Money market funds in NISA

ozzage

Previously, money market funds were not (as I understand it) valid for S&S ISAs as they broke the ISA rules by virtue of the way they were invested.

With the NISA rule changes, does anybody know if this is still the case? Could we see money market funds now becoming available as an alternative to holding zero-interest cash with the platform?

Edit: Bloody hell having just looked at the returns on some lately it would hardly be worth the effort (one was even negative in the last 12 months), but still the question stands.

IronWolf

I believe they are now allowed as the restriction on short dated bonds has been lifted.
But there isn't much point at the moment as interest rates are dire.

jamesd

Both the 5% test and the minimum 5 years to redemption for bonds have been eliminated so it's now permitted. That also allows retail bonds to be held, since these are often of less than five years term.

S&S to cash ISA transfers are now allowed and that may sometimes be a way to go to get better rates.

HMRC has produced a NISA FAQ that answers many questions.