Cater AllenFinding a Cash option, which pays a competitive rate of interest, allows the flexibility of instant access to capital and has more functionality than a simple deposit account is tough.

But investors and advisers alike now have a new option, in the form of Cater Allen’s innovative Cash Hub.

What is the Cater Allen Cash Hub?

Simply put, the Cater Allen Cash Hub is a transactional account, which sits at the centre of a portfolio and facilitates the movement of money, whilst paying a competitive rate of interest.

Investors and their adviser, if they use one, have 24/7 online access to the account, giving a transaction history, up to date balance and the ability to move money as required.

The Cash Hub can be used to receive:

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  • Credits from personal accounts
  • Income from investments
  • Maturity payments
  • Interest from monthly bearing accounts
  • Monies from disinvestments
  • Rental income from Buy to Let property
  • Dividends

The account can also be used to:

  • Pay fees
  • Make investments
  • Hold Cash until an investment in an alternative asset is made

What rate of interest is paid?

The Cater Allen Cash Hub currently pays interest of 1.00% gross AER on balances above £2,500.

Interest is calculated and paid monthly.

Whilst 1.00% doesn’t sound that attractive, it actually compares very favourably with the average rate of interest on the Cash accounts of most platforms and SIPPs (Self-Invested Personal Pensions).

Commenting on the Cash Hub Peter Beavis from Cater Allen said: “Cash as an asset class has always been overshadowed by the investment element of any portfolio. However, the safety and prudence inherent in Cash means the opportunities it offers should be scrutinised more closely – in terms of not only wringing from it every last possible ounce of return – but also facilitating an even more holistic approach to planning by providing incremental insight into the assets available for investment.”

Why do investors need a new cash option?

The Cater Allen Cash Hub isn’t designed to be a long term home for an investor’s Cash, after all, the rate of interest is significantly below inflation. However, there are a number of reasons why an investor may want to hold Cash and receive some interest at the same time.

Volatile stock markets Investors who have come out of the stock market in response to recent volatility will want a temporary home, which pays some interest, until they decide to reinvest

Poor value from many SIPP providers and platforms Because of the functionality offered by the Cash Hub, which makes it much more useful than a simple deposit account, it’s an ideal alternative to the Cash accounts offered by platforms, Wraps and SIPPs and in most cases it pays significantly more interest

Waiting to make a major purchase or investment Before making a major purchase, for example buying a property in a SIPP, investors might as well try and get some interest on their Cash

Cash is the ultimate safe haven but over and above this, it affords the investor and their advisor absolute flexibility. Cash, as Warren Buffet’s biographer Alice Schroeder noted, is regarded by him as “a call option with no expiration date, an option on every asset class with no strike price”.

Who is Cater Allen?

Now owned by Santander, Cater Allen has a long history, having been founded in 1816.

Cater Allen is regulated here in the UK and is a member of the UK Financial Services Compensation Scheme (FSCS), trading under a separate licence to Santander, its parent company. This allows depositors to hold up to £85,000 with both institution and still be fully protected.

Learn more about the Cater Allen Cash Hub

If you are an adviser, click here to read the Adviser Guide.

Investors should click here to read the Client Guide.