers.

It’s a relatively straightforward service, so if you need to do something complex or to speak to someone about pension details or access funds or gilts – this isn’t for you. BUT. Even with all this in mind, it looks really nice to me and I think older investors should download the app and have a look. It certainly throws down the gauntlet to the traditional players. You can read our fuller review of Trading 212 or compare to other platforms.

Manifesto Mania

To the manifestos, and we're starting to get some clarity on what is proposed. We’ve reviewed these and bring you a summary of Manifesto Money. Capital Gains Tax is something I think will bite us all more in the future, so using our ISA and pension allowances is arguably more important than ever. Our new Tax Hub will help answer your questions and suggest things to consider.

What is bugging you?

Finally, last week I invited you to share your questions. We have had a huge response and we’re working through these now, aiming to get everyone a reply. I’m sorry if I haven’t acknowledged your note in person.

I’ve tackled some here, and have asked some industry experts and financial advisers I know for their help. I’m including a selection because I think we’re all interested in what everyone is asking. Especially as repressed Brits who never talk about money :0) Here goes:

We’ll keep the answers coming and please send in your questions too. Remember, we cannot offer financial advice, calculate your numbers or tell you categorically what to do or buy. But we can tell you the rules, suggest what to consider or point you in the right direction. Phew!

Have a good weekend everyone. I'm taking my son to Bilbao for a delayed 16th birthday present and to celebrate the end of his GCSEs. We're on the early Saturday flight because we need to present ourselves in a bar TBC by the early evening. I think a vital part of his education is taking him to a spit and sawdust bar to watch as Spain play Croatia. Venga. Vamonos! Mas cerveza, gilipollas, porque no?! It’s time he saw the other side of his mother.

Holly

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