Things can get a little trickier if your savings are held in a savings platform.
Savings platforms – such as Raisin UK or Flagstone – are websites that offer savings accounts from selected banks and building societies, in some cases offering exclusive deals that you won’t be able to find anywhere else. They can offer some of the best rates, too, which is why you’ll regularly spot them in our charts.
One benefit of savings platforms is that you’re not tied to a single bank or building society, and can instead choose between several different providers in one place and easily move your money between them. However, the downside is that your FSCS protection isn’t so clear-cut.
This is because the savings platform itself is only regulated as a payment firm, not a bank – it’s merely a kind of concierge service to help you find the best rates. This means that if it were to fail and it held your money outside of a protected account, you would not get your money back.
However, that isn’t the whole story. Each of the platforms has its own bank account where it keeps your money pending investment in your chosen bank or building society. If your money is in this hub or holding account which is provided by a regulated bank you will still have FSCS protection. You are always protected when your money is held in your chosen account.
This is why it’s essential to know who’s looking after your cash, and whether the necessary protections are in place. Here’s a quick overview of some of the most popular savings platforms and their hub account providers – and as you can see, all the most common ones are FSCS-protected.
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PLATFORM
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HOLDING ACCOUNT PROVIDER
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FSCS PROTECTED?
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Raisin UK
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Starling Bank
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Yes
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Flagstone
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Barclays Bank or HSBC
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Yes
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Hargreaves Lansdown Active Savings
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Barclays Bank
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Yes
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Aviva Save
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Starling Bank
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Yes
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Interactive Investor Cash Savings (provided by Flagstone)
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Barclays Bank or HSBC
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Yes
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Insignis Cash Solutions
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Barclays Bank
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Yes
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The account must be in your name to have suitable protection, and bear in mind overall FSCS limits too. The same £85,000 limit applies whether you’ve gone directly or through a platform, so if you’ve got £50,000 with Paragon Bank and another £50,000 held with Paragon but via a platform, you wouldn’t get the full £100,000 if it were to go bust, only the £85,000 maximum.
Similarly, if you’ve got savings with the hub account provider as well as through a savings platform, make sure that your savings don’t exceed the limit (unless you’re confident that your money won’t be kept in the hub account for long). Most platforms stipulate that any accounts offered by banks based in other European countries are protected by the equivalent guarantee scheme
Just bear in mind that, if things were to go wrong, timelines can be different. If you hold funds directly with a bank that fails, the FSCS should reimburse you within seven days. However, if it’s via a platform, it can take as long as three months to get your money back.
