Have I made a mistake with Plum

masonic

eskbanker said:

masonic said:

eskbanker said:

Andme1 said:

OK then, in what way isn't it a simple savings account that you were expecting?

During the withdrawal process it tells me that my withdrawal amount could be higher or lower than I'm expecting which isn't something that I've read before on my other accounts. 

I don't know whether that matters which is why I'm asking for other opinions. 

I must admit that I hadn't spent much time looking at it, beyond the reference to easy access, but reading the product info on their site in more detail, I see that it's an investment product structured as low risk via the use of money market funds, so yes, it's not a simple savings account!  The blurb refers to variable interest, but doesn't seem to mention the variable withdrawal amount issue you refer to - are you able to copy/paste the exact wording of the relevant message?  Have withdrawals thus far matched what you asked for?

It invests in the BlackRock ICS Sterling Government Liquidity Fund, so presumably the precise amount you receive will depend on the price at the next valuation point of the fund, just like any other fund sale order.

Makes sense I suppose, if the account holder is literally buying units directly, but I'd agree with OP that they should make that clearer!

It seemed clear enough in the text I saw just below the product banner:

And then just a bit further down:

https://withplum.com/plum-interest/

Though I think they may be crossing the line by comparing returns to risk-free current and savings accounts provided by banks.

eskbanker

masonic said:

eskbanker said:

masonic said:

eskbanker said:

Andme1 said:

OK then, in what way isn't it a simple savings account that you were expecting?

During the withdrawal process it tells me that my withdrawal amount could be higher or lower than I'm expecting which isn't something that I've read before on my other accounts. 

I don't know whether that matters which is why I'm asking for other opinions. 

I must admit that I hadn't spent much time looking at it, beyond the reference to easy access, but reading the product info on their site in more detail, I see that it's an investment product structured as low risk via the use of money market funds, so yes, it's not a simple savings account!  The blurb refers to variable interest, but doesn't seem to mention the variable withdrawal amount issue you refer to - are you able to copy/paste the exact wording of the relevant message?  Have withdrawals thus far matched what you asked for?

It invests in the BlackRock ICS Sterling Government Liquidity Fund, so presumably the precise amount you receive will depend on the price at the next valuation point of the fund, just like any other fund sale order.

Makes sense I suppose, if the account holder is literally buying units directly, but I'd agree with OP that they should make that clearer!

It seemed clear enough in the text I saw just below the product banner:

And then just a bit further down:

https://withplum.com/plum-interest/

Personally I don't think that really emphasises the direct nature of the investment, and just seems to be suggesting that returns are variable.  In other words, it's clear that £1000 deposited could ultimately turn into £1050 or £1150 or even £950 a year later, but IMHO it doesn't really spell out that a withdrawal of £100 could be £99 or £101 - not saying it's impossible to work that out but it's not exactly in your face!

masonic

eskbanker said:

Personally I don't think that really emphasises the direct nature of the investment, and just seems to be suggesting that returns are variable.  In other words, it's clear that £1000 deposited could ultimately turn into £1050 or £1150 or even £950 a year later, but IMHO it doesn't really spell out that a withdrawal of £100 could be £99 or £101 - not saying it's impossible to work that out but it's not exactly in your face!

Perhaps that's a valid criticism, if someone doesn't understand the meaning of "your money is held in an interest-earning fund holding..." because they are unfamiliar with investments, then they wouldn't get it. "Capital at risk" ought to prompt some questions, though.

Unless you were withdrawing 98%+ of your balance, under normal circumstances you'd get exactly the amount you requested, because fund orders can be placed for a specific cash amount (subject to you holding enough units at the valuation point).

As an aside, these products (including the equivalent ones offered up by Trading212 and others) will only remain attractive for as long as there is an inverted yield curve in bond markets. The best savings rates generally beat money market rates because the capital is used for higher risk downstream lending with that risk hedged away through the FSCS.

Another thing that might not be clear to customers is that a deposit account provides some interest rate protection in the form of regulated notice periods, so even with a slightly lower starting rate, they could generate higher returns from the savings account in a falling interest rate environment due to that protection. I have and do use money market products in my investment accounts, but would not consider moving my cash savings into such a product just because of an anomaly in bond markets at the moment. I'm still clinging on to several accounts with rates north of 5%.

Albermarle

masonic said:

Andme1 said:

masonic said:

Aren't there accounts paying a higher interest rate? I have a Plum account, but I've never put anything into their savings products as I prefer to go with the best interest rate available.

It's 4.97% VAR which is the highest I've seen for the amount I have. Yes there is higher but they require a much larger minimum deposit 

There is the Cahoot Sunny Day Saver paying 5.20% for amounts less than £3000.

Plus Kent & Reliance have a traditional easy access account with a minimum deposit of £1000, paying 0.01 % less than Plum.

friolento

Andme1 said:

I opened a Plum account to take advantage of their ISA interest rate and have maxed it out for the year and I'm happy with that. However I was seduced by the interest rate of the Plum Interest account and moved some other money over to it. I'm now thinking that was a mistake as it's not a simple easy access saving account and I should move it all over to somewhere else. 

I hope the other money wasn't an ISA transfer, as they drop the ISA interest rate when you transfer-in

Andme1

friolento said:

Andme1 said:

I opened a Plum account to take advantage of their ISA interest rate and have maxed it out for the year and I'm happy with that. However I was seduced by the interest rate of the Plum Interest account and moved some other money over to it. I'm now thinking that was a mistake as it's not a simple easy access saving account and I should move it all over to somewhere else. 

I hope the other money wasn't an ISA transfer, as they drop the ISA interest rate when you transfer-in

No it wasn't a transfer, that's a worry for next year when my fixed rates come to an end 😬

Andme1

Albermarle said:

masonic said:

Andme1 said:

masonic said:

Aren't there accounts paying a higher interest rate? I have a Plum account, but I've never put anything into their savings products as I prefer to go with the best interest rate available.

It's 4.97% VAR which is the highest I've seen for the amount I have. Yes there is higher but they require a much larger minimum deposit 

There is the Cahoot Sunny Day Saver paying 5.20% for amounts less than £3000.

Plus Kent & Reliance have a traditional easy access account with a minimum deposit of £1000, paying 0.01 % less than Plum.

I saw this account but didn't have the minimum deposit at the time and as I'd already opened the Plum account so made a quick decision to use what they were offering.

Thanks for everyone's input into this, much appreciated. I'm going to have a look at the Cahoots account and transfer if I'm eligible. Its not a massive amount but I do like everything I have to work as hard as it can for me 

FIREmenow

Thanks for everyone's input into this, much appreciated. I'm going to have a look at the Cahoots account and transfer if I'm eligible. Its not a massive amount but I do like everything I have to work as hard as it can for me 

The Cahoot Sunny day account isn't an ISA, it's an easy access savings account. 

General question on Plum - the Plum ISA is being referred to as a cash ISA eg. On moneyfactscompare, is it actually a S&S ISA if the money is invested? 

Beddie

FIREmenow said:

Thanks for everyone's input into this, much appreciated. I'm going to have a look at the Cahoots account and transfer if I'm eligible. Its not a massive amount but I do like everything I have to work as hard as it can for me 

The Cahoot Sunny day account isn't an ISA, it's an easy access savings account. 

General question on Plum - the Plum ISA is being referred to as a cash ISA eg. On moneyfactscompare, is it actually a S&S ISA if the money is invested? 

The Plum cash ISA is a normal cash ISA.

The more complex product talked about above is called Plum Interest and is clearly explained on their website.

FIREmenow

The Plum cash ISA is a normal cash ISA.

The more complex product talked about above is called Plum Interest and is clearly explained on their website.

Apologies, the OP mentioned an ISA and then the Plum Interest account, and several comments are referring to ISA transfers in, and I conflated the two.