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Hargreaves Lansdown Active Savings Review

Hargreaves Lansdown Active Savings promises to take away the hassle and stress of finding the best savings rates accounts.

To be fair, finding the home with the best savings rates for your cash can be pretty tiring. Searching the best-buy tables only to find out after you’ve moved your money that the rates have been lowered is no fun and frankly frustrating.

With Hargreaves Lansdown Active Savings, it claims to take that financial stress away. Active Savings promises to put you in control and allows you to pick and mix from a range of savings products and providers, all from a single platform.

‘Great Returns, No-Hassle’ is the strapline, but is this really such an excellent place for your cash and should you open an account?

Who is Hargreaves Lansdown?

In case you haven’t heard of them before, Hargreaves Lansdown is one of the UK’s leading savings and investment platforms. It’s been around since 1981 and is trusted by 1.3 million clients (one of them being me). They currently look after nearly £100 billion in client funds and are listed on the FTSE100.

When you open an account, you deposit your cash and then choose the right savings product for you. You get the choice between instant access savings and fixed terms. You can then mix and match, meaning you can have some of your cash tied up in fixed terms and some in easy access.

Active Savings provides competitive rates all in one interface. Plus, you can move your money between accounts easily making it very attractive for those savvy savers short of time (or those who hate searching the market).

At Eat Sleep Money, we are fans of Hargreaves Lansdown and have used its products for years. In our opinion, it has one of the best platforms and mobile apps, however, it is not the cheapest.

If you want to learn more about the company and their offerings, then check out our Hargreaves Lansdown LISA and ISA review.

What is Hargreaves Lansdown Active Savings?

Active Savings lets you pick and mix savings products from a range of banks and building societies, all from one online account. Hargreaves Lansdown states that once you’re set up, there’s no additional paperwork or hassle when choosing between savings products. This means you don’t have to waste time trawling the market. Simply pick your savings product, click, and go.

At Eat Sleep Money we love it when providers make picking products simple and easy. However, this usually comes with a trade-off which we’ll discuss later.

Heads up – We aim to produce honest and accurate content, however, we are not financial advisors. If you need financial advice, Unbiased can connect you with a suitable professional for free. Some of our links may earn us a small commission to help us run the site.

How do I open an Active Savings account?

Opening an account is easy. If you’re an existing Hargreaves Lansdown customer, you can open an account in about 60 seconds from your web login. You can’t open a new account via the Hargreaves Lansdown mobile app yet. For new customers, Hargreaves Lansdown states the application takes around 10 minutes.

You can open a Hargreaves Lansdown Active Savings account here.

All you’ll need is a debit card to deposit money and your bank details so you can withdraw your cash. Furthermore, you can open an Active Savings account for as little as £1.

Once your account is open, you have 30 days to choose a savings product. Your savings options will all be nicely listed out, making comparing and choosing nice and easy. As the market is constantly changing, we haven’t listed out all the options here. It’s best to check directly on Hargreaves Lansdown.

In addition, Hargreaves Lansdown is currently offering cashback when you open a new account. However, the rewards are so small that I wouldn’t let this necessarily impact your decision.

Additional Security for existing customers

One thing to note is that Hargreaves Lansdown uses Multi-Factor Authentication for customers with Active Savings accounts. This is a regulatory requirement and means you will be sent a text message with a code that you will have to input when you log in. For existing SIPP or ISA customers, this represents another security step which you will not be used to, but it’s certainly a good thing.

Hargreaves Lansdown Active Savings fees

There are no fees to use this service. However, some have reported that they can get better rates if they go directly to the provider instead of through Hargreaves Lansdown. After testing this I found it not to be true. However, this was only a snapshot in time. My findings can be found in the table below.

Hargreaves Lansdown states “…we don’t charge you directly, instead, we charge our banking partners. This means the same or similar products offered directly by the banks and building societies may have different rates to those available on Active Savings”.

Essentially, this means that you may find better rates directly with the provider depending on the commercial arrangement between them and Hargreaves Lansdown.

Rate Comparison - HL Direct Savings vs going direct to provider

Hargreaves Rate Direct rate
Investec Easy Access 0.55% pa 0.55% pa
Paragon Easy Access 0.50% pa 0.50% pa
Coventry Building Society Easy Access 0.30% pa 0.30% pa

Should I go direct to the provider?

While the above comparison only looked at the rates at a certain point in time, it’s worth checking to see if you can get better rates.

However, even if you can get better rates, remember that the purpose of this account is for savvy savers who are short of time. As with all things in life, there is a compromise to be had.

With Active Savings you may not always get the absolute best rates, however, your rates will be competitive. What you sacrifice in rates, you get back in convenience.

For most people, the difference in rates is going to be negligible, so we need to keep things in perspective.

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Can I get better rates?

Let’s take an example; the best easy access savings account (such as Aldermore), could be offering 0.60% pa interest. By comparison, Hargreaves Lansdown‘s best offer could be 0.55% pa interest. The difference for someone with £10,000 in savings is £5 per year! That’s hardly worth worrying about.

So yes, you can technically get better rates. But for me, my time is more valuable than searching the market each month and continually moving my cash chasing the best rates for the sake of a few pounds a year. And I would suggest yours is too.

Please be aware that rates are always changing, the rates above were correct at the time of writing so only use this as a guide.

Fundamentally, small differences in interest rates won’t return significant financial gains. Focusing your time on your larger goals will most likely have a more dramatic impact on your wealth.

If you have not laid a solid financial foundation, then it’s worth focusing on this first. You’ll get much more bang for your buck.

Check out our Financial Fitness Programme to make your money game stronger and create the building blocks of greater personal wealth without needing to invest a load of time. If you subscribe (below) we’ll even give you the first chapter for free as a thank you.

For those chasing better returns than what’s offered by savings accounts, then check out our Beginners Guide to Investing. Over the long-term, investing has beaten savings accounts by a big margin. However, it’s not for everyone as it carries risk and historical performance is not a guarantee of future returns. Our guide helps you learn the fundamentals and limit your risk.

Can you wrap your Active Savings account in your ISA or SIPP?

The short answer is no, despite feedback from Hargreaves Lansdown customers that they would like to wrap Active Savings into their SIPP or ISA.

Currently, Active Savings sits outside SIPP or ISA wrappers and because of this your gains are subject to tax. For basic rate 20% income taxpayers, this means if you earn over £1,000 per year (the current 2019/20 tax-free savings allowance) then you’re going to need to consider tax. For higher rate 40% taxpayers, this threshold drops to just £500 per year.

Let’s keep things in perspective, though. For this to be relevant. higher rate (40%) taxpayers would have to put over £90,000 in their 0.55% savings account. And for 20% taxpayers, this would be double, or over £180,000! Therefore, this won’t be a problem for the vast majority of people.

If you are holding a lot of cash, then you may want to consider investing some of your money alongside savings. Why not check out our beginner’s guide to investing and our Hargreaves Lansdown ISA review.

Is my money safe with Hargreaves Lansdown Active Savings?

Yes. Hargreaves Lansdown and the banks you put your money with are protected by the FSCS. This means that the first £85,000 per banking institution is protected.

When you deposit money with Hargreaves Lansdown, it’s put into a ‘cash hub’, which is held with Barclays Bank. Once you’ve chosen your savings product, your money is moved from the cash hub over to your chosen provider. If you don’t choose a place for your money, then after 30 days Hargreaves Lansdown will return it to you.

Hargreave Lansdown Active Savings FSCS protection

Hargreaves Landsdown Active Savings vs Chip app

The competitive landscape of active savings products on offer is growing.

Chip app is one such competitor that is using Artificial Intelligence to automatically improve people’s savings rates.

It also offers some the best of interest rates currently available at 1.25%. However, this is for the invite-only ‘Chip+1‘ account which comes with an account fee (see here to get the VIP code).

So, better headline interest rates than Hargreaves Lansdown Active Savings (which is free), but it comes at a price. Depending on how much you’re saving, it may or may not be worth it.

You can read the full Chip app review here, plus use our exclusive VIP code to access this special account.

Hargreaves Lansdown Active Savings - what we like

  • Choice – pick from a decent range of products and terms
  • Ease – move money between products easily
  • Visibility – see your savings products (and investments if you use HL) in one account
  • Speed – no more logging into multiple places, so less hassle
  • Free – there are no charges to use this service
  • Platform – the Hargreaves Lansdown site and app are one of the easiest to use
  • Protection – FSCS protects your cash

Hargreaves Lansdown Active Savings - what we don't like

  • Choice – it’s decent, but you don’t get access to the full market
  • Rates – you trade convenience for lower interest rates, typically
  • Competition – you might get better rates going direct to a provider
  • Extra steps to log in – as an existing customer, I’ve found it frustrating now having to access my account using additional information (known as Multi-Factor Authentication). Before having Active Saving, I didn’t have to do this. However, this is a regulatory requirement so we can’t really argue with it, and more security can only be a good thing.
  • Transfer funds to ISA or SIPP – you can’t move your funds from Active Savings into your ISA or SIPP account. Instead, you have to withdraw funds and then deposit them into your chosen account.

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Should I open a Hargreaves Lansdown Active Savings account?

More and more financial providers are trying to add value by providing convenient access to other products via the interface that their customers are used to. Hargreaves Lansdown has delivered this really well with Active Savings. It’s proved a popular product with financially savvy people who are time-poor. Its popularity has also been helped by the continual changes in the savings account market experienced by most savers.

For most people, chasing rates is a thankless and boring task. We are all currently chasing extremely poor returns on our savings, so giving this task to someone else and making it easy to swap makes sense to me.

While Active Savings may not provide the absolute top rates, I feel that this is more than made up for in the convenience it provides. You can start from as little as £1, so there’s minimal risk trying it out and seeing if you’d benefit from hassle-free savings account swapping.

You can open your Hargreaves Lansdown Active Savings Account here.

If you want to learn more about other Hargreaves Lansdown products, then check out our LISA and ISA reviews here.

Here’s to your Financial Fitness!

EatSleepMoney.co.uk does not offer financial advice and is intended for reference/information only. Remember, you should always carry out your own research and/or take specific professional advice before choosing any financial products or services or undertaking any business or financial venture. If you need financial advice Unbiased can connect you with a suitable professional for free. Investments may go up as well as down and you may get back less than you put in.

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