A temporary haven for cash

cloud_dog

Albermarle said:

cloud_dog said:

Albermarle said:

Adyinvestment said:

Last time I checked Vanguard do give some interest on cash balances, might be worth checking what it is at the moment.

2% minus a fee minus platform charge, so I think about 1.65% net, which is better than their main rivals.

Vanguard do confuse me a little as to whether they charge the platform fee on the whole account value or whether they exclude charges for cash.

On their fees page, for Cash Balances --> Service Fee, they state:

"We don't currently charge a service fee for holding your cash - but we do keep up to 0.20% of any interest we receive on your cash.  This is to cover our banking costs."

So based on this you might get 1.8% (2% minus 0.2%).

BTW @Albermarle , can you confirm where you sourced the information for them paying (currently) 2%?  I've not been able to locate anything confirming a 'current rate', whenever I have tried to find it.

It was from another thread recently where the poster had actually called Vanguard to double check. I took this at face value.

I have very recently transferred a SIPP in to Vanguard (due to me holding c.75% in cash), and based on receiving a interest credit today (transfer in receipted on 26 Sept), I believe they are actually paying 2% interest (based on my calculation).  Whether this means they are receiving 2.2% on the money, or whether I will receive a further deduction (platform fee, plus an entry for the 0.2%) I am unsure until all is completed (charges).  But, based on the wording they use ("keep up to 0.2% of any interest they receive"), I am going to assume they are actually paying 2% net on cash balances.

adindas

cloud_dog said:

I have very recently transferred a SIPP in to Vanguard (due to me holding c.75% in cash), and based on receiving a interest credit today (transfer in receipted on 26 Sept), I believe they are actually paying 2% interest (based on my calculation).  Whether this means they are receiving 2.2% on the money, or whether I will receive a further deduction (platform fee, plus an entry for the 0.2%) I am unsure until all is completed (charges).  But, based on the wording they use ("keep up to 0.2% of any interest they receive"), I am going to assume they are actually paying 2% net on cash balances.

Adyinvestment said:

Last time I checked Vanguard do give some interest on cash balances, might be worth checking what it is at the moment.

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

"Will I receive interest on cash held in my Personal Pension?

Cash balances held within your Personal Pension will earn interest at a variable rate, based on the rate we receive from the bank.
Currently we keep the first 0.2% of the interest we receive, to cover our costs.
Where payable, interest is earned daily and normally paid into your account on the first business day of each month. Please see ‘The Vanguard Personal Pension Key Features Document' for further information."

cloud_dog

adindas said:

cloud_dog said:

I have very recently transferred a SIPP in to Vanguard (due to me holding c.75% in cash), and based on receiving a interest credit today (transfer in receipted on 26 Sept), I believe they are actually paying 2% interest (based on my calculation).  Whether this means they are receiving 2.2% on the money, or whether I will receive a further deduction (platform fee, plus an entry for the 0.2%) I am unsure until all is completed (charges).  But, based on the wording they use ("keep up to 0.2% of any interest they receive"), I am going to assume they are actually paying 2% net on cash balances.

Adyinvestment said:

Last time I checked Vanguard do give some interest on cash balances, might be worth checking what it is at the moment.

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

Yes, but the question we have not been unable to find the answer to online is what interest rate are they currently paying?  A poster has previously confirmed by speaking with Vanguard the rate, reportedly as 2% but it was unclear if this was the net or gross percentage received by account holders.

The only online documentation I could find from Vanguard was dated back in February and confirmed a rate of 0.25%, not unreasonable considering that was before all the raising base rates started in earnest.

Secret2ndAccount

wmb194 said:

Directly owned short dated gilts i.e., not via an ETF.

https://markets.ft.com/data/bonds

How do I buy these products? If I click 'Buy Bonds' in my SIPP, I don't see anything like these rates offered.

wmb194

Secret2ndAccount said:

wmb194 said:

Directly owned short dated gilts i.e., not via an ETF.

https://markets.ft.com/data/bonds

How do I buy these products? If I click 'Buy Bonds' in my SIPP, I don't see anything like these rates offered.

Well, it could be that your Sipp provider doesn't deal in them - which one? - but have a look through the linked. You can click through and find the tickers. They're usually TRxx or TNxx where 'xx' signifies the year in which they mature e.g., TR25, TN24.

Or perhaps you're misunderstanding yield to maturity?

https://www.hl.co.uk/shares/corporate-bonds-gilts/bond-prices/uk-gilts?column=price&order=asc

GazzaBloom

Goes into store where everything is on sale with £100K in his pocket but doesn't want to buy anything! Asks the shopkeeper if he can hold onto his cash in the till for a while and he will be back later when the prices go up. 

If it were my money and I had no immediate need to spend it I would drip feed into a low cost equity index fund £5-£10K a month.

Opportunities to buy into the stock market at these reduced prices don't come around too often and while trying to time the bottom is folly, a bottom will be reached eventually which is why I would drip feed in against the declining market.

Albermarle

GazzaBloom said:

Goes into store where everything is on sale with £100K in his pocket but doesn't want to buy anything! Asks the shopkeeper if he can hold onto his cash in the till for a while and he will be back later when the prices go up. 

If it were my money and I had no immediate need to spend it I would drip feed into a low cost equity index fund £5-£10K a month.

Opportunities to buy into the stock market at these reduced prices don't come around too often and while trying to time the bottom is folly, a bottom will be reached eventually which is why I would drip feed in against the declining market.

Nice to see a post actually about investing rather than about fixed rate savings accounts, which seem to be flavour of the month on this forum at the moment !

fudgel

cloud_dog said:

adindas said:

cloud_dog said:

I have very recently transferred a SIPP in to Vanguard (due to me holding c.75% in cash), and based on receiving a interest credit today (transfer in receipted on 26 Sept), I believe they are actually paying 2% interest (based on my calculation).  Whether this means they are receiving 2.2% on the money, or whether I will receive a further deduction (platform fee, plus an entry for the 0.2%) I am unsure until all is completed (charges).  But, based on the wording they use ("keep up to 0.2% of any interest they receive"), I am going to assume they are actually paying 2% net on cash balances.

Yes, but the question we have not been unable to find the answer to online is what interest rate are they currently paying?  A poster has previously confirmed by speaking with Vanguard the rate, reportedly as 2% but it was unclear if this was the net or gross percentage received by account holders.

The only online documentation I could find from Vanguard was dated back in February and confirmed a rate of 0.25%, not unreasonable considering that was before all the raising base rates started in earnest.

Ever since I opened a Vanguard account (SiPP & ISA) in March of this year, the Vanguard net interest rate has tracked the latest Bank Of Engalnd rate  ---- minus 0.4%.

Gross Interest of 2.2%

Net Interest of 1.85% (minus 0.2% costs & 0.15% quarterly account fee).

westy22

valiant24 said:

Adyinvestment said:

Last time I checked Vanguard do give some interest on cash balances, might be worth checking what it is at the moment.

The SIPP platform is AJ Bell and they don't pay interest on cash balances.  So it would have to be some other provider's ETF if it's going to happen at all.  In my mind Vanguard had some such in the past.

Yes they do - but not much !
https://www.youinvest.co.uk/sipp/charges-and-rates