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  • Swipe
    Swipe Posts: 5,606 Forumite
    Part of the Furniture 1,000 Posts Photogenic Name Dropper
    How quickly will Vanguard increase their interest rate on cash currently about 3.1% to about 3.6%, following today`s base rate increase?
    With immediate effect. It tracks the BOE base rate
  • NedS
    NedS Posts: 4,485 Forumite
    Fifth Anniversary 1,000 Posts Photogenic Name Dropper
    edited 3 February 2023 at 12:10AM
    peterpies said:
    NedS said:
    peterpies said:
    jimjames said:
    peterpies said:
    Hargreaves Lansdown is looking a better option for me, even with their higher fees. I spend a certain amount of time out the market.

    If rates drop, I can always transfer out.
    I'm curious why HL are looking a better option with their higher fees?
    Without going into detail, I spend time out of the market. HL pays interest on cash, which is more than their higher fees, especially with the current sign on bonus.

    I will at some point in the near future need to open a second account to minimize platform risk, HL are the 'only' other broker who allow expats to buy and sell on existing accounts without forcing closure. I am semi planning to become expat in the future, which may or may not happen.
    I'm using a money market ETF on HL that tracks Sonia (which closely tracks BoE base rate). Have been getting ~3.45% so expecting that to rise to close to 4% now, and no additional fees as I'm already at HL's capped monthly fees. About twice the rate HL are paying on cash - you can guarantee HL will be getting close to 4% on your cash but are only passing on half of it. At least Vanguard are being a little more generous.



    What's the name of the ETF? I'll look into it.

    I would never use Vanguard, as I buy UK shares.

    I currently use CSH2 (other ETFs are available). Not a recommendation. You will need to consider trading fees and bid/offer spreads.
    There are a range of Short Term Money Market funds available too, for those who prefer OEIC funds (including an offering from Vanguard) that should also track BoE base rate:

  • drob4
    drob4 Posts: 153 Forumite
    Part of the Furniture 100 Posts

    From the Vanguard site:

    Changes to the interest we pay you From 20 February we will be changing the way we pay interest. Rather than paying you a variable rate, we’ll pay you a fixed rate of 1.95%. 

    We’ll keep any extra interest we receive on your cash above the 1.95% we pay you. 

    We’ll review this regularly to make sure the amount of interest you receive is fair and offers good value.

  • ForumUser7
    ForumUser7 Posts: 2,441 Forumite
    1,000 Posts Second Anniversary Photogenic Name Dropper
    drob4 said:

    From the Vanguard site:

    Changes to the interest we pay you From 20 February we will be changing the way we pay interest. Rather than paying you a variable rate, we’ll pay you a fixed rate of 1.95%. 

    We’ll keep any extra interest we receive on your cash above the 1.95% we pay you. 

    We’ll review this regularly to make sure the amount of interest you receive is fair and offers good value.

    Oh, well this was short-lived
    If you want me to definitely see your reply, please tag me @forumuser7 Thank you.

    N.B. (Amended from Forum Rules): You must investigate, and check several times, before you make any decisions or take any action based on any information you glean from any of my content, as nothing I post is advice, rather it is personal opinion and is solely for discussion purposes. I research before my posts, and I never intend to share anything that is misleading, misinforming, or out of date, but don't rely on everything you read. Some of the information changes quickly, is my own opinion or may be incorrect. Verify anything you read before acting on it to protect yourself because you are responsible for any action you consequently make... DYOR, YMMV etc.
  • lindabea
    lindabea Posts: 1,530 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    tunde10 said:
    drob4 said:

    From the Vanguard site:

    Changes to the interest we pay you From 20 February we will be changing the way we pay interest. Rather than paying you a variable rate, we’ll pay you a fixed rate of 1.95%. 

    We’ll keep any extra interest we receive on your cash above the 1.95% we pay you. 

    We’ll review this regularly to make sure the amount of interest you receive is fair and offers good value.

    This is why it's sometimes best to keep these things quiet and not reveal it to the masses.

    Its no coincidence Vanguard decided on this move after more people became aware.
    No - I don't believe that Vanguard would reduce the interest rate for the reason you gave.  As already been mentioned, it makes no difference to them whether the money is invested or held in the cash account.  They still charge the same amount of 0.25% platform charge.  In fact, they earn more from investors who keep money in the cash account due to the extra commission fee from the interest earned. 
    Before doing something... do nothing
  • fabsaver
    fabsaver Posts: 1,305 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    drob4 said:

    From the Vanguard site:

    Changes to the interest we pay you From 20 February we will be changing the way we pay interest. Rather than paying you a variable rate, we’ll pay you a fixed rate of 1.95%. 

    We’ll keep any extra interest we receive on your cash above the 1.95% we pay you. 

    We’ll review this regularly to make sure the amount of interest you receive is fair and offers good value.

    My transfer to Vanguard just completed today. Looks like I'll be transferring back again  :s
  • drob4
    drob4 Posts: 153 Forumite
    Part of the Furniture 100 Posts
    Looks like Vanguard have removed the update:

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

    So, not sure what the situation is…
  • fabsaver
    fabsaver Posts: 1,305 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    drob4 said:
    Looks like Vanguard have removed the update:

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

    So, not sure what the situation is…
    That explains why I could not find the update on their website. 

    I did find the following from their Q&A, which do not appear to have changed.
    https://www.vanguardinvestor.co.uk/need-help/answer/will-i-receive-interest-on-cash-held-in-my-isa-or-general-account
    https://www.vanguardinvestor.co.uk/need-help/answer/will-i-receive-interest-on-cash-held-in-my-personal-pension
  • Keith80
    Keith80 Posts: 23 Forumite
    Fourth Anniversary 10 Posts Name Dropper
    Vanguard's more detailed client terms state that their rate for client cash held in trust is linked to the rate they get for it from the bank so I would be surprised if they could arbitrarily set a much lower rate to discourage rate tarts from piling in. I am sure though that they are unhappy if people have been doing this because their underlying philosophy emphasises long-term investing in equity and bonds. So they are likely to see hot money flows as undesirable and not in the interest of their clients who invest for the long term.
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