Trading 212 cash isa vs stocks isa cash

nrbr

I have a cash isa on trading 212 with 4.5% interest, and a stocks isa with 4.6% interest on uninvested cash. Why is the stocks isa slightly higher? Is there any reason not to just use the stocks isa instead of the cash isa? Is the money still fully protected and interest is tax free?

TheBanker

The Stocks ISA places some of your cash in Qualifying Money Market Funds. These are low risk, but riskier than cash deposited with a bank. And they don't afford FSCS protection in the same way.

Under normal times I'd say not to worry, but these are not normal times. I'm happy to forfeit 0.1% for the FSCS benefit.

nrbr

Thanks for the info. I also asked Trading 212, and they responded:

The Stocks ISA and Cash ISA are different financial products, and the Cash ISA does not have funds invested in QMMF's.
 
While the Cash ISA is fully protected, some of the funds kept in QMMF's in the Stocks ISA are not protected, as it is counted as an investment.

Albermarle

As above T212, have a somewhat unconventional way of working compared to a 'normal'  S&S ISA provider.

Usually with a S&S ISA, if you keep cash in it , you get interest but not a great rate ( say currently typically 3%). The S&S ISA provider will keep your cash with a normal bank ( Barclays, HSBC etc) and so the money is covered by FSCS in that bank.