Power up your money
These apps offer new ways to manage your savings and investments
All that cash sprayed at upstart fintechs over the past few years is finally finding its way into useful products. Some of these will probably fall by the wayside, so you shouldn’t bet the lot on any particular product I mention below, but they could offer easier, cheaper or novel ways to manage your savings and investments.
Starling Bank is head and shoulders above the other “neo-banks” with its banking functions (see MoneyWeek 1140), but its savings aren’t so strong. So I use Goldman Sachs’ Marcus app for short- to medium-term savings: it’s really just an instant access savings account wrapped up in an app and pays 2.5%. Chase offers 3% instant-access savings on top of a current account with cashback (see below). Kroo is a relative newbie that pays 3% on savings and (like Starling and Chase) zero fees on spending money abroad.
I also use Chip, which pays 3.05% instant access and has a prize account with a monthly grand prize of £10,000, plus smaller prizes. Chip is not a bank – it’s a payments institution that puts your money on deposit with UK banks. The deposits are protected if the bank fails, but there are certain worstcase scenarios – set out on Chip’s website – where money being moved would not be covered by the Financial Services Compensation
Scheme (FSCS).
Zero-commission investing
For share dealing, I rate Freetrade highly. It has zero-commission trading in 6,000 UK, US and
European stocks and exchange-traded funds (there is a 0.45% currency conversion fee). An individual savings account (Isa) and self-invested personal pension (Sipp) are available with a monthly fee.
IG’s dealing service and app is a serious rival, especially for US equities (no commission, 0.5% currency fee). For something simple, look at Dodl from AJ Bell, which lets users invest in a limited selection of shares, plus the AJ Bell managed funds. Its core market is people who want a cheap (minimum £1 fee a month) regular investment scheme.
The best new entrant I’ve seen in this market is Lightyear, which lets you trade a good number of foreign stocks (mostly US) for just a 0.35% currency fee. It has a simple interface and pays 3.25% interest on cash, but doesn’t offer an Isa. Lightyear is regulated by the UK Financial Conduct Authority, but is not directly authorised and is not FSCS protected. The parent is Estonian, which means cover up to the less generous European minimum of €20,000.
Finally, I’ve just started playing around with a brand-new alternative investment platform called Splint Invest that lets you buy and sell fractional stakes (“splints”) in collectables such as whisky, watches, wine, designer hand bags and even luxury cars. You can see details of how these assets are stored and the ownership certification, although I can’t attest as to how watertight these processes are. Splint is a Swiss firm so would not be covered by the FSCS, and alternative assets are generally not covered by investor protection schemes in any case.