Table of Contents
The products presented in this article are independently selected by This is Money’s specialized journalists. If you open an account using links that have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence.
Isa has launched a new easy-to-access cash from trading and investment platform Trading 212, available to new and existing customers.
He Trade 212 cash Isa*Pays a maximum rate of 5.2 percent, the highest rate available on an easy-access tax-free account.
This has ousted Plum’s cash Isa from first place, which pays an interest rate of 5.17 per cent. Unlike the Plum Isa, there is no bonus rate included in the main rate of 5.2 per cent.
Turbo boost: Trading 212 has launched a cash Isa paying 5.2%, rocketing to the top of the best buy tables.
Trading with a 212 Cash Isa is also flexible, meaning you can withdraw money from the Isa and replace it without affecting your Isa allowance, as long as you replace it within the same tax year.
Flexibility can be a useful tool in an Isa to ensure you keep as much of your savings as possible tax-free.
The new Isa can only be opened on the Trading 212 app with a deposit starting at £1.
Is it protected by FSCS?
Trading 212 says on its website that any money held in cash in an Isa will be protected under the Financial Services Compensation Scheme (FSCS) up to £85,000.
FSCS protects customers’ money up to a value of £85,000 if the company goes bankrupt.
Trading 212 Isa funds are held in bank accounts associated with Barclays, NatWest and JPMorgan.
But one savings expert said they would advise any savers with large balances at Barclays, JP Morgan (including Chase) or NatWest to be careful about how much they save with Trading 212.
This is because Trading 212 uses these banks for their FSCS protection.
Trading 212 is an FCA regulated company and an HMRC registered Isa administrator, so it can offer a cash Isa to savers despite being an investment app and not having a banking licence.
It is not unusual for companies that are not banks or building societies to use other institutions for the FSCS, but it is not common to use three different banks.
Our savings expert said: ‘It is unusual for them to use multiple banks for their customers’ money and therefore FSCS cover.
“However, what is more worrying is that this is not shown on their website and makes it very difficult for FSCS coverage.”
This is because there is no separate coverage limit for clients’ money protected by the FSCS. It is also unclear how savers’ money is divided.
If an Isa saver puts £20,000 into a Trading 212 Isa and places it with Barclays, and that saver already has more than £65,000 with Barclays direct, any amount above this will be unprotected.
The same goes for NatWest and JPMorgan, which uses the Chase brand in the UK, and has developed a large following.
How does it compare to other top Isa offers?
Plum
The Plum Cash Isa* It is the next best easy-access cash Isa on the market after Trading 212 pays 5.17 per cent. But it comes with many more pitfalls.
The rate includes a 0.88 percent bonus for the first 12 months. After 12 months, the rate drops to 4.29 percent.
Plum’s Isa allows transfers from other Isa providers, but if you transfer into an existing Isa you’ll get 4.29 per cent instead of 5.17 per cent.
If your balance falls below £100, or if you make more than three withdrawals in a year, the rate will drop to 3 per cent. The minimum deposit required is £100.
This account can only be opened by downloading the Plum app. The minimum deposit required to open an account is £1.
All money deposited in the Plum deal is held by Citibank and is eligible for Financial Services Compensation Scheme protection of up to £85,000 per person.
Chip
Chip cash, Isa*, pays 5.1 per cent. The account is also fully flexible, allowing savers to deposit and withdraw their money instantly, without restrictions and without affecting their Isa allowance.
This means savers can replace any money they withdraw from their Isa without it counting towards their annual Isa allowance, as long as they replace the money in the same tax year.
This account can only be opened by downloading the Chip app. There is no minimum deposit required to open an account.
Chip does not currently allow savers to transfer funds from another cash Isa. This is a big drawback for savers who want to transfer an existing Isa.
The interest rate is variable and is 0.26 per cent below the Bank of England’s current base rate.
When the base rate goes up or down, the savings rate will increase on the same day.
With the Bank of England expected to cut interest rates this summer, chip savers could see their rate fall to 4.73 percent if the base rate is reduced to 5 percent or 4.49 percent if the base rate falls to 4.75 percent.
All money deposited into the Chip deal is held by ClearBank and is eligible for Financial Services Compensation Scheme protection of up to £85,000 per person.
zopa
Zopa Bank is currently offering another great, easy-to-access cash Isa offer.
Its Smart Isa offers 5.08 per cent, which includes a 0.5 per cent bonus rate that applies for one year from the date the Isa is opened.
The underlying rate is 4.48 per cent and this is the rate savers will receive when the bonus ends.
Zopa’s Smart Isa is a hybrid cash Isa, combining easy access and fixed-term functionality under one roof.
It also allows savers to transfer from another Cash Isa provider, which is a big plus.
This account can only be opened by downloading the Zopa app. You can start saving with a €1 deposit.
Eligible deposits with Zopa are protected up to a total of £85,000 by the Financial Services Compensation Scheme.
> See the best cash Isa deals in This is Money’s independent best buy tables
Charter Savings Bank
The Charter Savings Bank cash Isa pays a rate of 4.97 per cent. This is the best cash Isa savers will find and it doesn’t require an app.
It can be opened online on the Charter Savings Bank website with a minimum of £5,000 and allows transfers from another provider. However, it is not a flexible Isa.
Charter Savings Bank also offers a cash Isa platform called Mix & Match Isa. This allows savers to have more than one Isa within their cash Isa allowance.
Who operates in 212?
Trading 212 is an investment and trading app founded in 2004. It offers low-cost investing and trading. It’s free to have a cash Isa with Trading 212.
It’s the latest in a series of low-cost trading and investment apps offering a cash Isa for a great rate.
To get the rate, customers must activate the “earn interest cash” feature in the app.
Some links in this article may be affiliate links. If you click on them, we may earn a small commission. That helps us fund This Is Money and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.
