Cash ISA’s held by a bank are essentially risk free. I think Lloyds, like most of the high street banks, will only offer you decent interest on higher deposits and even then you are usually locked into the higher rate for a year or 2 while the funds remain in the account so you either lose the good interest rate or end up paying charges to withdraw your money before the end of the term. Ok if you’re happy to lock your cash away for 12-24 months.
The Trading 212 cash ISA offers 5.2% interest with daily interest payments and no charge or limits to you withdrawing your cash. In other words for short to medium term saving it’s a pretty good option. The one thing to bear in mind is that Trading 212 will invest your money in a ‘Qualifying Money Market Fund’ (QMMF) something the banks don’t do. This strategy does mean that if Trading 212 became insolvent your money isn’t protected by the UK government (it is in any of the cash ISAs in a high street bank). A QMMF is a highly regulated, low risk investment vehicle that usually buys up things like government bonds so the chances of it tanking to the point that Trading 212 becomes insolvent and you losing your money is very small but still a risk…
The other option is a stocks and shares ISA. Essentially that’s just a way of investing in the stock market without paying tax.
Everyone in the UK has an ISA allowance (cash ISA + stocks and shares brought via an ISA) of £20k a year.
Obviously you understand the risk/reward of stock market investing…
If you fancy opening an ISA with Trading 212 then here’s my referral link. I believe we both get some free shares
RE: Future plans