Fidelity SIPP paying interest (don't get too excited)

cloud_dog

Just thought I'd share this (for what it is worth, not much TBH), but Fidelity are now paying 0.25% interest on any cash held in their SIPP. (told you not to get too excited).

A_T

before last week's bank rate rise I enquired with Vanguard as to what interest they paid on cash. To which I received the reply:

"With the Bank of England rate at 1.25%, Vanguard does currently pay 1.0% interest on cash held, this accrues daily and is paid monthly to your Vanguard account in arrears.

You will be able to see any interest under 'Transactions' > 'Cash statement'.

Please note that all holdings in your Vanguard account are subject to our 0.15% account fee, and this includes any cash that you hold. The account fee is calculated daily and charged quarterly."

I believe they also take 0.2% of the interest but even so I'm not aware of a SIPP provider that offers better terms when holding cash. It may be more now that base rate is up to 1.75%

Dazed_and_C0nfused

I believe they also take 0.2% of the interest but even so I'm not aware of a SIPP provider that offers better terms when holding cash. It may be more now that base rate is up to 1.75%

Do you mean you only really get 0.8%?

Albermarle

Dazed_and_C0nfused said:

I believe they also take 0.2% of the interest but even so I'm not aware of a SIPP provider that offers better terms when holding cash. It may be more now that base rate is up to 1.75%

Do you mean you only really get 0.8%?

They pay 1% interest but the platform fee is charged at 0.15%

but Fidelity are now paying 0.25% interest on any cash held in their SIPP. 

So I will now earn an extra 35p per year !

Dazed_and_C0nfused

But @A_T said "they also take 0.20%" as though that was separate to the 0.15% fee?

Or maybe I've got the wrong end of the stick 🤔

cloud_dog

I told you all not to get soooo excited.

It is a little conundrum TBH.  With our strategy, and being within a few years of R-date, I have retained approx 75% in cash.  Up until recently the 25% performance was more than adequate to keep track of the goals and stay ahead of inflation; not so much now.

cloud_dog

Dazed_and_C0nfused said:

But @A_T said "they also take 0.20%" as though that was separate to the 0.15% fee?

Or maybe I've got the wrong end of the stick 🤔

You are correct.  The two calculations are (obviously) separate.

They deduct 0.2% from the interest they pay (so 1% = 0.8%), and they also charge 0.15% on the entire investment pot.

Albermarle

cloud_dog said:

Dazed_and_C0nfused said:

But @A_T said "they also take 0.20%" as though that was separate to the 0.15% fee?

Or maybe I've got the wrong end of the stick 🤔

You are correct.  The two calculations are (obviously) separate.

They deduct 0.2% from the interest they pay (so 1% = 0.8%), and they also charge 0.15% on the entire investment pot.

OK so they take the base rate, 1.25% until recently, take off 0.25% to make 1% and then take off another 0.2% for some unknown reason. ( and then the platform fee)
Not sure of the logic from Vanguard  for taking 0.25%, and then another apparently random 0.2% ?

Dazed_and_C0nfused

Maybe it's Vanguard Tax 😳

cloud_dog

All I know is that the keep 0.2% of the interest they pay.  I don't know how closely they track to BoE base rate, or the timing of any tracking adjustments.

A_T

Albermarle said:

cloud_dog said:

Dazed_and_C0nfused said:

But @A_T said "they also take 0.20%" as though that was separate to the 0.15% fee?

Or maybe I've got the wrong end of the stick 🤔

You are correct.  The two calculations are (obviously) separate.

They deduct 0.2% from the interest they pay (so 1% = 0.8%), and they also charge 0.15% on the entire investment pot.

OK so they take the base rate, 1.25% until recently, take off 0.25% to make 1% and then take off another 0.2% for some unknown reason. ( and then the platform fee)
Not sure of the logic from Vanguard  for taking 0.25%, and then another apparently random 0.2% ?

they say 1% is the rate they get from their banks - lower than the BOE base rate