Discussion
My experience is the similar - request, then 24 hours later it's on the holding account, then withdraw from that and it's transferred to your nominated bank account, sometimes the same day, but worst case next day.
No interest on the holding account, but there is a decent 'instant access' HSBC offering. The holding account is really only for very short term funds in transit to somewhere else.
I like Flagstone as I have different fixed term deposits with different providers and it's just easier to have everything in one place. It used to be recommended by Money Saving Expert, but these days they favour Rasin who seem to do something similar with slightly lower fees, but I'm too lazy to change.
No interest on the holding account, but there is a decent 'instant access' HSBC offering. The holding account is really only for very short term funds in transit to somewhere else.
I like Flagstone as I have different fixed term deposits with different providers and it's just easier to have everything in one place. It used to be recommended by Money Saving Expert, but these days they favour Rasin who seem to do something similar with slightly lower fees, but I'm too lazy to change.
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hstewie said:
hstewie said: Does anyone use Flagstone please?
If so how are they for accessing cash that's in easy/instant access accounts please?
Looking for a home for a fair amount of cash and quite like the idea of one place to go to see it all.
It is indeed a nice idea but I looked at several of them earlier in the year and couldn't get comfortable with the counterparty risk associated with them.If so how are they for accessing cash that's in easy/instant access accounts please?
Looking for a home for a fair amount of cash and quite like the idea of one place to go to see it all.
Of course everyone has different risk tolerance and some might view the risks as acceptable.
LooneyTunes said:
It is indeed a nice idea but I looked at several of them earlier in the year and couldn't get comfortable with the counterparty risk associated with them.
Can you please elaborate on this ?I had understood that if your money is with an FSCS scheme, then you were covered by their protection. Even the holding account should be segregated client money.
What risk is it that you were uncomfortable with ?
Last section of this seems to say that all deposits should be FSCS protected - unless you pick a fund that clearly says it isn't I suppose.....
https://www.which.co.uk/money/savings-and-isas/sav...
https://www.which.co.uk/money/savings-and-isas/sav...
Car bon said:
LooneyTunes said:
It is indeed a nice idea but I looked at several of them earlier in the year and couldn't get comfortable with the counterparty risk associated with them.
Can you please elaborate on this ?I had understood that if your money is with an FSCS scheme, then you were covered by their protection. Even the holding account should be segregated client money.
What risk is it that you were uncomfortable with ?
Primary concern is that they’re all small companies, generally loss making, with limited resource.
The FSCS protection is reliant on the quality of information provided by the deposit aggregator. Bear in mind that not all of these firms actually open/manage accounts in your name, then add in the fact that these providers will be attractive targets for fraud/hacking, and it becomes more obvious why top class operations, IT, and security are critical. They provide insufficient information to fully evaluate but it’s all stuff that is hard to achieve within a very small company environment.
Overall, from the information I could find, I couldn’t make the counterparty risk stack up for me.
There are also risks to the deposit taking banks, as outlined in a “Dear CEO” letter from the FCA a couple of years ago that highlighted the liquidity issues potentially presented by these providers.
BobToc said:
I think the risk you really have to get comfortable with is that you’re not exposed to Flagstone. That’s certainly the pitch, but I must admit I’ve taken it somewhat for granted up until this thread.
That you are exposed to the provider is the main issue I have with deposit aggregators and why I don’t use them. Some interesting and thought provoking responses so far 
I must admit I can see the point about risk but I don't know if I'm being unreasonable given I have plenty with the likes of Vanguard and HL where it feels a similar principle applies.
Still got a bit of thinking to do about this as there's all sorts of stuff in the mix such as gilts and how much I want in "cash" v "cash like" etc.
I must admit I can see the point about risk but I don't know if I'm being unreasonable given I have plenty with the likes of Vanguard and HL where it feels a similar principle applies.
Still got a bit of thinking to do about this as there's all sorts of stuff in the mix such as gilts and how much I want in "cash" v "cash like" etc.
bhstewie said:
hstewie said: I must admit I can see the point about risk but I don't know if I'm being unreasonable given I have plenty with the likes of Vanguard and HL where it feels a similar principle applies.
The likes of Vanguard and HL are at a completely different scale and point in their corporate evolution to the deposit aggregators. They’re not risk free as counterparties (none ever are) but i’d place money with them that I wouldn’t put with an aggregator. Car bon said:
Thank you.
I guess it's a similar risk to Revolut etc. except I only keep under a months spending on Revolut vs a couple of years worth with Flagstone.....
Actually, they sound somewhat similar to IM (except the loss making bit) and I have quite a lot more with them.
Surely IM and Flagstone are not comparable, don’t Flagstone only offer bank deposit accounts and no investment in the market (funds). I guess it's a similar risk to Revolut etc. except I only keep under a months spending on Revolut vs a couple of years worth with Flagstone.....
Actually, they sound somewhat similar to IM (except the loss making bit) and I have quite a lot more with them.
tighnamara said:
Surely IM and Flagstone are not comparable, don’t Flagstone only offer bank deposit accounts and no investment in the market (funds).
They offer different products, however, the principle is still the same - you give them your money and trust them to do the right thing with it. So I feel I have no more counterparty risk with Flagstone than I do with IM - and I'm comfortable with IM.It's actually clearer with Flagstone - they tell me exactly where my money is - the name of the institution holding it, whereas IM don't (or maybe I haven't looked hard enough).
Flagstone claim to be managing £10bn in funds and seem to have a lot of big name partners. There's always a risk with anyone you deal with though..... I accept that others are (probably rightly) more cautious than I am though.
bhstewie said:
hstewie said: Thank you 
Do you know if the holding account pays any interest and do you know if interest is reported directly to HMRC the same as it would (should!) be if you held an account directly with a bank or do you have to report it yourself?
The holding account doesn't pay interest but as someone said above, there's a HSBC instant access account which allows up to £85k/£170k for joint accounts at just over 5%.Do you know if the holding account pays any interest and do you know if interest is reported directly to HMRC the same as it would (should!) be if you held an account directly with a bank or do you have to report it yourself?
Each April Flagstone generate a certificate of interest for you to use on your tax return to declare the interest.
LooneyTunes said:
The likes of Vanguard and HL are at a completely different scale and point in their corporate evolution to the deposit aggregators. They’re not risk free as counterparties (none ever are) but i’d place money with them that I wouldn’t put with an aggregator.
It's a fair point on scale.Looking at easy access accounts must admit Santander instant access @ 5.2% looks a lot simpler and probably less hassle than this.
It's a nice problem to have but I'm really struggling with what to do with cash at the moment.
Being taxed on interest sucks as does locking money away to get better rates.
It's a nice problem to have but I'm really struggling with what to do with cash at the moment.
Being taxed on interest sucks as does locking money away to get better rates.
If you’ve got a reasonable amount to deal with then just stagger the notice periods: some at 1yr, some at ~90 day, and some instant/near-instant.
If you want to optimise further then it’s just a case of periodically giving notice on holdings that need it and the re-depositing the funds when they mature in order to keep the liquidity balance that you’re after.
Even at 90 day you can get well over 4% these days and close to that for near-instant/instant access, leaving you with a pretty good blended rate. Just choose banks carefully to make sure you understand what protection actually applies and, if going a over those limits, that you’re comfortable doing so.
One other thing to consider is that whilst notice accounts don’t allow withdrawal some may still allow early closure (albeit perhaps with a loss of interest).
If you want to optimise further then it’s just a case of periodically giving notice on holdings that need it and the re-depositing the funds when they mature in order to keep the liquidity balance that you’re after.
Even at 90 day you can get well over 4% these days and close to that for near-instant/instant access, leaving you with a pretty good blended rate. Just choose banks carefully to make sure you understand what protection actually applies and, if going a over those limits, that you’re comfortable doing so.
One other thing to consider is that whilst notice accounts don’t allow withdrawal some may still allow early closure (albeit perhaps with a loss of interest).
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