Hargreaves Lansdown Cash ISA (Powered by Shawbrook) 4.3% AER

Canny_mal

Just a word of warning for anyone considering opening this particular Cash ISA with Hargreaves Lansdown.

I opened this very ISA in Feburary which at the time was paying 4.3% AER. In the short time since they have already dropped the rate 3 times. In May they dropped it to 4.01%. In June they dropped it again to 3.73% and this month they're dopping it a 3rd time to 3.45% AER.

I'm a great believer in naming and shaming banks who lure customers in with a competitive rate only for it to drop like a stone in a matter of months despite there having been no movement in the BOE base rate. I accept that's not the only factor that determines the rates banks offer but it's usually a fairly good indicator of whether savings rates are going to rise or fall.. I also appreciate it is a variable ISA so they can do what they like but come on, 3 decreases in 3 months in the current climate is surely taking the mick.

I'm not entirely sure how they can now market this 'new' ISA rate of 4.3% when exisiting customers who have the same ISA are only getting 3.45%. They are even bragging on their website that "you won't find a better unrestricted easy-access Cash ISA anywhere else (that doesn't include a bonus rate or withdrawal restrictions). Yeah but for how long??? At least with a bonus it's clear how long the bonus lasts for.

Be warned!

mebu60

As there's a reference to 'Transfer a Cash ISA' I assume they accept transfers-in and as it's EA can't you open the new 4.3% ISA and transfer in your soon-to-be 3.45% ISA?

Canny_mal

https://forums.moneysavingexpert.com/discussion/comment/82067988#Comment_82067988

They do accept transfers but that side of things is more complicated than it should need to be. When I transferred a Cash ISA I held elsewhere to them, for some reason, I had to transfer it in to a Stocks and Shares ISA (not that I had one already). Then once the funds had been recieved into this stocks and shares ISA I then had to request them be moved into the Cash ISA I'd opened with them paying the 4.3% AER.

The whole experience with Hargreaves Lansdown has been disapointing to say the least which is why I wanted to warn anyone considering opening an ISA with them. I've now transferred my funds out to another provider but that was also frustating. The new provider made the request on 25th June but the money only left Hargreaves yesterday. Then I had a message from my new provider to say Hargreaves haven't provided them with the 'ISA transfer history form' and until they recieve that my funds are stuck in a holding account.

My honest advice to anyone, based on my experience with them, would be to give Hargreaves Lansdown a very wide birth when it comes to cash ISAs

morgmonster

I am in the process of transferring mine to Tandem, to be totally honest my reasoning is mainly to get it into a flexible product as I am going to need the cash short term in a few months and will be able to pay it back in before April. But when I had to call them just an hour ago to find out if the transfer instruction had been received (it had) I did make sure to tell the CS agent that I was disappointed in how fast the rate had dropped. I won't be bothering with HL for ISAs again (apart from my kids' JISA). The fact that none of their ISAs are flexible either is another issue.

Albermarle

This story is probably more about the issues with using third parties/intermediaries ( like HL), when saving in cash ISAs.

Although I find it odd that a provider like Shawbrook would drop their rate so quickly, but still offer a better rate to new customers. It is not the way they do business in my experience. Their current easy access interest rate if you go to them directly is 4%.

palemist

Phew! Good job I scooted over here first, I'll avoid. I was almost tempted by their current 4.43% offer. I'm currently with moneybox at 4.26% and 3 penalty free withdrawals.

I was looking for a flexible cash ISA, there doesn't seem to be any about that's above 4% at the moment.

Thanks for sharing your experience with handl, it's saved some hassle.

getting_close

Tempted by the HL cash ISA at 4.52% but don't want the additional carry on if they have form for tempting you in then reducing rates.

Its 0.5% higher rate then I am getting at Virgin Money hence the interest.

mrcrumb

HL sets the rate, not Shawbrook, they give you 14 days notice if they are reducing the rate, enough time to transfer out if you want. Or transfer to another easy access ISA in the HL cash isa range.

Opening a new easy access ISA with them and moving (transferring) the money over is very easy.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/82104121#Comment_82104121

AIUI, your money would be earning interest from Shawbrook, so surely they have the main say in what the rate is, even though HL may have negotiated some special rates.?

Albeit you get any info about rates from HL, as the third party intermediary.

mrcrumb

In the product summary it says HL sets the interest rate and Shawbrook holds the money. I understand this to mean Shawbrook holds the money and HL pays the interest monthly to a Shawbrook client account, HL is the ISA manager.