HL Active Savings Account

Zanderman

An interesting concept from Hargreaves Lansdown, offering an "Active Savings account' where, with one login, you can save cash in a variety of fixed interest accounts with other banks.

Seems to be a new trend, similar to Raisin (but without the joining incentive). Probably not for everyone but potentially useful if you don't like the hassle of opening multiple accounts yourself:

https://www.hl.co.uk/investment-services/active-savings

ColdIron

I've been keeping an eye on this since HL floated the idea a year or so ago. It would be a great idea for ISAs, and particularly SIPPs, where there could be significant amounts of uninvested cash earning little interest with barriers to removal (loss of ISA status, tax on withdrawals etc)

However you can only deposit from your debit card or a Fund and Share account (where it is trivial to withdraw anyway) so it's best to consider it as a standalone product rather than something to supplement your investment strategy

C_Mababejive

Ive given it a cursory glance but my initial impression is that the rates are nothing special.. meanwhile HL rake in a nice commission.

Zanderman

C_Mababejive wrote: »

Ive given it a cursory glance but my initial impression is that the rates are nothing special.. meanwhile HL rake in a nice commission.

Yes, there's nothing there you can't get elsewhere, and yes the rates are not brilliant.

But, to be fair to HL, they aren't claiming it to be anything else. The rates are the sort of rates you get for fixed rate savers - not what you can get if you're more imaginative but exactly* what you'd get if you didn't want to go to much trouble. And it's targeted at people who don't want to go much trouble.

I think its got potential - not for me - but not to be dismissed either. It's a shame they aren't offering some sort of incentive like Raisin do for a similar system. As you say they do acknowledge they get a commission (from the bank concerned, not from your investment), but they keep it all!

*actually although the rates they show at present do seem to be exactly what you can find with the same banks yourself (certainly for those I checked just now) they do suggest their cut might mean the rates could be different, In other words they may (in future) offer lower interest rates than you could get with the individual bank direct.

Alexland

If HL could offer those rates in their SIPP or ISA wrapper it would be interesting but otherwise I am giving it a miss.

Cash-Strapped.T32

I'd been wondering if anyone was going to post about this also...
Same as Alex & others, I'd be all over this if you could hold real actual interest-earning cash in either a SIPP or (L)ISA.


However as the best you're going to see if around the 2% mark, and it's standalone, I'd rather keep the bit of long-term cash I do have in my cash H2B isa.

londoninvestor

Zanderman wrote: »

*actually although the rates they show at present do seem to be exactly what you can find with the same banks yourself (certainly for those I checked just now) they do suggest their cut might mean the rates could be different, In other words they may (in future) offer lower interest rates than you could get with the individual bank direct.

When they first announced this, their rates were way below market (probably 50-60bps below the best buys from what I remember). Which made no sense as an offering - if you know enough to be aware of HL as an outfit, then you know enough to find the best savings rates out there.

As you say, it's more competitive now, and offers a fair amount of convenience if it cuts out the account opening steps you'd otherwise go through with each individual bank.

Curiously, HL did in the past (way before this service) offer fixed rate deposits for your SIPP cash, but those seem to have gone away now.

bxboards

londoninvestor wrote: »

When they first announced this, their rates were way below market (probably 50-60bps below the best buys from what I remember). Which made no sense as an offering - if you know enough to be aware of HL as an outfit, then you know enough to find the best savings rates out there.

The circle I can't square is why anyone who knows and uses H-L would want to 'save' at below inflation rates?

I can see if it could be ISA wrapped maybe this would be slightly more appealing, but as it stands? Can't see it. Raisin essentially had to pay people 50 quid to sign up to their similar scheme....

I also smile when they claim 'Our clients told us they don’t have time to chase the best rates' - they never asked this client. Why on earth would you tell a company this? Only way to get an answer like this is to ask a leading question. It's bullocks.

bowlhead99

bxboards wrote: »

...

I also smile when they claim 'Our clients told us they don’t have time to chase the best rates' - they never asked this client. Why on earth would you tell a company this? Only way to get an answer like this is to ask a leading question. It's bullocks.

This may not refer to a specific "customer survey", just an inference from simple observation.

By the fact that they have hundreds of thousands of customers despite having the highest percentage-based platform fee in the country, the clients are implicitly telling them that they don't have time to chase the best rates. If they did have plenty of time (and inclination) to learn about competing services and look up the most attractive rates in town, and bother to switch, the HL customer base would not be what it is today!

I can see it's a service some might like and why HL would offer it. Every day we get someone on here saying they are nervous about the state of the market and might prefer to switch to cash. Such thoughts will only get greater when markets actually properly fall for a change rather than simply level off, which is an inevitability. But as interest rates rise, HL can't entice people to stay by offering 0.1% on cash, so people 'cashing out' will take their money off platform. And once money is no longer with or through HL, it's much harder for HL to get it back, as the platform market for a customer looking to move cash to investments, is competitive.

So, not very surprising that HL would eventually offer some sort of cash storage solution. Savings and investments through the same middleman makes some sort of sense as people are looking for account info aggregation tools and would prefer one login for everything.

bxboards

bowlhead99 wrote: »

By the fact that they have hundreds of thousands of customers despite having the highest percentage-based platform fee in the country, the clients are implicitly telling them that they don't have time to chase the best rates.

H-L will drop their platform fees to 0.25% pretty much at the drop of a hat if you ask.

I find them excellent value coupled with their low cost trackers, once you are on the 0.25% rate.

Zola.

bxboards wrote: »

H-L will drop their platform fees to 0.25% pretty much at the drop of a hat if you ask.

I find them excellent value coupled with their low cost trackers, once you are on the 0.25% rate.

Thanks!

I have just emailed HL asking for a reduction as all our funds are in vanguard. Lets see what they say...