There are now a number of options for cash-rich but time-poor savers who want to earn more interest on their savings than their high street bank will offer, but without the hassle.
This latest innovation is growing in popularity, with some big names now getting a piece of the action.
You may have already read our recent reviews on these Cash Savings Platforms, which are taking the savings market by storm and proving - from what we can see - to be very popular.
So, what are Cash Savings Platforms?
Well put simply they’re a savings supermarket, where savers can have a single log in and then pick and choose which products (from those available at that time) they want to buy.
The real beauty of these platforms is mainly the simplicity, as many people are put off by having to fill in numerous forms every time they want to open a savings account.
With these platforms, you fill in your details once and then decide where you want to save.
Then when the product matures, or you want to move your money, you can either transfer it out of the platform or move it to the next best available product that is available on the platform at that time.
How these platforms work varies from provider to provider, but the premise is the same – one application and then you have access to a variety of accounts.
Some of the platforms do more of the legwork for you, you just select the term or type of account you want and they will distribute your cash, while others will offer you a range of accounts to pick from and you choose how much you want with each one. But you can decide which platform works best for you.
The evolution of Cash Savings Platforms is exciting and, hopefully, as they continue to develop, this will reduce the inertia that savers suffer from, as they make it easier for people to switch.
At the moment there are a handful of cash savings platforms including Raisin UK, Flagstone, Octopus Cash and Hargreaves Lansdown Active Savings. Hargreaves Lansdown is the latest player to join the market, launching their Active Savings offering this month.
Raisin UK, Flagstone, Hargreaves and Insignis all offer a number of savings products to choose from, from a limited number of banks, a bit like a pick ‘n mix.
Raisin UK and Hargreaves Active Savings currently offer a selection of fixed rate bonds from a small number of banks – some of which are very competitive, others which are less so, compared to the open savings market. Raisin UK also offers a bonus on each account (this feature may be changed or withdrawn in the future) which boosts the return.
But with just one application process, it makes choosing and switching much easier, so for many, as long as the return is more than they are currently earning, not having access to all the very best rates is not as important. Plus, the ease of opening new accounts means it’s easier to spread the cash between a number of providers, to keep more protected under the Financial Services Compensation Scheme (FSCS).
The minimum deposit is £1,000 with both of these platforms and no fee is deducted from the interest paid – instead the partner banks pay to be included on the platforms.
Flagstone and Insignis also offer a pick ‘n mix approach, with a wider range of accounts - including easy access, notice and fixed rate bonds - from a larger selection of banks. The Insignis minimum deposit is £50,000 and the Flagstone minimum is £250,000 (and there is an annual fee, which is dependent on the amount deposited with the platform).
There is also Octopus Cash, which works in a slightly different way. You choose either a 12 month fixed rate product or 35 day notice account and Octopus provides a blended rate by placing your money with its partner banks, in best paying rate order. Depending on the amount deposited, they will split the funds so that the money is protected by the FSCS. Again, there is no explicit customer fee – the platform will tell you the blended rate that you will earn.
Savings Champion also runs a Cash Advice Service, charging a one-off 0.15% plus VAT (min £500) for individuals.
As part of the service, it looks at the very best rates available across the whole of the market, not just limited to fixed-term savings or a limited number of banks.
Savings Champion finds the best accounts from the whole market and assists with completing the paperwork.
As these services are all slightly different, it makes sense to choose the one that best suits your needs.
The very best rates can be achieved by scouring the whole market and opening as many accounts as required.
But for those who don’t have the time, but have balances of more than £85,000, the savings platforms might be the compromise which means you don’t leave your cash languishing with your high street bank, earning very little interest or protection, if it’s more than £85,000.
These go into more detail on each platform and highlight who these individual platforms might be more suitable for. There’s more to come. In the coming weeks and months, we’ll be adding Flagstone, Hargreaves Lansdown and Insignis, so watch this space for more information. Of course, if in the meantime you’d like to talk about any of these mentioned, feel free to get in touch.
⭐ We always welcome your feedback regarding the savings providers that you use. We have recently added the Cash Savings Platforms to our review service, so you can share your experiences so far.
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