Cash Platform

What are cash platforms, and should you be using one?
With interest rates at their highest levels in over a decade, savers are looking for ways to maximise returns on their cash. Traditional high-street banks often fail to offer competitive rates, leaving many wondering whether they’re getting the best deal. Enter cash platforms: a modern solution that helps individuals and businesses manage their savings more effectively, all while ensuring FSCS protection.

What is a cash platform?
A cash platform is a digital service that consolidates savings accounts from multiple banks into one place, allowing users to manage and monitor their money more easily. These platforms act as a “savings supermarket,” offering access to a variety of savings products from partner banks through a single application process.

Instead of manually searching for better rates or opening multiple accounts with different banks, a cash platform enables you to spread your savings across various institutions. This approach helps you get the best return while staying within the £85,000 FSCS protection limit for each bank.

How do cash platforms simplify savings management?
Managing multiple savings accounts and ensuring your money is working as hard as possible can be time-consuming. Cash platforms simplify this process in several key ways:

1. Single application process

Rather than opening separate accounts with different banks, a cash platform allows you to complete one application to access a range of savings products.

1. Consolidation of accounts
   • If you’re juggling savings across different banks or accounts, a cash platform brings everything together in one easy-to-use dashboard. This provides a clear view of all your balances and interest rates in one place.
2. Rate monitoring and switching
   • Cash platforms help you find competitive rates among their partner banks. Many platforms also notify you when a fixed-term deposit is about to mature, making it easy to reinvest or move your money without delays.
3. Efficient allocation of funds
   • For those with larger balances, cash platforms automatically allocate funds across multiple banks to ensure deposits don’t exceed the £85,000 FSCS protection limit at any one institution. This saves time and reduces the risk of exceeding coverage limits.
4. Tax reporting and administration
   • Many cash platforms provide a single tax certificate for all accounts, simplifying the process of reporting interest income on your tax return.

By automating these tasks, cash platforms make it easier to focus on your financial goals while reducing the administrative burden of managing savings.

Key benefits of cash platforms

1. Maximise interest rates
   Cash platforms provide access to savings accounts with some of the most competitive rates on the market. Unlike high-street banks, which often keep savings rates low, cash platforms work with partner banks that are eager to attract deposits, resulting in higher returns for savers.
2. Flexibility and liquidity
   Many cash platforms offer a mix of instant access and fixed-term accounts, letting you balance liquidity with higher returns. This flexibility means you can tailor your savings strategy to your personal or business needs.
3. Peace of mind with FSCS protection
   By spreading your savings across multiple banks, you can ensure each account stays within the £85,000 protection limit offered by the Financial Services Compensation Scheme (FSCS). This safeguard provides reassurance, even in the unlikely event of a bank failure.
4. Time efficiency
   The streamlined account-opening process, automated reminders, and consolidated management tools save time compared to managing multiple accounts individually.

Who may benefit from cash platforms?
Cash platforms may be suitable for:

• Individuals with significant cash savings: If you’re holding cash for a house deposit, emergency fund, or retirement, a cash platform could help you earn competitive returns while managing your accounts in one place.
• Small and medium-sized businesses (SMEs): Businesses with large cash reserves may find cash platforms helpful for balancing liquidity with optimising returns.
• Trusts and charities: Organisations seeking accessible savings options while maintaining FSCS protection limits may benefit from using a cash platform.

Note: FSCS protection depends on the proper allocation of funds across partner banks and monitoring total deposits across all accounts.

Are cash platforms right for you?
While cash platforms offer significant advantages, they may not be suitable for everyone. If you already have modest savings in a high-interest account with FSCS protection, you may not need a platform. However, for those with larger balances or businesses managing substantial cash reserves, cash platforms can provide a convenient way to optimise returns and simplify management.

We’re here to help: If you’d like to learn more about cash platforms or explore ways to make the most of your savings, our advisers can provide tailored guidance. Contact us today to discuss your options.

FSCS protection applies to eligible deposits up to £85,000 per financial institution. Proper allocation of funds across partner banks is required to ensure full coverage. Users should be aware of their total deposits across all accounts, including those outside the platform.

Disclaimer

The value of investments can go down as well as up, and you may not get back the full amount you invested. Past performance is not a guide to future performance, and past performance may not necessarily be repeated. Tax benefits depend on personal circumstances and current tax rules, which could change in the future. Information provided is for guidance only and does not constitute financial advice. Tavistock Investments Plc is authorised and regulated by the Financial Conduct Authority.