Cash to cover Vanguard charges

Chloe_G

I've just opened a Vanguard accumulation S&S ISA and it is suggesting that I add some cash to cover charges.  Do I need to do this?  (Particularly in the event it may lose value at this time?)  Many thanks.

dunstonh

Its normal to hold around 1-2% of your value in cash to pay the charges (plus another 18-24 months worth of withdrawals if you are taking an income).   Alternatively, hold a little less in cash and use income units.

If you don't do it, they will sell units to cover the charges.  

(Particularly in the event it may lose value at this time?) 

Nothing is happening at the moment which changes things.

eskbanker

You have a choice of how to pay your charges, as explained at https://www.vanguardinvestor.co.uk/content/documents/legal/key-features-isa-gia.pdf

You have the option, when you open your account or at any later time, to arrange payment of your account fee by direct debit from your nominated bank account. Alternatively, we will deduct the fee from available cash (and, failing that, from fund holdings) within your account in accordance with the disinvestment strategy set out in Vanguard’s Client Terms. 

SFindlay

Chloe_G said:

I've just opened a Vanguard accumulation S&S ISA and it is suggesting that I add some cash to cover charges.  Do I need to do this?  (Particularly in the event it may lose value at this time?)  Many thanks.

I wouldn't hold any cash as you will not earn interest on it. I set it up to.pay charges from my separate current account that way investments aren't decreased through paying charges and don't have cash sitting about earning nothing!!  

Albermarle

SFindlay said:

Chloe_G said:

I've just opened a Vanguard accumulation S&S ISA and it is suggesting that I add some cash to cover charges.  Do I need to do this?  (Particularly in the event it may lose value at this time?)  Many thanks.

I wouldn't hold any cash as you will not earn interest on it. I set it up to.pay charges from my separate current account that way investments aren't decreased through paying charges and don't have cash sitting about earning nothing!!  

It's a valid point , although for most people the cash amounts involved are usually peanuts compared to the investment holdings , so not a big deal .

lindabea

SFindlay said:

Chloe_G said:

I've just opened a Vanguard accumulation S&S ISA and it is suggesting that I add some cash to cover charges.  Do I need to do this?  (Particularly in the event it may lose value at this time?)  Many thanks.

I wouldn't hold any cash as you will not earn interest on it. 

Vanguard pay interest on cash balances, although it won't make much difference.  I think it's 0.25%

easterbunni

lindabea said:

Vanguard pay interest on cash balances, although it won't make much difference.  I think it's 0.25%

Not anymore...

https://www.vanguardinvestor.co.uk/need-help/answer/will-i-receive-interest-on-cash-held-in-my-account

Chloe_G

Thanks all; I will set it up to pay from my bank account .. thank you for pointing out where the info is!

SFindlay

lindabea said:

SFindlay said:

Chloe_G said:

I've just opened a Vanguard accumulation S&S ISA and it is suggesting that I add some cash to cover charges.  Do I need to do this?  (Particularly in the event it may lose value at this time?)  Many thanks.

I wouldn't hold any cash as you will not earn interest on it. 

Vanguard pay interest on cash balances, although it won't make much difference.  I think it's 0.25%

Vanguard don't pay any interest on cash not even 0.25!! 

NorthSeaKing

SFindlay said:

lindabea said:

SFindlay said:

Chloe_G said:

I've just opened a Vanguard accumulation S&S ISA and it is suggesting that I add some cash to cover charges.  Do I need to do this?  (Particularly in the event it may lose value at this time?)  Many thanks.

I wouldn't hold any cash as you will not earn interest on it. 

Vanguard pay interest on cash balances, although it won't make much difference.  I think it's 0.25%

Vanguard don't pay any interest on cash not even 0.25!! 

Actually they do....

But not anymore by the looks of it.

m_c_s

Vanguard have a  sterling short term money market fund (near cash) paying 0.6% typically, so 0.33% net.