Can you get a better rate with a savings platform?
Charles Stanley Direct has launched a new online savings platform that promises to offer access to some of the most competitive rates on the market – but do websites like this really offer the best deals?
The investment firm's Cash Savings platform is described as a 'one-stop shop' for savings, allowing people to view all their deposits in one place and easily switch accounts when rates rise.
They are not the only online savings platform on the block though, with established names including Raisin UK and Hargreaves Lansdown competing for your nest egg.
Which? takes a look at what Charles Stanley Direct is offering that's different and explores whether savings platforms are worth considering.
What is a savings platform and how do they work?
If you don't like the job of shopping around for the best deal, you can use an online savings platform instead.
These websites work with a number of banks and building societies to help source market-leading accounts for you. Some top-rated products are exclusive to the platform and can't be found anywhere else.
Registering with a savings platform is generally very straightforward and you'll usually be notified when any bonds are due to mature.
- Find out more: what is a savings platform?
What does Charles Stanley Direct's platform offer?
Like many savings platforms, Charles Stanley Direct Cash Savings site unlocks access to a range of top-rate savings accounts – easy access, fixed term, and notice – with minimum opening deposits starting from just £1.
There are no upfront fees, but the company it uses to power the platform - Bondsmith - does keep a 0.1% cut of the rate. This is done behind the scenes, so the rate you see advertised is the rate you will get.
What rates can you get on a savings platform?
The table below shows you what each of the main savings platforms offers, listed in alphabetical order. Rates are current as of 14 November 2023.
| Savings platform | Platform fee | Minimum deposit | Top one-year fixed rate (AER) | Top instant-access rate (AER) |
|---|---|---|---|---|
| Akoni Cash Management | 0.25% for savings between £1,000 and £249,999 / 0.15% on £5m+ paid quarterly | £1,000 | 5.9% | 5.25% |
| Aviva Save | None | £1,000 | 5.55% | K.A. |
| Charles Stanley Direct Cash Savings | 0.1% taken from the rate offered before being advertised | £1 | 5.65% | 4.5% |
| Flagstone | None | £10,000 | 5.65% | 4.92% |
| Hargreaves Lansdown Active Savings | None | £1 | 5.65% | 5.06% |
| Interactive Investor Cash Savings | None | £10,000 | 5.75% | K.A. |
| Raisin UK | None | £1,000 | 5.6% | 4.72% |
Can you get a better rate with a savings platform?
The top rate on a one-year fixed-rate bond is currently 5.91% AER from Metro Bank and the top restriction-free instant-access savings account pays 5.2% AER from Ulster Bank.
So of the savings platforms we looked none could match the rate offered on a one-year bond, but Akoni Cash Management offered a better easy-access account paying 0.05% more than the top-rate deals available more widely.
However, Akoni charges a fee on the overall amount you save. So if you opened the best instant-access account through them, paying 5.25% AER, with a £5,000 deposit - and didn't touch your money - you'd earn £269 in interest after 12 months. But if you take into account the 0.25% fee, then the rate you are getting in reality is actually 5%.
Also, because the fee is charged every three months, it will be nibbling away at your nest egg over the year and affecting the total annual returns you receive.
Other platforms such as Charles Stanley take a cut of the rate you receive from a bank, which is why the rate you get through them is slightly lower than you could get by going direct.
- Find out more: 6 tips for making the most of your savings
Pros and cons of using a savings platform
Using a savings platform may sound like an easy win for time-poor savers who don't want to miss out on the latest rate, but don't want to rush into registering with a provider before they've weighed up the pros and cons of using the service:
Pros
Convenience: Shopping around every bank and every account option can be time-consuming. Savings platforms, however, make it easier to compare the best rates and manage multiple accounts in one place.
Easy to set up: Registering is quick and simple, with a single login. You can also move your money between a range of accounts without needing to go through a full application process each time.
Keep on top of fast-changing rates: Savings rates are incredibly volatile at the moment, changing day by day. A savings platform can help you move easily between offers and account types from different banks as rates change and needs evolve. When a bond matures, savings platforms often have a feature that reminds you to move your money to another top-rate account.
Exclusive deals: Unlike going direct to a bank or building society, savings platforms sometimes offer rates that you won't find anywhere else.
Easy to spread FSCS protection: Allowing access to more than one provider means savers with larger deposits can easily ensure their savings are spread out to benefit from the Financial Services Compensation Scheme (FSCS). For instance, you could spread your lump sum between multiple FSCS-protected banks, covering up to £85,000 in each account.
Cons
May miss out on other top rates: Savings platforms work with a set number of banks and building societies. You could therefore easily miss a top rate offered by a provider not listed on the website.
Money may not be FSCS protected: If the savings platform itself fails - as opposed to a bank or building society - the FSCS says they generally won't be able to compensate, as the service provided by the savings platform is not a regulated activity. So always check whether the savings provider will hold your cash, and whether it's covered by the FSCS if anything should go wrong.
Minimum investments may be higher: Some platforms such as Flagstone and Interactive Investor Cash Savings only list accounts with a minimum investment of £10,000. That's a large lump sum to deposit and there are many top-rate accounts available with much lower opening requirements.
Fees: While some platforms such as Raisin and Aviva Save are free to use, others charge a 'platform fee' for their services. That's often taken as a cut of the interest offered, done before displaying the rates on its platform. Others, like Akoni, take a percentage of your savings - how much varies though.
- Find out more: best savings accounts 2023
