Trading 212 - are they being a bit cheeky?

tight_kb99

It's stated in the T&Cs that all money contributed by you is held in banks and explicitly not QMMFs so are covered by the FSCS.

However, if you enable interest, this cash is held in QMMFs and not covered by the FSCS.

If you enable interest, we will hold your cash in qualifying money market funds and banks. Otherwise, we will hold it only in banks. Interest applies on cash in an investment account. Terms apply. When investing, your capital is at risk.

I take it to mean that all interest is paid into a QMMF and therefore not covered - as they're contributing this and not the customer. Whereas the principal is held in bank accounts.

Not a massive issue for the 20k, but the interest could be significant on transfers in.

Have I understood that right?

Aidanmc

tight_kb99 said:

It's stated in the T&Cs that all money contributed by you is held in banks and explicitly not QMMFs so are covered by the FSCS.

However, if you enable interest, this cash is held in QMMFs and not covered by the FSCS.

If you enable interest, we will hold your cash in qualifying money market funds and banks. Otherwise, we will hold it only in banks. Interest applies on cash in an investment account. Terms apply. When investing, your capital is at risk.

I take it to mean that all interest is paid into a QMMF and therefore not covered - as they're contributing this and not the customer. Whereas the principal is held in bank accounts.

Not a massive issue for the 20k, but the interest could be significant on transfers in.

Have I understood that right?

The Cash ISA funds are held in banks, Natwest, Barclays and JPM.

The S&S isa and Invest account cash is in QMMF if interest is enabled

Edit. Just looking at my invest account and some of the cash there is in banks and some in QMMF's.

A while back 100% was in qmmf, now its

QMMF 43%

Natwest 25%

Barclays 23%

JPM 10%

approx

tight_kb99

Thanks do you have a source for that?

It's not in their T&Cs and I quoted their cash ISA page explicitly.

tight_kb99

I can't edit posts or post links yet, but you can see that the quote I posted above is explicitly from their cash ISA page

tight_kb99

Just seen your edit, thanks, that wasn't quite my question though. I'd expect investment accounts to be held across a variety of locations, but I'm more interested in where interest is deposited for their cash ISA.

There's according to their terms, nothing stopping them paying interest into a QMMF whilst keeping customer contributions in FSCS protected accounts. Since they explicitly state that for cash they keep it in a QMMF and distinguish customer contributions in their T&Cs - I'd argue that interest may not be covered by the FSCS and there are other cash ISA options with only a minor reduction in interest that would be fully protected

Aidanmc

tight_kb99 said:

Just seen your edit, thanks, that wasn't quite my question though. I'd expect investment accounts to be held across a variety of locations, but I'm more interested in where interest is deposited for their cash ISA.

There's according to their terms, nothing stopping them paying interest into a QMMF whilst keeping customer contributions in FSCS protected accounts. Since they explicitly state that for cash they keep it in a QMMF and distinguish customer contributions in their T&Cs - I'd argue that interest may not be covered by the FSCS and there are other cash ISA options with only a minor reduction in interest that would be fully protected

I see where you read that, but i believe its referring to the cash in S&S ISA account, rather than the Cash ISA.

I don't even think you have to 'enable' interest on the Cash ISA.

Cant find the terms offhand, but when the Cash ISA was released in June it was well notedto have full FSCS protection.

All i know is where my Cash ISA funds are held.

The interest is also included in that.

gravel_2

Believe it's an error from where they have added Cash ISA as a module to the previous S&S ISA page. As you can see from the quote it's clearly referring to earning interest on cash held in the invest account. Cash ISA is not an invest account.

I have the same percentage spread as Aidanmc.

Interestingly in my S&S ISA it's moved from 100% QMMF to ~43% QMMF and the rest in the same three banks as the Cash ISA in roughly the same split. (EDIT: I can see the exact same observation was already made above).

Aidanmc

https://www.trading212.com/legal-documentation/uk/isa/ISA-Terms_EN.pdf

Cash ISA Terms, section 5 @tight_kb99

5.2. We will hold your Cash ISA cash in segregated Regular Bank Deposits and Term Deposits with banks, as detailed in our Invest Terms. For the avoidance of doubt, we will not use QMMFs to hold money that you have contributed to your Cash ISA.

tight_kb99

Fairy nuff, makes sense, I don't have an account with them so will bow to your experience

@Aidanmc, yes, I'd read that, the pedantic lawyer in me read that as distinguishing between money they contribute vs money you contribute, and that whilst they must keep money contributed by you in banks, they have flexibility as to where the money they contribute (read interest) is kept.

Aidanmc

tight_kb99 said:

Fairy nuff, makes sense, I don't have an account with them so will bow to your experience

@Aidanmc, yes, I'd read that, the pedantic lawyer in me read that as distinguishing between money they contribute vs money you contribute, and that whilst they must keep money contributed by you in banks, they have flexibility as to where the money they contribute (read interest) is kept.

As stated here, the interest will be credited to the Cash ISA daily, the Cash ISA only keeps the cash in banks, so the interest can only go there too.

Im not sure but i assume the interest is allocated to the same percentages over the 3 banks,

5.4. With the Cash ISA, you can earn (variable) daily interest on your deposits, which will be credited to your Cash ISA automatically at the end of each Business Day and reflected on your periodic Statement. The interest rate can be subject to change. If we lower the interest rate, we will give you at least one (1) day’s notice. If we increase the interest rate to your advantage, we will apply the changes immediately without notice. You can always see the current interest rate on our Platform and the Terms and fees page on our Website.