Savings Platforms - Worth It?

dogfonos

Just spent the morning investigating savings platforms and noticed, on average, a significantly lower interest rate offered compared to saving directly with the bank/building society, ranging from 0.1% to 0.8%. Whilst I didn't check every single account offered by every savings platform (and some didn't show such details without signing up for an account), I couldn't find a single example where a platform bettered a 'going direct' interest rate (maybe there's an example out there somewhere?).

I appreciate the convenience of managing several savings accounts in one place, having a single consolidated interest statement provided by the platform provider at the end of each tax year (some providers claim to) and being able to readily switch between accounts (great for interest rate chasers like me) but, currently at least, the saver pays quite a high price for that convenience.

All things considered, I've decided not to save on a platform for now but would be interested to hear from those who do: do you feel the benefits outweigh the lower interest rates?

penners324

The major advantage is 1 login, 1 set of security to go through.

You dont need logins for every account provider.

Plus its easily compare accounts across multiple providers.

Sea_Shell

I use Raisin and have been very happy with them.

Being able to choose between a variety of fixes, easy access or notice accounts in one place is worth a smidgeon less interest, for convenience, IMO.

They are better recently, as they've sped up their processes and so maturity/withdrawals are quicker than they once were.

friolento

The only time I used savings platforms was when they had good joining offers. Otherwise I am not drawn to them as I am not impressed with their rates, I don’t value the single access, and I don’t like the delays in depositing and withdrawing. Nor am I terribly keen on a set of T&Cs on top of the T&Cs of the actual savings accounts, and the opaque information about FSCS cover whilst my money is in the hands of the platform, or the third (fourth??) party.

OwnedByACat

There are sign-up bonuses. I got £100 out of Hargreaves Landsdown, I think. Sometimes there's a good rate but largely I agree with the OP.

trickydicky14

dogfonos said:

Just spent the morning investigating savings platforms and noticed, on average, a significantly lower interest rate offered compared to saving directly with the bank/building society, ranging from 0.1% to 0.8%. Whilst I didn't check every single account offered by every savings platform (and some didn't show such details without signing up for an account), I couldn't find a single example where a platform bettered a 'going direct' interest rate (maybe there's an example out there somewhere?).

I appreciate the convenience of managing several savings accounts in one place, having a single consolidated interest statement provided by the platform provider at the end of each tax year (some providers claim to) and being able to readily switch between accounts (great for interest rate chasers like me) but, currently at least, the saver pays quite a high price for that convenience.

All things considered, I've decided not to save on a platform for now but would be interested to hear from those who do: do you feel the benefits outweigh the lower interest rates?

What you say is fair comment but I have used several platforms over the years and your figures are just a snap shot, I have seen good rates in the past. And don't forget you can often get a good incentive as a new customer and even as a old customer I have just got £125 from Raisin. So you just need to be selective and keep an eye on these platforms, some times it's worth it.

trickydicky14

friolento said:

trickydicky14 said:

dogfonos said:

Just spent the morning investigating savings platforms and noticed, on average, a significantly lower interest rate offered compared to saving directly with the bank/building society, ranging from 0.1% to 0.8%. Whilst I didn't check every single account offered by every savings platform (and some didn't show such details without signing up for an account), I couldn't find a single example where a platform bettered a 'going direct' interest rate (maybe there's an example out there somewhere?).

I appreciate the convenience of managing several savings accounts in one place, having a single consolidated interest statement provided by the platform provider at the end of each tax year (some providers claim to) and being able to readily switch between accounts (great for interest rate chasers like me) but, currently at least, the saver pays quite a high price for that convenience.

All things considered, I've decided not to save on a platform for now but would be interested to hear from those who do: do you feel the benefits outweigh the lower interest rates?

What you say is fair comment but I have used several platforms over the years and your figures are just a snap shot, I have seen good rates in the past. And don't forget you can often get a good incentive as a new customer and even as a old customer I have just got £125 from Raisin. So you just need to be selective and keep an eye on these platforms, some times it's worth it.

I passed on the £125 as it wasn’t enough to pay for the loss of interest that I would have incurred. 

Fair comment, I was happy with the return it gave me. The point is, it's still worth keeping an eye on what platforms are offering.

friolento

Agree, it’s worth keeping an eye on special offers. These are far and few between, sadly

Malchester

And if you deposit for monthly interest as income to be paid out to current account I have not found any monthly interest accounts that pay out monthly as the interest has to be compounded.

Also remember that, when you get a lower interest rate on a platform that difference is going to the platform instead of into your pockets

dogfonos

trickydicky14 said:

...I have seen good rates in the past. 

As you say, in the past. I guess when these platforms launched they needed to draw in custom so offered juicy incentives and competitive interest rates. These days, the incentives I've seen wouldn't generally make up for the lower interest rates for me, though there will probably be some exceptions.

I accept I have to pay platform charges with my investments but at least I'm receiving the same fund performance as I would had I invested directly in the fund.

Certainly worth keeping an eye on saving platform developments though. Many thanks for all your inputs.

winkowinko

As others have mentioned, they can be useful when receiving a sign up bonus.

18 months ago, I opened a Raisin bond and effectively turned a 1-year fix paying 5.05% into 6.05%, because of the £100 bonus.