Trading 212 vs Conister Bank

slhqoue

I have around £20k in a Trading 212 account which is currently at 4.61% (4.35% + 0.26% promo rate). However I'm aware this may drop soon due to the interest rate change.

Having received MSE weekly email today, the best 1 year fix is at 4.52% with Conister Bank.

Would you consider switching to this considering the likelihood of the drop in interest rates? Is this bank trustworthy?

slinger2

Isn't your Trading212 account an ISA? The Conister Bank product isn't.

danny13579

Trading 212 have already reduced their rate from 4.5% to 4.35% on May 1st.



Your Conister Bank funds are protected by FSCS.

slhqoue

slinger2 said:

Isn't your Trading212 account an ISA? The Conister Bank product isn't.

Would this affect your decision?

slinger2

slhqoue said:

slinger2 said:

Isn't your Trading212 account an ISA? The Conister Bank product isn't.

Would this affect your decision?

Yes. Because personally I'd pay 20% tax on the Conister Bank interest, reducing the net rate from 4.52% to 3.62%. Many don't pay tax on interest but without knowing your personal tax situation it's difficult to comment.

slhqoue

Sorry for the ignorant question but at what point do you pay tax on interest? Only on interest over the first £1000 if on the basic rate?

masonic

slhqoue said:

Sorry for the ignorant question but at what point do you pay tax on interest? Only on interest over the first £1000 if on the basic rate?

Yes, if you are a basic rate taxpayer and earn more than £1k, you'll pay on the excess. If you won't be earning £1k in interest, and don't expect that situation to change, then simply go for the best rate.

jnm21

masonic said:

slhqoue said:

Sorry for the ignorant question but at what point do you pay tax on interest? Only on interest over the first £1000 if on the basic rate?

Yes, if you are a basic rate taxpayer and earn more than £1k, you'll pay on the excess. If you won't be earning £1k in interest, and don't expect that situation to change, then simply go for the best rate.

There is a twist to that, in fact two, one specific to T212.

With T212 the cash ISA has FSCS protection (hence it features on MSE), but the investment account is not (I can't remember the low risk bonds it uses, which should be safe, barring a Nick Lesson2, but none the less they are not covered by FSCS).

Another difference if comparing fixed products is that ISA rules mean that you have to be able to lift your money, albeit for a potentially hefty fee, which is rarely possible with non-ISAs!

masonic

jnm21 said:

masonic said:

slhqoue said:

Sorry for the ignorant question but at what point do you pay tax on interest? Only on interest over the first £1000 if on the basic rate?

Yes, if you are a basic rate taxpayer and earn more than £1k, you'll pay on the excess. If you won't be earning £1k in interest, and don't expect that situation to change, then simply go for the best rate.

There is a twist to that, in fact two, one specific to T212.

With T212 the cash ISA has FSCS protection (hence it features on MSE), but the investment account is not (I can't remember the low risk bonds it uses, which should be safe, barring a Nick Lesson2, but none the less they are not covered by FSCS).

Another difference if comparing fixed products is that ISA rules mean that you have to be able to lift your money, albeit for a potentially hefty fee, which is rarely possible with non-ISAs!

The invest account uses QMMF. There is FSCS protection for investments if T212 goes bust and where the QMMF fund provider goes bust, if UK domiciled, this would also have FSCS protection in the event underlying assets were missing. However, QMMF are not guaranteed to always go up in value and there is no protection for normal investment risk. Largely irrelevant to the OP, as it appears they confirmed they are using the cash ISA.

T212 doesn't offer fixed term savings products, and hopefully it goes without saying that fixing elsewhere should only be done if the money can be locked away for the full term.

Best 1 year fix is now Hampshire Trust @ 4.45%, with Conister having disappeared from the rate table a couple of weeks ago having only been there fleetingly.