Hargreaves Lansdown (HL) has seen deposits into its cash ISA products increase by over 500% in June year-on-year.
The financial services firm said that its savers are preferring easy access ISAs compared to fixed rate ISAs, with 90% of instructions being placed into easy access products on HL’s savings platform.
Cash ISA rates offer greater returns than savings accounts, with top easy access accounts boasting rates of 5.2%, compared to 5.1% on unwrapped products.
HL said that its cash ISA remains the "only savings platform" to offer clients the ability to spread their ISA allowance across multiple banks and multiple types within one single ISA.
Savers can get £4350,000 FSCS protection by using HL’s cash ISA, compared to £85,000 in traditional banks and building societies, because it offers access to multiple institutions.
Head of active savings at HL, Mark Hicks, said: The cash ISA season is lasting even longer than the central heating season this year. With cash ISA rates offering greater returns than savings accounts, deposits into ISA products on active savings remain significantly higher than this time last year. This month is seeing a 500% increase on ISA deposits compared to last June. Bank of England data also shows cash ISAs as being the fastest growing sector of the savings market. Heightened activity that used to be focused on just March and April, now looks to be extending into the summer months.
"Savings platforms can offer clients greater choice and more flexibility to take advantage of the new ISA regulations, which allow clients to subscribe to multiple ISAs. Our cash ISA platform at HL is the only offering in the market that allows clients to spread their ISA allowance across multiple banks, within one ISA wrapper. The rates on offer still outperform savings accounts, particularly so for higher rate taxpayers.
"Clients on our platform are snapping up easy access ISAs, compared to fixed rate ISAs. This is likely to owe much to the fact that clients can earn over 0.5% more. We will be looking to add additional banks and multiple fixed terms in the cash ISA, providing our clients with more choice and flexibility and to cater towards our clients’ needs over the next year."
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