Unlock exclusive savings deals that pay more than 5%
SAVINGS rates are hitting 5 pc, but some top deals can only be accessed by signing up to a savings platform. These websites allow you to hold money with different banks and building societies all in one place, and often have top rates that you can’t find elsewhere.
Last week, the Raisin savings platform launched a one-year fixed-rate savings bond from National Bank of Egypt.
Savers who can lock their money away for a year get a 5.25 pc interest rate with this deal.
The best oneyear rate outside a platform is 5.26 pc at SmartSave Bank.
The Hargreaves Lansdown Active Savings platform offers 5.06 pc for a one- year fixed- rate savings bond from Aldermore Bank. That’s higher than the 4.85 pc you can get on the same type of product as a direct customer of Aldermore.
Raisin and Hargreaves Lansdown are both free to use. Other major platforms include Aviva Save, AJ Bell Cash Savings Hub, Flagstone and Interactive Investor. The big plus of savings platforms is that you can move money around easily between providers to access better rates.
Once you have signed up, there’s no need to fill in a form and prove your identity each time you open a new account. They just ask for your details once, and the whole process can take ten minutes. Then you can transfer cash into your account on the platform, known as a cash hub, before deciding how to split it between savings providers.
There are some drawbacks. Savings platform services are only available online, and you can’t yet open a savings platform account in joint names. Rates don’t always beat those offered directly by banks and building societies, either, so you will still need to check. Rachel Springall, of Moneyfactscompare, says: ‘ Savings platforms can be a good way to closely manage your nest- egg and quickly apply for new accounts. But look to see if the platform charges an administration fee.’ Savings platforms make their money by taking a cut from the banks or building societies that offer accounts with them. Each platform has different providers listed at any one time. Currently, Hargreaves Lansdown has 12 providers listed and Raisin nearer 20. The products offered are mainly fixed-rate, where you lock up your money for a set period, but there are a few easyaccess accounts, too.
For example, through Raisin you can open a GB Bank easyaccess account which pays 3.7 pc, while Hargreaves Lansdown offers the Zopa Easy Access account at 3.52 pc.
However, these are slightly lower than the 3.85 pc you can currently earn by going directly to Secure Trust’s Access Account.
Check how your money is protected. If you choose UK banks or building societies on the savings platform, your money is covered by the Financial Services Compensation Scheme (FSCS). If you choose accounts from banks based in other European countries, they are protected by the European Deposit Guarantee Scheme.
The FSCS gives up to £85,000 of cover per person if a UK bank or building society fails. If you have money on a savings platform with two UK banks, you have £85,000 cover with each.
You should also check how any compensation would work if the platform’s cash hub should fail. For example, with Raisin that, too, comes under the FSCS.
With Hargreaves Lansdown your hub money is held with Barclays Bank. If the latter were to fail, it is protected by the FSCS. But if Hargreaves failed, it is covered by the Financial Conduct Authority’s safeguarding rules.