Hargreaves Lansdown - Active Savings currently offers some competitive fixed term accounts via its platform, which you might want access to. But just what is Active Savings and what value can it add to you?
Background information | What is a platform? | Today's savings market | Who might Hargreaves Lansdown be right for? | Application process and customer service | A final word...
Hargreaves Lansdown is a FTSE 100 company, based in Bristol where they now employ over 1,300 people.
In addition to its cash savings platform ‘Active Savings’, Hargreaves Lansdown has one of the UK’s largest investment platforms for private investors. They have helped investors for more than 35 years and today look after more than £86 billion for over 1 million clients.
About the platform?
Active Savings is the pick and mix variety. Think of it like a supermarket which offers a variety of savings accounts, which you can pick and choose from.
The key benefit of a platform is that you can open a number of different accounts with different providers, but you only have to fill in your personal details once during the application process and Hargreaves Lansdown will complete a compliance and identification check.
So, once you have set up your Hargreaves Lansdown Active Savings Account you can view, manage and open your choice of savings accounts with just a few clicks of the mouse.
It is worth noting that your money will be held with the individual banks and building societies that you open accounts with - NOT Hargreaves Lansdown – so will be protected by the Financial Services Compensation Scheme (FSCS) or equivalent European scheme that is applicable to that individual provider. This does mean however that you need to be wary of placing too much money with a provider that you already have funds with –although you are in control of where your money is placed.
At the moment, Active Savings has partnerships with a small number of banks, offering several fixed term deposit accounts. But they will continue to increase the products available and we’ll keep you up to date with this.
Of course, just because it’s on the shelf, doesn’t mean that it is a best buy, but sometimes simplicity is the best option, which is why these platforms are being developed. You can always check what the very best rates are on the market by looking at our best buy tables.
Today's savings market
As mentioned above, Hargreaves Lansdown Active Savings is not whole of market.
Currently it has partnerships with nine banks: Aldermore, Charter Savings Bank, Close Brothers Savings, Coventry Building Society, ICICI Bank UK, Metro Bank, Paragon, Shawbrook Bank and United Trust Bank, offering a number of fixed term deposit accounts, with terms from three months to five years, some of which are pretty competitive.
To view how the rates on offer compare with the best on the market, take a look at our fixed rate bond best buy tables and our Sharia fixed term deposit best buy table.
Who might Hargreaves Lansdown Active Savings be right for?
If you are looking for a streamlined online application process, where the following restrictions imposed by this simplification are not a barrier to you, then Hargreaves Lansdown Active Savings could be an option to consider further;
1) The whole process is done online, although there is a helpline number for those who need assistance.
2) The accounts can only be opened in sole names – no joint accounts I’m afraid.
3) The minimum balance needed to open a Hargreaves Lansdown Active Savings Account is £1,000. The minimum for each product will vary. At the moment the highest minimum is £1,000.
4) Your identity will initially be checked electronically – but if you fail, you will be asked to send identification documents in the post.
As Hargreaves Lansdown receives commission from the savings provider partners, the rate you are offered is the rate you will earn - there is no additional fee to be paid.
However, this may mean that you could earn a better rate by going directly to the provider – although this would mean completing a separate application for each account you open. And sometimes Hargreaves Lansdown will have arranged exclusive market-leading bonds.
So, it makes sense to check the competition on our best buy tables or call one of our savings experts on 0800 011 9705.
Application Process and Customer Service
Once accepted, you can view, purchase and manage a range of savings products online – all in one place, without filling in an application form or going through ID checks each time. Ordinarily and without the use of such a platform, if you open multiple savings accounts, you have to apply to each bank and therefore fill in multiple application forms and pass each bank’s own ‘Know Your Client’ identification checks.
Application
You need to deposit the minimum £1,000 during the application process. If you have not transferred this money into a savings product with three days, the funds will either be returned to your bank account, or to your Hargreaves Lansdown Fund & Share account (if you have one!)
ID
This is initially automatically checked electronically – if you pass the criteria, you will be advised that your Active Savings account is open.
Depositing funds onto the Platform
Once the application and ID is accepted and your account has been set up with at least the minimum £1,000, you can log in, deposit further funds in the Hub Account and build your savings portfolio, choosing how much you want to deposit in each account. Remember that the FSCS protection applies to the total amount held with each bank or building society – not the amount held in each account. This includes funds held outside the platform too.
The Hub Account is provided by Barclays – but the money held in the Hub Account is ringfenced from other Barclays cash that you may hold outside the platform, for FSCS purposes.
At the moment, you can only pay into your Active Savings Hub Account (held with Barclays) either by debit card or from another Hargreaves account, if you hold one. The debit card will normally allow a single transaction of up to £99,999 – so could be a better way to deposit money than via normal electronic transfer, as many banks will restrict the amount that can be transferred per transaction/per day to as little as £10,000.
In addition to the Active Savings Account, you could open a Hargreaves Fund & Share account (which would normally be used to fund any investments that you might want to make via Hargreaves) into which you can deposit funds by electronic transfer (if necessary over a series of days), CHAPS (paying the £20- £30 fee) or they will also accept a cheque. You can then transfer the funds from the Fund & Share account into the Active Savings Account.
Unlike other platforms, each savings account via Hargreaves Lansdown Active Savings has a designated start date. So, while you need to have opted for the account you want to open within three days of transferring the funds into the Hub Account, it will actually be sent to the new savings account on the designated start date. So, there may be a period of time that your cash is not earning any interest.
The funds are never held by Hargreaves Lansdown – so there is no credit exposure with them.
Notification of maturity
When your bond is due to mature, Hargreaves Lansdown will contact you to check whether you want to open another bond via the platform or have your money sent back.
Once the funds are back in the Hub Account, you can then request them to be either moved to a different savings account by clicking on the account of your choice or choose to have it sent back to your nominated current account. There is no option for transferring the money to any other external account, to safeguard funds from any potentially fraudulent activity.
Remember, if the money is in the Hub Account for more than three days, it will be returned to either your Fund & Share account (if you have one) or back to your linked current account.
As it is still early days, your feedback about the customer service you receive from Hargreaves Lansdown will be invaluable in helping your fellow savers going forward, so please make sure you let us know about your experiences.
Active Savings offers a number of fixed rate bonds from a limited number of providers but sometimes will offer exclusive rates that are better then what is available from the open market, so are well worth a look to see what they have on offer.
These offers will change, so you’ll need to keep an eye on how they compare with the wider market.
Obviously the best option is to open up the highest-paying accounts available from the whole market, but we understand that some people just don’t want the hassle or have the time.
So, if you’re looking for simplicity when opening multiple accounts and you’ve money sitting in a dreadful account, such as the likes of HSBC’s Flexible Saver account paying a paltry 0.01% - then right now you’ll get a better return with Hargreaves Lansdown Active Savings, so don’t sit back and do nothing, make the switch to a better account.
*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).
All rates correct at the date of publication.
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