Low-cost investment platform AJ Bell Dodl* has introduced a market-leading 5.09% AER variable rate on cash held in its investment ISA or investment LISA accounts. The new interest rate doesn't have any fixed-term restrictions attached to it, which means investors can pull their cash whenever they like if they need to use it. The usual government withdrawal penalties may apply with the LISA account, however.
In addition to this, there is no bonus rate tied to the offer. Typically, when there is a bonus rate, the higher interest rate only applies for the promotional bonus rate period after which it reverts to a lower rate. Instead, the 5.09% AER variable rate will be adjusted with the base rate which is currently 5.25%.
The new interest rate is part of an AJ Bell Dodl initiative to encourage cash savers to start investing for the long term. An FCA survey found that nearly 60% of savers (or close to 10 million adults) with investable assets amounting to £10,000 or more held more than 75% of their money in cash in 2022. But, more than 4 million of these savers said they wanted to invest some of their cash.
AJ Bell managing director Charlie Musson added: "By offering a leading rate of interest on cash deposits on the Dodl app, we’re giving customers the flexibility to save and invest in one place. For beginner investors, it gives them the opportunity to build up cash savings and start investing when they feel ready."
How does AJ Bell Dodl's new rate compare?
Other market-beating easy access accounts include Chase, which currently has a boosted rate offer of 5.10% AER until 16 January 2025. This will then revert to a lower rate when the promotional period ends. Investment platforms like Trading 212 also offer market-beating rates of 5.2% on uninvested cash held in their accounts.
That being said, AJ Bell Dodl's new interest rate is one of the best rates on the market right now.
How can I get the 5.09% rate on my cash with AJ Bell Dodl?
The new rate is available to existing and new customers who have an AJ Bell Dodl investment ISA or investment LISA. You're likely to be eligible for at least one of the two accounts as long as you're at least 18 years old and a UK resident.
You can open an eligible account in minutes via the AJ Bell Dodl* website where you can download the app. Once the account is open, you'll need to deposit a minimum of £100 or set up a monthly direct debit of at least £25.
The typical ISA allowances apply. You can invest £20,000 across all of your ISAs and you can invest up to £4,000 in your LISAs. However, if you have existing ISAs, you can transfer them to AJ Bell Dodl and there's no limit on the amount you can transfer.
Interest on your uninvested cash within the accounts will then accrue daily and be calculated on a compound basis. It'll be paid into your ISA and LISA accounts every quarter. The new interest rate will apply to all uninvested cash including government bonuses earned via the LISA.
What is AJ Bell Dodl?
AJ Bell Dodl is a low-cost investment app which charges just 0.15% in account fees (or a minimum of £1 per month). With AJ Bell Dodl, you can invest in a range of AJ Bell funds, themed investments, and shares such as Amazon, Alphabet (Google), NVIDIA, and Microsoft. The accounts on offer include an investment ISA, an investment LISA, a pension, and a general investment account.
The platform is geared towards beginner investors and it offers a range of resources to help you learn the ropes via the Learn Centre. This includes a selection of guides and information to help you get started with long-term investing.
As with any investment account, your capital is at risk and you could get back less than what you put in. If you're unsure whether investing is right for you, check out our beginner's guide to investing. If you think you're ready to take the plunge, and you're interested in finding out more, check out our independent AJ Bell Dodl review.
If a link has an * beside it this means that it is an affiliated link. If you go via the link, Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. The following link can be used if you do not wish to help Money to the Masses or take advantage of any associated offers - AJ Bell Dodl
