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When looking for a home for your clients’ cash, NS&I may well feature on your list of potential providers. With its unique deposit protection guaranteeing every penny invested, it’s often considered the holy grail for savers.
But NS&I’s appeal has somewhat diminished in recent years. It’s no longer the obvious choice for your clients’ rainy day fund or sudden windfall.
Its fall from grace has come at a time when finding a suitable place for clients’ cash deposits has never been more crucial.
As world events continue to unsettle stock markets, savers remain wedded to cash savings. Official figures show 75% of all ISA accounts opened in the 2019/20 tax year were in cash.
It’s hardly surprising. People want their money to be easily accessible. At hand in case of an emergency.
So, why should you think twice before recommending NS&I to clients? Why has this once so-popular brand lost its lustre?
Here are four reasons:
1) You can get better interest rates elsewhere
Your clients’ cash may sit largely untouched for periods of time but that doesn't mean you shouldn't put it to work. Yes, interest rates are still pretty dismal, despite a couple of recent base rate hikes. But some providers are offering relatively competitive rates, if you look hard enough.
NS&I is not one of them.
Even after it was forced to increase rates on a number of its savings products at the back end of last year in order to meet its fundraising target for the 2021/22 tax year (which it looks increasingly like it’ll fail to do), rates on NS&I products are far from market leading.
Take its Direct Saver, for example. This easy access account pays a rate of 0.5% while Akoni Easy Access currently pays a market-leading 0.89%.
2) You can get gold-plated protection elsewhere
Yes, the guaranteed protection NS&I offers is an attractive perk. But it's not the only way to safeguard your clients’ cash.
As long as their money is spread out across different banks and building societies and they don’t have more than £85,000 (or £170,000 for joint account holders) with one institution, they’re protected under the Financial Services Compensation Scheme (FSCS).
The FSCS protects cash deposited by individuals, charities and businesses, no matter their size.
It even temporarily protects balances of up to £1 million for up to six months in certain instances such as an inheritance or when depositing the proceeds from the sale of a primary residence. So if your client brings in this type of big cash lump sum, their money is still safe.
3) The customer service is woeful
You’d expect a financial institution with the heritage and prestige of NS&I to have spent time and effort perfecting its customer service.
According to Trustpilot, this couldn't be further from the truth. Shockingly, 86% of the 1,735 NS&I reviews on the platform were rated ‘bad’, the lowest rating possible.
“Simply appalling”, “The agony continues” and “Step back in time with NS&I” are just some of the comments left by dissatisfied customers.
In a world of neo banks and smart technology, there’s absolutely no need for your clients to put up with shocking customer service.
4) New tech opens more doors
New technology has made it easier for you to be more creative with your clients’ cash. And add more value.
You no longer have to stick with the same old vanilla brands. Cash management platforms like ours let you quickly and efficiently book rates and open accounts for your clients, safely and hassle-free.
While you once had to spend hours searching the web for the best deals and be quick off the mark to snap up much better rates, now cash management platforms do the job for you. And your client only needs to do one application and one round of due diligence to access all the products on offer.
The range of deals available on these platforms - from both high street and specialist brands - means your clients can have accounts with multiple FSCS-protected banks. So their money is safe.
The award-winning Akoni cash management platform lets you and your client view all their savings on one handy dashboard in real time and seamlessly secure new rates as and when they become available.
Subscribe to Akoni now and discover the easy way to start earning more interest for your clients.