Fund supermarket teams up with banks and building societies to offer fixed-term accounts.
Hargreaves Lansdown has launched a new service to enable its customers to save their money in cash.
The fund supermarket has teamed up with seven banks to offer its clients access to 19 fixed-term savings accounts.
The new service, named Active Savings, will enable Hargreaves Lansdown users to save their money in cash through an Isa, Sipp or general investment account. It means people can hold investments and cash in a single place, rather than have to manage their money across a number of different platforms.
It also avoids the hassle of having to open and close a new account and transfer savings to get a better rate of interest when a deal ends.
Mark Dampier, head of investment research at Hargreaves Lansdown, says: “Our clients told us they don’t have time to chase the best savings rates – they just want consistently good returns, more choice and cash savings which are easy to manage alongside their investments and pensions.”
Customers who open an Active Savings account with Hargreaves will be able to deposit their cash – a minimum of £1,000 – into a 'hub' and allocate it to a savings product from there. Interest is paid back into the cash hub. Users will receive a monthly statement of their savings and a reminder when their rate is maturing, detailing other available deals.
While investors using Hargreaves pay an annual platform fee of 0.45% of their assets, those using the Active Savings account will not be charged directly. Instead, the banks and building societies operating through the service will pay a commission of 0.25%.
Products available include a three-year savings account with ICICI Bank at 2.25%, an 18-month deal with Metro Bank at 1.94% and a three-month account with United Trust Bank at 1.25%.
Justin Modray, financial adviser at Candid Money, says: "In practice, this is no different to going direct to a bank and opening a fixed term savings account, except that Hargreaves is trying to make the application process simpler in return for collecting up to 0.25% commission.
"The rates on offer appear to be the same as if you went directly but Hargreaves is offering an easy way for lazy savers to earn a respectable interest rate. I’d like to see the initiative extended to Isas and Sipps, as the rates on cash in these accounts are currently just 0.1 to 0.35%."
Mr Dampier adds: “Cash plays an important part in every portfolio – it gives you the ability to take advantage of good investment opportunities or keep some powder dry, providing stability in less predictable times.”
Banks partnering with Hargreaves Lansdown are: Aldermore, Close Brothers Saving, Coventry Building Society, ICICI Bank UK, Metro Bank, Shawbrook Bank, and United Trust Bank. More are expected to be added in time.
Alternatives to Hargreaves Lansdown's new savings platform
Hargreaves Lansdown is not the first to offer a platform that aggregates savings products into one place. Competitors include Raisin UK and Octopus Cash.
Raisin UK's selection is, however, more limited than Hargreaves, offering just eight accounts with rates varying from 1% to 2.68%. Octopus Cash doesn't specify how many different accounts it has but works with six different cash savings providers to offer interest rates on 35-day notice accounts of up to 1.21%, and one-year fixed savings up to 1.85%.
You can find the best saving rates in our weekly Savings Update.
This article first appeared on our sister website Money Observer.