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The Independent
6 days ago
- Business
- The Independent
Best savings accounts and cash Isas for your money after interest rate changes
With interest rates heading slowly downward across 2025, it remains vital to ensure your money is working hard for you. Making sure your savings account has a high rate of interest is important for two reasons: one, it earns you more cash across the year, and two, it gives you a better chance of preserving the real value of your money - which is eroded through inflation. Given inflation remains higher than the government's 2 per cent target - it rose to 3.5 percent in April - you should take the time to scan for the best available rates and put your money somewhere above this. The Bank of England's base rate is currently 4.25 per cent. There are plenty of such accounts right now so make the most of them and grow your savings, whether in a cash Isa, an easy-access account or a fixed-term deal. Best cash Isa accounts A cash Isa is just like any other savings account, but you don't pay any tax on interest earned, there's currently a £20,000 personal allowance to deposit funds in each year and some companies may have different restrictions or points to be aware of, such as bonus interest rates which last for only a few months. The top rate in this area right now is with Moneybox, who are offering 5.46 per cent on your money - but that includes a 1.51 per cent bonus which lasts for three months. The minimum balance is £500 and you can have three withdrawals a year without impacting the rate you get. After that, a host of places are offering a little under the 5 per cent mark. Plum are offering 4.85 per cent for new customers which includes a bonus rate if you keep your account for a year, while Chip 's 4.82 per cent Isa drops to 4.06 per cent (variable) after 12 months. The best non-bonus rate is from Tembo, who offer 4.8 per cent with unlimited withdrawals. Always check rules around withdrawals before opening any Isa product to ensure it suits your needs and remember putting money into a cash Isa counts towards your overall Isa allowance, which could include stocks and shares investing accounts, Lifetime Isas or other products. Best easy access savings accounts If for any reason you don't want or cannot use an Isa, an easy access account should be your next port of call if you need to be able to call upon your money at short notice. Right now, plenty of banks and building societies are offering rates above 4.5 per cent - but again, check the terms of each account suit your expected needs. For example, Atom Bank are offering the highest rate of 4.75 per cent, though if you make a withdrawal from the account in any given month, you'll instead get 2.5 per cent. This is to encourage regular saving, ideal for those who need to build a safety pot or have a specific goal in mind. Beyond that, rates are comparable between Snoop (4.6 per cent), Chip (4.56 per cent), Cahoot (4.55 per cent) and Coventry Building Society (4.5 per cent). Most have minimum deposits to open and run the account, but this can be from £1 in some instances. It's also worth noting that many banks have savings accounts accessible only if you are already a current account customer - and these can be rewarding with higher interest rates of up to 7 per cent. However, you can often only save a fixed amount per month, such as £300. Fixed term accounts If you have money you'd like to lock away for a longer period, perhaps to avoid accessing it to spend or because you know you'll need it on a particular date down the line, a fixed-term bond might be ideal. The drawback, aside from no access to the cash, is that if interest rates go higher, you'll be earning the same rate you accept - and with not much difference between fixed deals and easy access right now, you might therefore miss out. On the other hand, if rates continue to drop, you'll be guaranteed the fixed rate for your entire term. Looking at 12-month bonds, Hampshire Trust Bank is leading the pack by a slight amount with their 4.45 per cent offer; interest in this type of account tends to be paid at the end of the term, with no withdrawals allowed and both minimum and maximum amounts allowed - in this case, from £1 to £250,000. There are a shed-load of banks and building societies offering between 4.3 and 4.4 per cent, with slightly different rates depending on your deposit amount, the brand name you prefer and other terms within each account. Some include: Rates are always subject to change but are correct at publish date. Always ensure the account is right for your needs - and most of all, make sure your money is working for you!
Daily Mail
02-06-2025
- Business
- Daily Mail
Savers rush to cash stuff their Isas with a record £14bn pouring into tax-free accounts in just one month
Savers deposited a record amount in cash Isas during April as rumours swirl of a possible cut to tax-free allowances for cash Some £14billion was placed in cash Isas during the period, the highest figure for any month since Isas were introduced in 1999, according to data from the Bank of England. Rachel Reeves is set to launch a review of the Isa market within weeks, with the Treasury preparing a consultation with City firms on possible Isa reforms. These possible reforms come as the Government looks to 'boost the culture of retail investment' and push savers away from holding large sums of cash. And with that warning, it seems Britons are taking advantage of being able to max out the cash element of Isas for potentially one last time by stuffing as much as possible into the tax-free accounts. Laura Suter, director of personal finance at AJ Bell, said: 'Reports the Chancellor is considering cutting the cash Isa allowance have created a sense of scarcity, creating a 'use it or lose it' mentality among consumers. 'The threat of a cut to the allowance is likely to be a spur to action for many, especially given the relentlessly rising tax tide.' However, Mark Hicks, head of active savings at Hargreaves Lansdown said the figure is likely partly as a result of the end of the tax year, as savers shift their money from taxable accounts into Isa wrappers to make use of their refreshed allowance. He said: 'The level of withdrawals from easy access savings seems to indicate a significant proportion of Isa savings has come from people withdrawing from savings and ploughing the money into their Isa equivalents at either end of the tax year, to take advantage of the tax saving.' Rumoured cuts to the cash Isa allowance first emerged earlier this year after city bosses lobbied the Chancellor to cut allowances to just £4,000. In February savers ploughed £3.6billion into their cash Isas following the news. No changes to allowances were announced in the Spring Statement, but it was revealed the Treasury would consider reforms to the allowances in order to 'get the balance right' between cash and investments. Suter added: 'Encouraging more people to invest for the long term is a laudable and sensible aim, not just to boost the economy but to help people leverage the power of the stock market to meet their long-term financial goals. 'But the Government should look beyond cutting the cash Isa allowance, which is unlikely to do anything to change people's attitude to investing.' The investment platform warned that just a fifth of savers would invest more money into the UK stock market if the Government cut cash allowances, with more than half expected to simply move their money to taxable savings accounts instead. However, AJ Bell says the savings push may also have been a result of higher interest rates over recent months.
Daily Mail
27-05-2025
- Business
- Daily Mail
Boost your cash Isa rate with tweaks that won't cost you a penny: SYLVIA MORRIS
The cash Isa is now a better product for savers than it has been in its 26-year history – but few of us use them to their full advantage. Just a few simple tweaks in the way you save can seriously boost the interest you receive without having to put aside a penny more. For example, many don't take advantage of the flexibility that Isas now offer, which means you can withdraw cash and add it to your balance within the same tax year without it eating away from your allowance. That flexibility means you don't have to restrict yourself to depositing money that you are sure you won't need to access – you can even put in money that you are likely to need safe in the knowledge that you can withdraw and replace it again with ease. You can also have multiple Isas within the same tax year – so long as you don't exceed your overall allowance. But many savers do not take advantage and instead limit themselves to one Isa per year, which means they may not be getting the best rates overall. It's not surprising that many miss out. Only around half of the top Isa payers offer flexibility and often make it hard to find out whether they do – hiding it in pages of terms and conditions. Among those offering flexibility are Trading 212, Ford Money and Vida Savings. Providers that let you open more than one include Aldermore, Charter Savings Bank, Nationwide, Newcastle, Paragon, Vida Savings and Zopa. I'd urge you to enjoy the flexibility and freedoms that the current rules afford you while you can. After all, after years of simplifying the Isa to make it more user friendly, the Government seems intent on reversing progress and making them more restrictive once again. Chancellor Rachel Reeves looks set to cut the cash Isa allowance so that you can save just £4,000 of your £20,000 allowance in cash – with the remainder in shares. Banks, building societies and the Daily Mail's Hands Off Our Cash Isas campaign are fighting your corner to keep the allowance intact – but the Chancellor has failed to promise that cash Isas are safe. Eleven years ago on July 1, 2014, the Treasury said it was making the cash Isa 'a new simpler product'. It did this by giving us a single Isa allowance that we could split how we choose – putting it all into cash or shares or a combination of both. Before then you could only put half the allowance into cash and if you didn't want to invest in shares you just lost that part of the allowance. Flexibility and the ability to open multiple Isas has improved the product since. What a great shame that we're about to go into reverse. Nationwide to pay fresh £100 bonus Tomorrow, Nationwide reveals how it did in its last financial year to the end of March. Our largest building society is expected to have done well enough to announce another £100 Fairer Share payment for this year to eligible members. It comes on top of the £50 'thank you' payment that went out to 12 million members after its takeover of Virgin Money last October. We will also learn exactly who qualifies. Last year, many savers and mortgage holders missed out because they didn't have a current account with Nationwide. Virgin Money customers will miss out, even though they have been owned by Nationwide since the autumn, because they are not members of the society.
Times
23-05-2025
- Business
- Times
Cutting cash Isa limit would be a mistake, says AJ Bell boss
Cutting the amount that people can save in a cash Isa would be short-sighted and fail to achieve the government's aim of boosting the stock market, the boss of one of Britain's biggest DIY investment platforms has warned. Michael Summersgill, who runs the FTSE 250 wealth manager AJ Bell, said on Friday that he was strongly opposed to the idea of reducing the £20,000 annual tax-free allowance for cash Isas, arguing that such a move 'won't change people's behaviour'. There has been mounting speculation that ministers are poised to shake up the savings regime in an effort to encourage more of the public to put cash into Britain's faltering stock market. Rachel Reeves, the chancellor, has signalled that she is keen on reform, and said
Daily Mail
20-05-2025
- Business
- Daily Mail
We want to make investing less scary: Trading 212 boss Ivan Ashminov gives a rare media interview
By any measure, Trading 212 is one of the biggest savings and investment platforms in the UK – but you wouldn't know it. It has just surpassed 4.5 million customers – more than established rivals Hargreaves Lansdown, AJ Bell, Interactive Investor and Vanguard combined. Every day it signs up more customers than any of them – with accounts that can be opened with as little as £1 and its offer of commission-free trading (Hargreaves Lansdown, by comparison, charges up to £11.95 to buy and sell shares). Only a year after it launched its cash Isa, it is already the biggest cash Isa service in the UK, with 765,000 of the tax-free accounts now open on the platform. That's no doubt due to its top easy-access cash Isa rate, which is regularly the most generous on the market (it currently offers 4.1 per cent). And it has just passed a major milestone – it now has a hefty £25 billion in assets under administration. But despite its meteoric growth, Trading 212 is still not taken seriously by many. Sceptics question how it makes money and are unclear about the company's origins. Trading 212 is UK-based but founded in Bulgaria with offices in Cyprus, Germany and Australia. While other investment firms lobby and are courted by the Government, network, write open letters to the regulator, have billboards and are regularly the source of interviews and briefings, Trading 212 has been noticeably quiet, which has made some would-be investors nervous. Today, Trading 212 co-founder Ivan Ashminov, 45, gives his first media interview for years – and lifts the lid on the company's plans to democratise investing further. 'You are the first media person I'm speaking to and that we as a company are opening up to since the early days when we decided to introduce zero-commission investing,' says Ivan, speaking from his unassuming office a stone's throw from the Bank of England. 'When we launched zero-commission investing in 2017 and said we are going on a mission to democratise investing, I don't think anybody was particularly interested in the company, so maybe they didn't take us very seriously. We decided, let's focus 100 pc of our energy on just the product – build, deliver.' And that's what Trading 212 has done: grown while staying lean (it still has just 130 employees in the UK), and kept up a conversation with its customers. But in the last few months, things have changed. The Government has become increasingly vocal about its ambition to get more people in the UK investing – an area in which Trading 212 believes it has the expertise to contribute. Take, for example, a limit on the cash Isa allowance. On Monday, once again Chancellor Rachel Reeves raised fears that the limit could be cut from a maximum of £20,000 per tax year when she said money is put into cash ISAs that could make a better return if invested in the stock market. Ivan believes curbing the cash Isa limit would be a mistake. 'Cash is an essential tool for some people,' he says. 'If the limit is reduced, the backlash will be tremendous. These people are not going to move to stocks overnight. They will just move to other savings accounts and receive less money.' If the aim is to get more people investing, there are plenty of better options. One is making investing sound less scary. 'If you look at investing adverts, the risk warnings read like we're selling a medical product,' says Ivan. 'Kids can buy the most sugary product that is clearly not good for your health with no warning, and yet look what we have to say just to promote a vanilla investment product.' He adds that removing stamp duty on UK shares would help. But despite his experience, Ivan is still not being invited to share it. 'Unfortunately, nobody invites us to the table,' he says. 'It's a bit like not inviting Amazon in the early days, when you want to have discussion about e-commerce. Maybe it's because we don't promote ourselves as a company.' Maybe it's also the way the company has grown – from scratch and with little fanfare – that has created wariness among some. Ivan and his co-founder Borislav Nedialkov started the company in 2004 in their hometown of Sofia, Bulgaria, with just a few hundred pounds earned from coding for other companies. 'I was 21 and then, you had to make your own future, otherwise there's nothing,' says Ivan. 'I didn't have my own room – I shared with my older sister – so I had to do something with my life. I thought, what can I do? I can write code, because I've been a computer geek since 13 years old.' Ivan bought the domain name Trading 212 for £10 and for months worked seven days a week coding to create the first version of the investing platform. 'I knew I wanted 'trading' in the name, but all of the other key words had been taken, so I thought I'd add a number, which went against the grain at the time,' he says. He chose '212' because it was the dialling code for New York where all the big banks were – and at the time he was wearing the Carolina Herrera aftershave called 212. Perhaps another reason that Trading 212 has been treated with caution is that it makes money from offering Contracts For Difference (CFDs) which are high-risk financial products that allow traders to speculate on price movements of assets without owning them. He says: 'This was probably the major source of scepticism for everyone at the beginning because they were too focused on our origins in CFDs. But we don't advertise them except for very targeted search terms and we have created this Chinese wall around the accounts so CFDs are a separate account.' Critics have questioned 212's commitment to best outcomes for investors when it offers instruments such as CFDs that more often than not lead to losses. Ivan says: 'CFDs allowed us to build this, right – obviously, since we didn't take external funding. It allowed us to start this journey. In terms of percentage of our revenue, they're becoming a smaller part of it – still significant.' So what's next? Firstly, Trading 212 is launching a Self-Invested Personal Pension (SIPP). This, too, will be commission-free. But perhaps the biggest transformation will come from its use of AI. Trading 212 is working on tools that will allow you to analyse your portfolio in a way that until now has been accessible only to the likes of hedge fund traders. Plus, Ivan sees a time when AI will be able to help investors with their financial planning. 'You will have a tool that will know your financial circumstances and goals better than anyone else, and it will provide you a context to make your own decisions better than any human advisor.' Beyond this, Ivan is also planning to add actively-managed funds for its new Sipp investors – and is considering bringing financial advisers in to its chat forums. Now it has broken cover, will Trading 212 finally be invited to the table?
