FT Plus Question for the big guys and shareholders

I know it’s a silly one and your initial response would be well if you don’t know that why are you even investing? Fair enough, once this is done and dusted can someone clarify on the, :”have not heard such a number in the cash ISA world since their inception let alone for a SSI - interest rate. However the number is missing information; it states 3% on cash amounts max £4000. Three percent doesn’t say much when it comes to investments. My usual declaration - I am not even close to be a novice investor and I have been at it for over 2 years. Also, apologies if I missed it on another post
Many thanks
Nicolas

I don’t understand the question, could you elaborate?

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From what I can tell, you are questioning the 3% return on unallocated funds for Plus customers?!

3% might not be close to the return you achieve on your shares, but it’s a fantastic risk-free return and a good incentive for Plus customers.

If you think your money is better allocated on shares - then invest all your money on shares. Simple.

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OK.
A lot clearer this time round.
Today is June 22nd and I am able to deposit £4000 in my FT Plus. With the simplicity you guys see it I am expecting a return of £120 by June 30th no? Or lets say by July 22nd because I need to live it there for a month even though it doesn’t mention such thing.

Its 3% per year, you have to leave it there a year. You’ll get back close to £10 a month which will essentially cover the FT plus fee.

If you want to invest that money, sure you would hope to make more than this trading, so its not the best return. If you were going to have plus anyway and this money would have been in a savings account as cash/emergency funds this is the best interest rate you’ll find (albeit without compounding).

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The interest is per annum not month. Otherwise you wouldn’t need to invest.

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Thank you Adam. That’s why my post is asking for “clarification”. Of course it’s not per month, it’s clearly per year but it’s not saying is where does the money sit; is it an account, a Cash ISA, is it compounding, if so daily/monthly. The ad say 3% for up to £4K so it can be misleading to those that they see FT just as a pretty app thinking they are playing CandyCrush. FT has come a long way I must admit though. Even though sarcasm is always instantly noticeable and most of it welcome, the website itself has gone a long way. I see IPO calendars, Investment hubs, investment fee calcs. Kudos to the team!

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If you know it’s not per month why did you make out as if it is?

It tells you here

It will be slightly less than £120. The 3% is an APR, to achieve this, the interest would need to be compounded over the year. However, if you start with £4000, after the first interest you’ll have something like £4009.80, of which only £4000 will be considered for interest in the next month because it’s interest on cash up to £4000. So, each month you’ll get slightly less than £10, over the year you’re likely to see about £117 return.

If you started with £3800, you would expect to get the full 3% return, in this case £114.

Just to be clear, it sounds like you’re expecting to use the account only for the interest and aren’t interested in using it for share trading. This isn’t what the interest is for, and you won’t make any money if you try to use it this way,

The purpose of the interest is to provide a way to get plus for almost free, so boosting their subscriber base. But you’re never really getting that 3% as a return on the cash because it will all be used to pay for the subscription. So, it’s not equivalent to a cash ISA, because if you treat it as such, the effective interest rate is 0% (actually slightly lower, as the interest won’t quite cover the cost of the subscription each month).

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No, both of these guesses are wrong.

Interest is calculated daily.

Interest is paid on something like the second or third week in the month. I have a hazy memory of it being the 12th working day, but I can’t remember. It’s covered in the big plus thread though.

The subscription fee is payable monthly on the day of the month you activated your plus membership.

The first month will be a partial month, unless you happen to have joined plus exactly a month before the next payment date,

Subsequent months will be a full month, which will earn on average slightly under £10 with the exact amount depending on the number of days in the month since the last payment date. Remember, less than £10 because the 3% figure is APR, so calculated based on compounding.

The final month, I don’t know about. Possibly you might only get the interest on the months when you’re still a subscriber, so you may lose a month of interest. Maybe someone who’s cancelled can clarify on this.

FWIW, on a typical month of 30 days you would expect to return £9.72 interest and on a typical 31 day month £10.04. This seems to be slightly rounded down by a penny from my calculations:
=((1.03^(30/365))-1) * 4000 = £9.73
=((1.03^(31/365))-1) * 4000 = £10.05

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Slightly off topic but relevant ish :joy: people keep banging on about the £9.99 a month cost and the £7 a month for SIPP but I haven’t ever read the actual costs being what I pay. This means either FT are undercharging me or everyone is over costing the price when discussing.

I pay 2 payments a month as I started on different days and the costs are £8.30 for Plus and £7 for SIPP and it says I get a “ISA refund (VAT @ 20%) £1.69” so the cost is only £15.30.

When I joined there was a long discussion about charges being in the ISA to save tax etc and now I see that whole discussion was pointless and more importantly I have 1 question. WHY, WHY, WHY are you not promoting a very good thing Freetrade?

Maybe I missed an announcement but would be surprised but this is really good and was obviously really wanted and it was a good opportunity to say actually we do this for our customers!

I know it isn’t a huge amount £1.69 but any good PR is is still good PR and should be utilised. Certainly not only found out by accident when checking bank statements. :joy: Unless of course it is an error and FT will come asking for more money off me :joy:

I just have Plus, having upgraded from an ISA account. I get charged £9.99 ever month and don’t get an ISA refund. Maybe it’s because you have a SIPP as well, or maybe because you opened your ISA when it was cheaper or something?

I get this on my Plus charge email

Plus amount (VAT exempt) £9.99
ISA refund (VAT @ 20%) £1.79
Final payment amount £8.20
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