Hargreaves Lansdown Cash ISA Review: High paying interest rate accounts from multiple banks
Account: Hargreaves Lansdown Cash ISA
Description: The HL Cash ISA is unique, allowing savers to manage their Cash ISA portfolio across multiple banks all within one account. HL is the only provider in the UK that allows savers to select from over 15 banking providers across 26 products, including easy access, limited access and multiple fixed term.
Is Hargreaves Lansdown's Cash ISA any good?
Yes, HL has a good Cash ISA, in fact, they have around 1.3 million active ISA customers, of which 345,000 are savings instead of investing accounts.
The great thing about Hargreaves Lansdown cash ISA is that through Active Savings, you get access to a range of different bank accounts from easy access to notice accounts which negates the need to open up multiple bank accounts to get the best interest rates.
Mark Hicks, head of Hargreaves Lansdown Active Savings told us that “with base rate reductions on the horizon for later this year, savers should consider locking away money they don’t need for a specific period in fixed rate accounts, to guarantee attractive tax-free returns of almost 4.5%.”
Exclusive Interest Rates: When you open a Cash ISA with HL you can save tax free in 29 different savings products with rates as high as 4.5% Savers can also gets some of the best rates across differnt savings accounts as HL (due to their size) has been able to negotiate exclusive deals for their customers from Atom Bank, Paragon and Chetwoot
| Provider | AER | Tax-free | Term | Min opening | Interest paid | Fixed? |
|---|---|---|---|---|---|---|
| Zopa | 4.50% | 4.41% | Easy access | 1 | Monthly | variable |
| Chetwood Bank | 4.44% | 4.35% | Easy access | 1 | Monthly | variable |
| Atom Bank | 4.40% | 4.31% | Easy access | 1 | Monthly | variable |
| Monument | 4.36% | 4.28% | Easy access | 1 | Monthly | variable |
| UBL UK | 4.31% | 4.23% | Easy access | 1 | Monthly | variable |
| Paragon | 4.30% | 4.22% | Easy access | 1 | Monthly | variable |
| Shawbrook | 4.25% | 4.17% | Easy access | 1 | Monthly | variable |
| LHV Bank | 4.03% | 3.96% | Easy access | 1 | Monthly | variable |
| Hampshire Trust Bank | 3.92% | 3.85% | Easy access | 1 | Monthly | variable |
| OakNorth Bank Plc | 3.75% | 3.69% | Easy access | 1 | Monthly | variable |
| Santander International | 3.30% | 3.25% | Easy access | 1 | Monthly | variable |
| Coventry Building Society | 2.60% | 2.57% | Easy access | 1 | Monthly | variable |
| UBL UK | 4.31% | 4.26% | 6 months fixed | 2000 | Maturity | fixed |
| Paragon | 4.30% | 4.25% | 6 months fixed | 1000 | Maturity | fixed |
| Arbuthnot Direct part of Arbuthnot Latham | 4.24% | 4.20% | 6 months fixed | 1000 | Maturity | fixed |
| Santander International | 4.04% | 4.00% | 6 months fixed | 1000 | Maturity | fixed |
| LHV Bank | 4.40% | 4.40% | 1 year fixed | 1000 | Maturity | fixed |
| Chetwood Bank | 4.36% | 4.36% | 1 year fixed | 1000 | Maturity | fixed |
| Paragon | 4.30% | 4.30% | 1 year fixed | 1000 | Maturity | fixed |
| Shawbrook | 3.96% | 3.96% | 1 year fixed | 1000 | Maturity | fixed |
| Santander International | 3.95% | 3.95% | 1 year fixed | 1000 | Maturity | fixed |
| Coventry Building Society | 4.10% | 4.10% | 14 months fixed | 500 | Annually | fixed |
| Chetwood Bank | 4.46% | 4.46% | 2 years fixed | 1000 | Annually | fixed |
| Paragon | 4.00% | 4.00% | 2 years fixed | 1000 | Annually | fixed |
| Shawbrook | 3.91% | 3.91% | 2 years fixed | 1000 | Annually | fixed |
| Chetwood Bank | 4.30% | 4.30% | 3 years fixed | 1000 | Annually | fixed |
| Shawbrook | 3.86% | 3.86% | 3 years fixed | 1000 | Annually | fixed |
| Chetwood Bank | 4.30% | 4.30% | 5 years fixed | 1000 | Annually | fixed |
| Shawbrook | 3.76% | 3.76% | 5 years fixed | 1000 | Annually | fixed |
How does HL’s cash ISA differ from a Hargreaves Lansdown investment ISA?
The main difference between the two is that one is a savings product and the other is investment. A cash ISA allows you to earn a fixed interest rate with your cash. This does not change, regardless of market movements. A stocks and shares ISA puts your money in a variety of assets with your return depending on fund performance. It’s a higher risk option and you may get back less than you put in.
You can invest as little as £100 or £25 per month and have full control over what you invest in. This is a good product for people who are comfortable investing and with the risks that entails. The product also offers the flexibility of taking your money out at any time, although this will impact your returns.
See the difference between cash ISAs and stocks and shares ISAs here, or find out how you can reduce your risk but still get high-interest rates on your savings with Active Savings.
This is a good option if you want to invest in an ISA but don’t want to risk investing it in stocks and shares. Although it may offer a lower interest rate, it does offer a guaranteed return. It also gives you plenty of flexibility with the ability to choose between instant access to your cash or more limited access.
The downside is that although you might not be paying tax on your interest there might not be much of it. Although the investment ISAs come with a degree of risk, they do offer the prospect of higher returns. You can also earn up to £1,000 tax free in a regular cash savings account so the tax-free ISA benefits are not that clear cut.
Fun Fact: Did you know that if you saved the full allowance every year for five years in a Hargreaves Lansdown Cash ISA, a basic rate taxpayer could save £981, a higher rate taxpayer £2,806, and an additional rate taxpayer £4,282.
That’s based on £20,000 invested at the start of each year over a five-year period, interest of 3% compounding daily, all interest paid into the account and any tax liability paid from outside of pot, and allowances remain the same.
Pros
- Tax-free savings
- Great interst rates
- Large range of investing accounts
Cons
- Better rates are available direct
- Interest returns are not as good as the stock market
- Pricing (4.5)
- Market Access (5)
- App & Platform (5)
- Customer Service (5)
- Research & Analysis (5)
Overall
4.9
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
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