Freetrade's Free Share Offer vs. Interest Rates on Uninvested Cash: Which is Better?

I received an email from Freetrade that caught my attention. They offered me a free share worth approximately 200 GBP if I deposited 20,000 GBP by a specific date within the next few months (unfortunately, I can’t recall the exact date). After doing some research, I discovered that Freetrade offers 1% interest for uninvested cash up to 2,000 GBP on a standard ISA account and 3% interest on up to 4,000 GBP uninvested cash on a plus ISA account. I plan to deposit my 20,000 GBP in cash before the end of this tax year and invest it gradually over the next year. However, I find Freetrade’s interest rates to be somewhat low, particularly in comparison to other providers (such as Vanguard, which currently offers 3.75% on uninvested cash). I believe that Freetrade should consider doing away with the free share offer and instead offer customers a more reasonable interest rate on their uninvested cash. What do you think?

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Vangaurd have just updated their terms on uninvested cash, you won’t get nowhere near 3.75% as of next month, I believe they have bumped their cut up to about 1.5%

Starting next month, Vanguard’s interest rate will decrease from 4% to 2.2%, with an additional 0.25% fee, resulting in a total rate of 0.195%. If you were to deposit 20,000 GBP at this rate and assume it stays constant, you would earn 395 GBP in interest. However, you must subtract the 30 GBP platform fee (0.15%), resulting in a total interest payout of 365 GBP over the course of one year.

On the other hand, Freetrade is currently offering a free share worth 200 GBP with a 20,000 GBP deposit. In addition, you have to pay 9.99 GBP a month to maintain the account, although this can be offset with the interest paid out up to 4000 GBP.

You don’t have to pay 9.99 to keep the account with Freetrade it’s 4.99 for an ISA

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If you have 20K of cash sitting in an ISA account, the PLUS account works out cheaper. The interest pays for the account fee.

Which other S&S ISA providers offer better rates bar Vanguard ?

When the Bank of England’s base rate was extremely low, Freetrade’s interest rate was considered good. However, prehaps Freetrade should make their interest rates more fluid rather than fixing them.

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