Find out if it’s any good
Investing app Trading 212 is paying 5.1% variable on its new Cash ISA. Here’s what you need to know.
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What is Trading 212?
As you’ve probably guessed, Trading 212 is an investment provider, allowing its customers to buy shares, exchange-traded-funds (ETFs) and some precious metals. It currently has a General Investment Account (GIA) and Stocks and Shares ISA.
It also released its own card earlier this year, and started to pay interest APY on uninvested cash.
Trading 212’s Cash ISA explained
The Trading 212 Cash ISA is pretty packed with features when compared to other Cash ISAs on the market. Here’s the standout information:
- 5.1% AER variable. This makes it the highest paying Cash ISA on the market at the moment.
- Flexible ISA. This means that you can withdraw from it and return money to it freely within the tax year without impacting your ISA allowance. Usually your deposits are all counted up to work out how much of the allowance has been used, but in this case, it’ll be the net amount with withdrawals considered.
- FSCS protected. Your deposits will be protected by the Financial Services Compensation Scheme, which means that up to £85,000 of your deposits are protected if Trading 212 were to go bust.
- Minimum £1. You can save as little as a pound with this account.
- Transfers in. You can transfer in your ISA from another provider and you’ll be able to freely transfer between your Trading 212 Stocks and Shares ISA as well.
- Paperless. No more letters in the post or sending back signed forms. This will be managed completely in the mobile app or on the website.
What is an ISA?
An individual savings account (ISA) is a tax-free place to save your money. You can save up to the annual limit of £20,000 across all ISAs without having to pay any tax on your interest. Cash ISAs are ones for cash with a set annual interest rate, while you can also get Stocks and Shares ISAs for investing.
We have a full guide on ISAs if you want to learn more about the different types and how they work.
How much can you earn with the Trading 212 Cash ISA?
The Trading 212 ISA will pay 5.1% AER variable. This means the rate can change anytime. In fact, prior to 9 September 2024 the account paid 5.2%.
If you save £1,000 for a year at this rate, you’ll earn £50 in total, and of course pay no tax on the interest.
When is interest paid?
Interest is paid daily with the Trading 212 Cash ISA.
Are there any fees for the Trading 212 Cash ISA?
Nope! This is a fee-free account.
Can you withdraw your cash with the Trading 212 Cash ISA?
You can make a withdrawal whenever you want to with the Trading 212 Cash ISA. It’s a flexible ISA, which means you can withdraw from it and return your funds without it counting twice on your ISA allowance. Typically, your deposits are counted up, regardless of what you withdraw.
It’s worth noting that withdrawals can take up to three business days, so make sure to keep this in mind if you think you’d need quick access to the money.
How to get the Trading 212 Cash ISA
You’ll need a Trading 212 account. It’s worth finding out if a friend has already got an account as they can offer you a referral link where you’ll both get a free share.
To get the Cash ISA, you just need to choose the Cash ISA option in the dropdown menu — you might need to enter a few additional details, then you simply deposit funds and you’re good to go.
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Is the Trading 212 Cash ISA any good?
Zoe’s analysis
The Trading 212 Cash ISA offers a great rate, and it’s simple to sign up for and manage. Withdrawals take up to three working days, so it’s not an instant access account. You may need to plan ahead with your withdrawals.
Even with the rate cut from 5.2% to 5%, it’s still very competitive right now.
The current best easy access savings pays 5.2%, but you’re limited to a balance of £3,000, while the best Cash ISA is Chip at 5.12%, but you can only withdraw twice a year
Savers that don’t already invest might feel like Trading 212 is a little complicated and sometimes intimidating, but if you ignore all the investing stuff, you should get on fine.
Is the Trading 212 Cash ISA safe?
The Trading 212 Cash ISA is protected by the Financial Services Compensation Scheme (FSCS), which means that your deposits are protected up to £85,000 in the event that Trading 212 goes bust. This is the same as you’d get with a bank or building society.
Unlike the 5% savings interest rate on money held in Trading 212’s General Investment Account, the money held in your Cash ISA won’t be held in QMMFs. This means that it’s AER interest, not APY. More on that account here.
What do customers think of Trading 212?
Over at our sister site Smart Money People, customers of Trading 212 feel that the customer service is excellent, with an easy-to-use interface and app. We can’t yet get any insight into how customers feel about the Cash ISA as it’s still a pretty new product.
Trading 212 Cash ISA summary
Trading 212 Cash ISA
| Interest rate: | 5.1% AER variable |
| Minimum deposit: | £1 |
| Withdrawals allowed: | Yes |
| Transfers: | Yes |
| Flexible: | Yes |
5%? After a year maybe but your actual daily rate is much less thanks to daily compounding. The daily interest rate is about 4.875% so if you transfer away after a few months don’t expect 5% interest to have accumulated.
You have to leave your cash ISA with Trading 212 for a year before you accumulate interest equivalent to 5%. It might be nice to see interest being paid daily and therefore your cash ISA increasing daily but you’re not getting 5% interest each and every day because of compounding. I’m getting about 4.875% (was 5.065% at 5.2% AER) so I assume everyone else is the same. The starting daily rate was never made clear.
I checked and your understanding is correct.
That 5.1% is confusing. Anyway, even not counting the compound interest effect, the APR is around 4.97% on a 365-day basis. Still pretty good.
They’ve now halted transfers in. Not good.
Relatively easy to sign up. Because the interest compounds daily, the true rate is 5.34%. Only downside appears to be that withdrawals take up to 3 business days.
How do i verify with FSCS that it is in fact protected ? Trading 212 is not listed on FSCS website
Check out Martin Lewis’s explanation. Basically 212 (or at least the ISA) is backed by some top UK banks including Barclays and therefore is essentially defacto covered under FSCS.
Tues 21St May, I Received The Account Today, Via An Update Through Google Play Store.
I Would Like To Say The Interest Is Paid And Can Be Viewed Daily, So Even Though The 5.2% Is Variable If It Does Go Lower, Your Previous Interest Payment Will Have Already Been Accredited, And To The Best My Knowledge The Account Is Compounded.