Should I move money out of T212 to Plum? And what to do with extra cash?

moneywow1

Hi everyone,

I currently have about £75K in my T212 ISA and I'm getting 4.35% AER

I can also put in £26K for this tax year as it's a flexible ISA and I withdrew some recently.

I also have about £80K available which I haven't put into savings yet.

Right now in my T212 account it's all cash, but I like the option of being able to transfer between cash and the S&S investing ISA. I also like the fact it's a flexible ISA so I could withdraw if needed.

But there are better accounts. Plum offer 5% for a year (3.54% variable + 1yr 1.52%), although it's not flexible and it is cash only, but 3 withdrawals per year, so if I really needed to I could transfer it to another provider, say back to T212?

I'm also taking the £85K protection into account, so I figure I can transfer from T212 and then also top it up to £81K, so I'm covered for the full amount including interest, if needed (or should I just put the full £85K in?) and then I could put the rest in T212?

Or I considered putting £10K into Moneyfarm and getting the £350 cashback from TCB. I know the cashback isn't a guarantee, but in my experience they have always paid out, and it would work out to 3.5% on top of everything else.

But then that will pretty much take me up to my max allowance, and I would have about £50-60K left. What should I do with this? £50K in premium bonds? £4K in Santander's Edge which pays 6% for a year? The rest in a standard account with ~4.75 interest?

I know premium bonds are only ~3.8% and there's a chance I don't win anything, but it's also tax free so not too far off.

Note: I'm not really taking likely rate cuts into account because the majority are variable and I don't think it matters too much, but I could also go for a 1 year fix or something to protect against rate cuts.

Thanks in advance

friolento

You get a much lower interest rate for transfers in at Plum. They might be alright for new ISAs, I don’t know. I have discarded them a while back as I found their terms confusing.

Isarulesaretoocomplex

That rate may drop 8th May. For me I've taken the step to fix all but one of my isas. 

clairec666

friolento said:

You get a much lower interest rate for transfers in at Plum. They might be alright for new ISAs, I don’t know. I have discarded them a while back as I found their terms confusing.

Is it also Plum who don't pay you any interest in a month where you've made a withdrawal? I too am avoiding them because of all these complicated little hidden conditions. At least Trading 212 is straightforward (apart from the newbie bonus thing which really annoys me!)

Uriziel

I would avoid Plum completely. I have requested a transfer to another ISA and they told me that it was completed but they have instead frozen the account and kept the money and do not respond anymore. They also pay you interest at the end of the month and not start meaning you will always be losing out on a month's interest if you move your money. Up to you.

El_Torro

Uriziel said:

I would avoid Plum completely. I have requested a transfer to another ISA and they told me that it was completed but they have instead frozen the account and kept the money and do not respond anymore. They also pay you interest at the end of the month and not start meaning you will always be losing out on a month's interest if you move your money. Up to you.

Paying interest out at the end of the month instead of the start shouldn't be an issue. Banks will transfer any interest owed when the transfer is made, assuming you're not on a fixed rate with a penalty to cancel early. 

Not that I have any experience with Plum. Your experience with them doesn't sound great.

masonic

El_Torro said:

Uriziel said:

I would avoid Plum completely. I have requested a transfer to another ISA and they told me that it was completed but they have instead frozen the account and kept the money and do not respond anymore. They also pay you interest at the end of the month and not start meaning you will always be losing out on a month's interest if you move your money. Up to you.

Paying interest out at the end of the month instead of the start shouldn't be an issue. Banks will transfer any interest owed when the transfer is made, assuming you're not on a fixed rate with a penalty to cancel early. 

Not that I have any experience with Plum. Your experience with them doesn't sound great.

It's not the end of the month in which it is earned, it is at the end of the month after. In other words, May's interest would be paid out on 30th June. If you opened an account today, you'd get nothing until then. Plum do not pay interest early when an account is closed. You forfeit any partial month and have to wait for the final full month. So if you held an account for a year and closed it today, you'd earn no interest for May, and would have to wait until the last working day in May (30th May) for interest to be credited to the then empty account, which you'd then need to withdraw or transfer separately.

pecunianonolet

Avoid Plum. Very convoluted terms. Would wait until the 8th and see what's out there. It may turn out that the 4.6% currently paid in the S&S ISA with T212 is going to be a very competitive rate.

Speculator

pecunianonolet said:

Avoid Plum. Very convoluted terms. Would wait until the 8th and see what's out there. It may turn out that the 4.6% currently paid in the S&S ISA with T212 is going to be a very competitive rate.

 Opened an instant access account with plum earlier this year but the app was very confusing and something didn't seem right. I then closed it at the earliest opportunity (had to wait a month I think)

friolento

masonic said:

El_Torro said:

Uriziel said:

I would avoid Plum completely. I have requested a transfer to another ISA and they told me that it was completed but they have instead frozen the account and kept the money and do not respond anymore. They also pay you interest at the end of the month and not start meaning you will always be losing out on a month's interest if you move your money. Up to you.

Paying interest out at the end of the month instead of the start shouldn't be an issue. Banks will transfer any interest owed when the transfer is made, assuming you're not on a fixed rate with a penalty to cancel early. 

Not that I have any experience with Plum. Your experience with them doesn't sound great.

It's not the end of the month in which it is earned, it is at the end of the month after. In other words, May's interest would be paid out on 30th June. If you opened an account today, you'd get nothing until then. Plum do not pay interest early when an account is closed. You forfeit any partial month and have to wait for the final full month. So if you held an account for a year and closed it today, you'd earn no interest for May, and would have to wait until the last working day in May (30th May) for interest to be credited to the then empty account, which you'd then need to withdraw or transfer separately.

So to minimise your losses, you’d need to

1 - withdraw the complete available balance towards the end of a month

2 - then on the day they eventually credit your interest, immediately withdraw the entire balance / close the account

Does this somewhat irritating complexity sound like the best solution for those who have been lured in?

masonic

friolento said:

masonic said:

El_Torro said:

Uriziel said:

I would avoid Plum completely. I have requested a transfer to another ISA and they told me that it was completed but they have instead frozen the account and kept the money and do not respond anymore. They also pay you interest at the end of the month and not start meaning you will always be losing out on a month's interest if you move your money. Up to you.

Paying interest out at the end of the month instead of the start shouldn't be an issue. Banks will transfer any interest owed when the transfer is made, assuming you're not on a fixed rate with a penalty to cancel early. 

Not that I have any experience with Plum. Your experience with them doesn't sound great.

It's not the end of the month in which it is earned, it is at the end of the month after. In other words, May's interest would be paid out on 30th June. If you opened an account today, you'd get nothing until then. Plum do not pay interest early when an account is closed. You forfeit any partial month and have to wait for the final full month. So if you held an account for a year and closed it today, you'd earn no interest for May, and would have to wait until the last working day in May (30th May) for interest to be credited to the then empty account, which you'd then need to withdraw or transfer separately.

So to minimise your losses, you’d need to
1 - withdraw the complete available balance towards the end of a month
2 - then on the day they eventually credit your interest, immediately withdraw the entire balance / close the account
Does this somewhat irritating complexity sound like the best solution for those who have been lured in?

It's not as simple as that. I've only seen posts related to cash ISA promotions, and Plum ISAs are not flexible. Then there is a minimum balance requirement to be eligible for a promotional rate of interest. And a limit to the number of withdrawals you can make during the promotional period.

If you have taken up the 12 month promotional offer, then the best course of action is to do a partial transfer out of Plum of everything but the last £100 (minimum balance for the promotions I have seen). This can be done towards the end of the promotional period or immediately after it. Technically you can reduce down to zero at any point after the promotional period, but maintaining the minimum balance until the bonus is paid may reassure some folk. Then you can wait for the bonus interest and basic interest to be credited at the end of the following month and either transfer out or withdraw the last £100 plus change. There will still be one more month were interest earned on the £100 will be credited, but as long as that is removed within one month the account will then be fully closed.

If you have taken up the 3 month promotional offer (the more recent offer), then different action may be required as Plum does not support partial transfers of current year subscriptions. Therefore you would have to do a full transfer after the promotional period expires - either immediately or on the 1st of the next month if expiry is late in the month (since you will forfeit interest on the month you withdraw in the first year). The ISA will remain open, despite it being a full transfer. Then interest and the bonus will be added at the end of the month, which can be swept up in another transfer or withdrawn. Yes, they don't support partial transfers, but create a situation where you have two current year ISAs for a while - go figure!

If you are wondering why I am across all of this information, I confess to taking them on for the 5.92% 3 month offer. All receipts have been stashed for future reference, and I shall be holding their feet to the fire should they put a foot wrong when I exit at the beginning of July.