Yes, the Moneyfarm Cash ISA is FSCS-protected up to £120,000 per eligible person, with cash held via qualifying money market funds managed by regulated institutions. However, because the rate is variable and linked to these funds, returns can change over time.
Moneyfarm Cash ISA Review: 3.69% AER Tax Free Savings
Account: Moneyfarm Cash ISA
Description: Moneyfarm’s Cash ISA offers a competitive introductory rate and flexible access to tax-free savings. With a boosted first-year return and daily interest, it aims to combine the simplicity of a savings account with the convenience of an investment platform. However, the headline rate comes with several conditions that savers should understand.
How the Moneyfarm Cash ISA Works
Moneyfarm’s Cash ISA allows savers to earn tax-free interest on cash savings, with a current introductory rate of 4.33% AER (variable) in the first year. After 12 months, the rate drops to 3.51% AER (variable).
Interest is calculated daily, and you can deposit up to the £20,000 annual ISA allowance each tax year. Moneyfarm also allows free ISA transfers, so existing Cash ISA balances can be moved into the account without affecting your annual allowance.
Unlike traditional bank savings accounts, Moneyfarm holds customer cash in Qualifying Money Market Funds (QMMFs). These funds invest in short-term, low-risk instruments and are designed to act like cash while generating interest. The rate paid on the account is linked to the yield of these funds, meaning it can change if market rates move.
The account also offers some flexibility, allowing withdrawals when needed without penalties.
What’s the Catch?
The 4.33% headline rate only lasts for the first 12 months, after which the account reverts to 3.51%.
To maintain the boosted rate, savers must keep at least £500 in the account and limit withdrawals to three per year. Exceeding this reduces the rate to the lower level.
Finally, because savings are held in money market funds rather than a bank deposit, returns are variable and can change depending on market conditions.
Pros
- High interest rate
- No fees
- FSCS protection
Cons
- £500 minimum balance
- Limited withdrawals
- Variable interest rate
- Cash ISA Rating (5)
Overall
5
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.
Richard’s contributions and expertise have been recognized by respected publications such as The Sunday Times, BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
To contact Richard, please see his Invesdaq profile.
