The best one-year fixed rate savings deal has hit 2.26 per cent but one simple trick enables savers to do already better.
Savers depositing £10,000 or more with Aldermore Bank’s 2.2 per cent deal, via Hargreaves Lansdown’s savings platform are eligible for at the minimum £20 cashback.
This method someone putting £10,000 into the account could effectively earn a one-year rate of 2.4 per cent.
A lesser known savings provider, BLME, is offering an already better one-year deal via the platform of 2.25 per cent – an effective rate of 2.45 per cent following a £10,000 place and securing the cashback.
Savings bump: Rates continue to rise – and a rise of platforms method another pillar of competition
Given that the best one-year deal on the market is currently offered by Al Rayan Bank paying 2.26 per cent, using Hargreaves’ platform consequently enables savers to leapfrog the best rate on the market.
It’s also worth noting that the platform is great number to the market leading 9 month fixed rate deal via Charter Savings Bank paying 2.05 per cent – effectively 2.25 per cent after depositing £10,000 and securing the cashback.
The return on the Aldermore account with £10,000 in it would equate to £240 after one year – that’s £110 more than from the top easy access rate at 1.31 per cent from Al Rayan.
With fixed-rate deals nudging higher, competition between challengers is fierce once more – and competition is also strong between savings platforms, meaning a continued stream of juicy sign-up offers.
Major savings platform rivals to Hargreaves Lansdown’s Active Savings Account include Raisin, Flagstone and AJ Bell’s Cash Savings center.
How to get this best buy savings rate?
There are no charges for setting up an Active Savings account. To qualify, savers need to open an account by 30 June this year, add at the minimum £10,000 by debit card and choose their savings product within 60 days.
The amount of cashback received depends on how much is put in. For example, those putting in £10,000 will obtain £20, whilst those putting in £80,000 or more will obtain £100.
The biggest percentage point rate raise on savings comes at £10,000.
If a balance drops below the cashback qualifying amount within six months Hargreaves Lansdown may reclaim the cashback.
Is your money protected?
If a bank or building society used via the platform goes into administration, the FSCS will protect money up to £85,000 per banking licence.
Any money paid into an Active Savings account goes into the cash center where it keep until a savings product is chosen.
|You pay in||Cashback|
|£10,000 – £19,999||£20|
|£20,000 – £29,999||£30|
|£30,000 – £49,999||£40|
|£50,000 – £79,999||£50|
|£80,000 or more||£100|
Money held in the cash center is also protected by the FSCS up to £85,000 per person as it is safeguarded in an account with Barclays.
One advantage of having cash in a platform is the FSCS protection that is given to each individual banking licence. By spreading money around but keeping it in one place savers can maximise the protection that this affords.
Anna Bowes, co-founder of Savings Champion says: ‘As the platform is a portal to allow you to access more than one savings provider without making multiple applications, this method that you can also make use of the protection that the FSCS has to offer, with each different bank you use on the platform.
‘But it’s also important to understand that if you also keep up money with that provider either directly or via another platform, it is the total amount held via all channels that is important – you don’t get a separate FSCS allowance via each method that you have deposited your money.’
This method, if you open a fixed rate bond with £85,000 with Aldermore via the Hargreaves Lansdown platform and you already keep up a bond for £50,000 with Aldermore that you took out directly, £50,000 will not be protected by the FSCS, as the amount per banking licence that is protected is £85,000 per person.
What is a savings platform?
A savings platform can help savers keep track of their accounts more easily and move money into better rates after signing up.
They might not always offer the best rates on the market, but allow you to manage multiple accounts in one place.
It method that by a single online account, you can open multiple savings accounts with numerous different edges as and when you require without the usual form filling and admin.
Sometimes, they have sign-up bonuses or referral schemes that can help raise rates to make them better than what is on offer in other places.
> Read our guide to savings platforms and the best rates
What about other savings platforms?
Rivals to Hargreaves Lansdown’s Active Savings Account include Raisin, Flagstone, AJ Bell’s Cash Savings center, Akoni and Aviva Save.
Hargreaves Lansdown is the only one currently offering a cashback or bonus reward for signing up.
Although the rates on offer via other platforms are competitive they don’t match the Hargreaves Lansdown platform when the cashback bonus is taken into consideration.
Although the savings platform Flagstone is offering a five year fix paying 2.8 per cent, which is higher than Hargreaves Lansdown.
However, with Flagstone, there is an annual management fee of between 0.15 per cent and 0.25 per cent each year depending on the value of deposits held on its platform.
Find out more about what deals competitor savings platforms offer here.
|Barclays one-year fix||0.3%|
|HSBC one-year fix||0.45%|
|Halifax two-year fix||0.4%|
|Lloyds Bank two-year fix||0.4%|
|Santander one-year fix||0.6%|
|TSB one-year fix||0.25%|
What about big edges?
Currently, no big edges characterize in our best buy tables.
In fact, none get close to offering a competitive return on one or two-year fixed rate deals.
For example, someone saving via Barclays bank’s one year deal will be on 0.3 per cent.
That’s close to eight times less than eight times less than the best deal on Hargreaves Lansdown’s platform.
Fixing with the big edges will prove equally as futile. For example, the best two-year fix with Lloyds or Halifax is 0.4 per cent.
Opt for the best rate on the Hargreaves platform and you could earn 2.5 per cent.
THIS IS MONEY’S FIVE OF THE BEST SAVINGS DEALS
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