Best savings account?

[HungryHippos]

if you use BACs it's really dead quick, well it is with the trading account and trading ISA. it's when you bank, like my main one doesn't support their instant bank transfer and that could take days.

I've asked for one of my ISAs to be transfered in, it's taken 4 days for my bank to receieve the message and move the cash and it's still not showing up in my T212 cash isa yet.

Mine does support the instant transfer in, it does it via TrueLayer and just connects straight in and instantly deposits. Withdrawal was still next day but if it's always that, then it's fine I think

I'm still waiting for my ISA from ZOPA to move across, I started that on 21/05, the site says it can take a couple of weeks to move over though, so just being patient.

 

[ddoubleep]

I like Trading 212, it doesn't have commission or fees on trades or platform fees, and the combination of the 5.2% Cash ISA and the S&S ISA is good as it lets you park as cash or invest in stuff as you go. Moving money back and forth doesn't eat into your allowance on the platform as both are ISA accounts.

You can setup auto-investments as well, and you can create investment pies with splits each time you buy it, very customisable. They don't have some of the Vanguard funds but they do have the ETF's. For the S&P 500 one you want VUAG which is the accumulation version.

Due to there being no fees or commissions you can also buy into these investments with as little as £10 or more, or you can configure auto investment on a schedule.

I think HL would be more expensive to do the same sort of thing compared with T212.

Make sure you open the Stocks ISA not the Invest account, like I did by mistake. The Invest account is not an ISA one. Stocks ISA + Cash ISA is what you want.

This doesn't benefit me at all, but use promo code MSE and you get some free shares worth between £10 - £100 when you deposit something into the S&S ISA. This code is for Money Saving Expert, there is no current ref scheme for plebs like me

I got £10 worth of META which I sold as I hate them!

Cheers for this. Was looking at Normal S&S options will go with them over my Vanguard where my SIPP is to save on some fees and tinker.

 

[HungryHippos]

Cheers for this. Was looking at Normal S&S options will go with them over my Vanguard where my SIPP is to save on some fees and tinker.

No worries! It's good so far, I am impressed with the platform, and desktop/mobile access works basically the same.

Recommend doing bank deposits via the App though on mobile as it can tie into your banking app, makes it dead simple.

My investments in the pie are down by a little but stock markets very high still so not surprising, strategy I am going with is buying in over time (sort of converting cash ISA into S&S ISA for a while).

I am used to seeing red numbers, in fact a good deal of red can also mean a good bargain is to be had, so my methods won't change here, I'll keep on investing on a schedule whilst also ensuring I have cash in the ISA to move over if I see a good drop.

Index funds seem to make for good long term/safe bets. Or at least as safe as they can be in these times. I was going to 90% and 10% split Developed World and Emerging Markets but I've added some S&P 500 in for a bit more US weighting.

I've created two pies, one to mimic VWRP with less cost via VHVG + VFEG, and one for S&P 500 only:

This is:

• VG AllWorld VWRP (VHVG + VFEG) (min invest £10 each time)
  
  • 90% VHVG https://www.vanguardinvestor.co.uk/...rld-ucits-etf-usd-accumulating/portfolio-data
  • 10% VFEG https://www.vanguardinvestor.co.uk/...g-markets-ucits-etf-usd-accumulating/overview
• VG S&P 500 (VUAG) (min invest £1 each time)
  
  • 100% VUAG https://www.vanguardinvestor.co.uk/...and-p-500-ucits-etf-usd-accumulating/overview

The VHVG and VFEG ones roughly track VWRP https://www.vanguardinvestor.co.uk/...rld-ucits-etf-usd-accumulating/portfolio-data which is 9.8% Emerging Markets and 90.2% everything else.

I consider the S&P stuff as a separate sort of pot compared with the other two anyway.

Maybe once per year I'd review VWRP and see if the percentages have changed and change future payments accordingly (less or more EM basically). The reason for doing this way instead of going 100% into VWRP are the fees/additional cost. This is 0.22% where VHVG is 0.12% for the 90% and VFEG is 0.22% for the other 10%.

T212 doesn't seem to charge you ongoing fees here but the NAV price is a little higher so you get charged the ongoing fee when you buy I think, but if you hold across several years + then this should wind up a lot cheaper than paying the fees to Vanguard each year directly. I like being able to buy fractional shares as well.

I am hoping to see SIPP arrive on T212 as well with a similar thing (no platform fee, same type of trading options). This would mean I move my SIPP over from Vanguard as well, and then repeat the same type of thing there, routine investments.

 

[HungryHippos]

I've updated the above a little as I've split the pies out, so I do daily auto-invest currently at £33 per day, £30 into the AllWorld, and £3 into S&P one.

I need to occasionally move funds over from the Cash ISA for this, but at a run rate of £33 per day I could shift over say £231 once a week, or enough once a month to cover the upcoming month etc. You can also setup a bank transfer but need to be wary of your ISA allowance if depositing straight into the Stocks ISA. It's for this reason that I feed all cash deposits into the Cash ISA for now, and then just do a fund move to ensure there is enough sat in the uninvested cash of the Stocks ISA to complete my buy orders.

This means in a year it does:

£27 per day into VHVG = £9855
£3 per day into VFEG = £1095
£3 per day into VUAG = £1095
Total = £12045

This sounds like a lot, but min investment combined here is £11 each time in the current 2 pie configuration, so even doing daily I could scale this back down to 1/3rd of the current rate if I needed to slow down. I could also pause investing or split VFEG into it's own pie, which would enable me to do as little as £1 per day into the ones I wanted to keep active.

I can do this kind of pace because I can usually save at least this much each month, but also because my cash ISA has more in than this, so my theoretical interest earnt will subsidise some of this (at the cost of not compounding on itself). I'm not a higher earner I just have lowish bills (and my mortgage is under £500). With Solar I even paid nothing this month for my Elec and Gas!

I don't have any S&S ISA really elsewhere so I'm also running at a high pace so I get one running and self-propelling almost. Once I have enough in Cash ISA + Stocks ISA I hope to start doing more like this but directly into a SIPP, which is why I'm hoping that T212 add the SIPP this year, so I can pivot funds that way as well.

In case you were wondering what daily does when markets are closed, the answer is it queues them up and buys more on the next day the markets are open, so I'll have more positions opened on a Monday than any other day, but it's fun watching it buy daily even if I could achieve the same thing with say a weekly or monthly buy.

 

[slinxy]

What you may find with the pies that they will all want auto invest in the mornings, which is normally at the highest price for the day unless there's some market news later in that day.

This may be different for market trackers but was certainly the case for single shares. I just setup the pies then hit the invest button midday once the morning rush is over, but I guess that will be a pain if you are planning to invest everyday.

I don't quite understand the logical in doing it daily... as effectively you're keeping yourself out of the market and nothing beats time in the market. I do mine monthly as I get paid once a month and while I can take all the funds for the year out from savings then re-top up my savings, it defeats the point of having savings as emergency funds.

EDIT: you will also get 5.2% having uninvested cash in an stocks and shares ISA on T212, the same as having the cash in the cash ISA. The only difference is that the S&S ISA will be in QMMFs and intreast is added on weekly and not daily.

 

[Dg834man]

EDIT: you will also get 5.2% having uninvested cash in an stocks and shares ISA on T212, the same as having the cash in the cash ISA. The only difference is that the S&S ISA will be in QMMFs and intreast is added on weekly and not daily.

Need to enable interest for cash its off be default, they hold your cash in banks and MMF's you can see the breakdown in the interest menu, you get the interest daily regardless if its in banks or MMF.

 

[HungryHippos]

What you may find with the pies that they will all want auto invest in the mornings, which is normally at the highest price for the day unless there's some market news later in that day.

This may be different for market trackers but was certainly the case for single shares. I just setup the pies then hit the invest button midday once the morning rush is over, but I guess that will be a pain if you are planning to invest everyday.

This is a valid point and I wish you could set it to do weekdays only and at a random time interval as well, especially if not. The global trackers don't seem to be that volatile though at least.

I don't quite understand the logical in doing it daily... as effectively you're keeping yourself out of the market and nothing beats time in the market. I do mine monthly as I get paid once a month and while I can take all the funds for the year out from savings then re-top up my savings, it defeats the point of having savings as emergency funds.

Every bit of logic says that lump sum investing vs DCA *is* better on average, for the reason you state.

However I don't want to buy a top and regret it, so I think this approach will give me better peace of mind. I feel like if there is a dip I'll win, and if not I won't, but if I bought in all at once day 1 and then had a 15% correction a few months later, I'd have regretted it.

So my approach here is sort of hybrid, whilst I am not lump sum investing I am putting cash in at a decent accrual rate, and if I see a good drop I'll top up some extra and do some additional one off purchases. I'm actually still awaiting my cash ISA move so couldn't have gone in big anyway, but that appears to show £0 on my ZOPA now so sort of thinking that may appear tomorrow!

I am not going to sell anything here for a long time to come, this is all long term multi-year purchases. I think it's important for the individual to pick a strategy but also for it to be one they stick with, and ideally one that can have semi-frequent top-ups done for accrual purposes.

Daily vs Weekly/Monthly shouldn't ultimately matter all that much, but even doing a more routine weekly etc I wouldn't want to be manually completing orders here, so the auto-invest is the best one for fire and forget, with the exception that it always buys first sort of 10-15 mins of the markets.

EDIT: you will also get 5.2% having uninvested cash in an stocks and shares ISA on T212, the same as having the cash in the cash ISA. The only difference is that the S&S ISA will be in QMMFs and intreast is added on weekly and not daily.

Need to enable interest for cash its off be default, they hold your cash in banks and MMF's you can see the breakdown in the interest menu, you get the interest daily regardless if its in banks or MMF.

The thing to bear in mind is that this uninvested cash in QMMF's is not protected by FCA as they are considered investments.

Cash ISA is 100% protected, so it's best not to have too much cash sent over to the Stocks ISA at a time. I can deal with say a monthly move of funds to cover forthcoming purchases for the month, and having that much at risk without FCA protection.

 

[LeeUK]

Just had word that Marcus are reducing their rates to 4.55%.

 

[DJMK4]

No signs of Zopa lowering their interest rate, looking good and still on 5.08% which i cant see being lowered until next year april

Even though I am paying in to their cash ISA (5.08%) , I have started putting some fundage in to their other type of Non ISA account (4.54%) which will be used as a seperate pot for some car funds. Even though im a higher tax rate payer

 

[HungryHippos]

Given the Cash ISA is flexible, unless you're maxing the ISA pot for the year, why not just put all there?

Do the non Cash ISA ones give you quicker/instant withdrawals?

My ZOPA ISA transfer to Trading 212 says it's sent but I don't see the funds in T212 yet, so they're in the aether somewhere! Hoping they show up today

 

[Avathar77]

Had the same email from Marcus. Need to look for a better place to move.

 

[ddoubleep]

A pretty good video on are Are Cash ISAs a Waste of Money?

I did consider this as got a lot more put away in my Cash ISA and only now doing S&S ISA.

It got me thinking about possibly switching some of that Cash ISA to a money market fund such as the one from Royal London

My thinking was it would still be better than some Cash ISA and could shift some of it into stocks and shares and drip feed into that.

 

[HungryHippos]

Don't really see the point when you can get 5.2% Cash ISA with Trading 212 and drip feed (or lump sum) invest into S&S ISA, that makes more sense.

Unless the money market fund can really outperform the 5.2% with it's FCA protection and such, money in the money market funds is slightly riskier.

That's why I'm sending to the Cash ISA first and then distributing into the S&S ISA.

Stuff may change here but for now this makes the most sense to me.

 

[200sols]

The only risk with MMFs is the government going bankrupt and defaulting on its debt and trust me in that scenario all your cash will be worthless as well.

 

[slinxy]

Cash ISAs are good for long term funds that require a lot of money... either emergency or saving for a car, wedding etc.

You should get better return that in savings after tax and you don't want to be taking money out of the stock market for a wedding if the market is in a dip.

 

[HungryHippos]

Right but I don't see the point on investing in the money market funds if you get basically the same return in the flexible Cash ISA that allows you to withdraw the money at fairly short notice, penalty free anyway.

Given both the Cash and Stocks ISA works with T212 you won't have to worry about per platform limits as you can move the funds between them also without any penalty.

Please let me know if I'm missing anything here but having the Cash ISA also act as relatively easy access cash if you need it, what purpose do the money market funds serve here?

I don't mind being wrong about things or learning stuff to help make better decisions, perhaps I need to watch the whole video as I haven't yet.

I've not really seen much outside of ISA that earns more than the 5.2% stated except for various regular saver accounts and some fixed savers, but these usually have some drawbacks as well (stuff like tying the money up for a while or also needing various current accounts).

 

[HungryHippos]

A pretty good video on are Are Cash ISAs a Waste of Money?

I did consider this as got a lot more put away in my Cash ISA and only now doing S&S ISA.

It got me thinking about possibly switching some of that Cash ISA to a money market fund such as the one from Royal London

My thinking was it would still be better than some Cash ISA and could shift some of it into stocks and shares and drip feed into that.

I've now watched that video and can see where he is coming from in some ways, but in others there are too many varying circumstances for a one-size-fits-all approach.

TLDR Version:

Things are subject to change here over time, but as of today, I'd still say T212 Cash ISA + S&S ISA makes for a powerful, and simple, combination, which gives you flexibility to invest as much or as little as you want into the stocks side of things.

If interest rates on Cash ISA/Savings drop then it will start to make other options look more attractive, so in that scenario I'd probably change things up again if I can to try and maintain a good rate of return.

Longer Version:

If you plan to invest the full £20K each year into your S&S ISA and then buy up index funds/shares then absolutely, cash ISA makes no sense, but this is mainly because you have no ISA allowance left for your cash savings to fit into.

If doing less than £20K (so some ISA allowance left) but you don't want or need more cash reserves, then once again you'd not need a Cash ISA as you'd be committed to investing all spare capital into the S&S ISA.

In the 2nd case though, if you want to keep some in Cash/Savings, then I do think Cash ISA still has a place, and is a good holding pen for money until you decide to use it in other ways. If you can beat the rates outside of the ISA ecosystem with a regular saver or similar then it's worth doing that instead perhaps, but there can certainly be conditions and complexity associated with this, and at a certain point I ask myself if it's worth it.

For most peasants like us who are investing/saving around £20K or less into ISA within a tax year, I think the simplicity of the combination of the T212 Cash ISA + S&S ISA is good, you can deposit entirely to the Cash ISA then choose to shift funds over to the S&S ISA to invest as you will, up to 100% of your deposited cash if you want!

The other thing to bear in mind is that you should ideally try and use some ISA allowance even if you don't have tons of savings, because you are limited in how much/how often you can put money in, but once it's there you can transfer for example Cash ISA to S&S ISA between providers.

The video didn't talk about MMF's being a good alternative investment, so I think again for simplicity, I would not do these without a good reason. Letting T212 handle the interest via Cash ISA (so all in banks/FSCS protected) or S&S ISA (QMMF's but T212 handle the logic) for 5.2% in either is pretty good.

 

[slinxy]

Right but I don't see the point on investing in the money market funds if you get basically the same return in the flexible Cash ISA that allows you to withdraw the money at fairly short notice, penalty free anyway.

Q/MMFs should not be feared, IMHO they should just be seen as another investment class. I have a percentage of a pension pots in it and the returns are good and are independant from stock market conditions.

If you had your money sat in a normal current account, the bank would be using some part of it to generate cash for themselves anyway and you would be getting zero in return. They are allowed to do this as they have a percentage that's been agreed on in reserves to cover people taking money out.

All that is happening is that the bank is using your money to invest in stuff that they would normal agree to lend money out for anyway. Like people mortages and sub mortages, loans to companies/countries, funding housing devoplements etc.
most of the time, it's just collected together with everyone else cash and placed in a high rate savings account or lent to another bank. The only difference is that the bank is doing it their name and not yours.

The reason why FSCS don't cover them, is because it's a lot of work looking into each individual loan and contract then working out how much each person has in each loan, the lenght of the loans so when people can get their money back from that loan. Normally they are clusted together and sold off as an asset if the holding bank needs to be be liquidated to give back people their assets that are directly in that persons name.

The way T212 have their returns set out doesn't give a clear picture, normally Q/MMFs return a more reliable amount as the bank knows that they have x amount of money to lend out for the x period and they can give you x amount in return. Cash ISAs return rates can go up and down depending on interest rates, fixed rate cash ISAs are the bank gambling that interest rates will drop to their advantage. Traditional ISAs do not allow for money to be taken out, what being flexiable here amounts to is T212 lending you the money till the end of the tax year with the idea that you will put back the same amount into the account or more in the future. You can't put 15k in to t212 take out 5k and put that with another 10k into another ISA with another bank.

All T212 is doing is saying, instead of the money sitting there in your account, let us use it to invest in Q/MMFs and we will give you 5.2% back rather than you not getting anything in return.

If their Q/MMFs are diverse and well managed, they will make a lot of money for themselves and take small losses with bad loans.

Your money is only at risk if T212 goes down themselves.. in which case the small amount I have uninvested in Q/MMFs wouldn't be my main worry, it would be the large amount that I have in shares held in their name on my behalve with Interactive Brokers.

 

[HungryHippos]

Using MMF's in a pension fund is fine, that is essentially treating it as interest generating cash, but I'd 100% equities in my pension atm, as I need more growth there over decades than MMF's would provide. As you get older though and nearer retirement, yes it seems a reasonable way of de-risking part of your portfolio.

Personal risk profile and things apply here of course.

I don't see a huge use for them outside of that though, especially as you get fairly equivalent rates via either Cash or S&S ISA in T212 at the moment.

Anyone sat with lots of cash in a normal current account today is following the absolute worst course of action, that being inaction, as you say the banks will gladly give you 0.1% and then get 5.1% themselves on your uninvested bank deposits.

It's why you need a cash reserve that you can dip into at short notice without penalty, and without leaving large sums of cash in regular current accounts.

I think if T212 died, things like Shares should be ringfenced, CFD's would be more complicated, but your spot bought stocks/ETF's and things I think would be relatively safe, I don't think really anyone guarantees this though and FSCS only covers cash.

 

[Mercenary Keyboard Warrior]

My fear would be that should something happen with T212 it would replicate an investment I had elsewhere, which went as follows.
1) Company started to lose money and became unviable.
2) Company called in administrators and quickly became a liquidation event.
3) Company income which was supposed to pay for admin/liquidation was very low, in fact basically non-existent.
4) Liquidators said who is paying us, company shareholders said not us, we are going to get zero so we aren't adding any funds.
5) Liquidators looked at assets to be recovered and said well we can haircut them.
6) Investors (inc me) said you can't, specifically says in our investment that any admin/liquidation fees cannot come from our funds.
7) Liquidators went to court and said we can basically stop work and not chase the people who owe money, or you give us permission to override the restriction on taking our money from investors capital.
8) Courts went, you can but have to be reasonable, so battle then started about what is reasonable (nothing will make your eyes water like seeing the bills from administrators/liquidators)
9) Some large investors then fought to have an investors experienced liquidator to make sure our interests were best reflected, etc

If T212 are creating something that would take time and effort to unwind then if T212 itself was illiquid the money will have to come from investments.
What was galling to some in my example above was that even if you had picked the low risk safe investments because the liquidators were given permission to dip into the funds they treated them all as one pot.
So those easy to recover ones that should have seen marginal impact saw just as much impact as the ones that became very difficult to recover (its still ongoing 4 years on!)

Because of the above I am now very cautions in regards things that should be simple to recover if the company/platform is also performing in areas that may be far more difficult and/or timely to recover.

Just my little cautionary tale