NatWest ISA at a glance
With plenty of choices for UK residents to save and invest tax-efficiently, it can be hard to find the right platform to use. So, we’ve created this NatWest ISA review to give you an insight into what this particular provider can offer for your savings and investments.
The NatWest ISA presents a straightforward way to save and invest for yourself or for your child.
Looking at the competition, NatWest’s ISA offerings stand out because of:
- Simple investing with ready-made portfolios.
- The ability to use a stocks and shares ISA, Junior ISA (JISA), or a cash ISA.
- Competitive fees.
Want to know more about the NatWest ISAs? To ensure you completely understand this account, throughout this NatWest ISA review, we’ll explain everything you need to know. This will include all the fees involved, the types of ISA accounts available, how it compares against competitors, and the steps you need to take to transfer your ISA.
What is an ISA?
An ISA (individual savings account), is a tax-efficient account for saving or investing. There are a number of types of tax-efficient ISA accounts available to adult UK residents.
The main types of ISA accounts are:
- Cash ISA (£20,000 limit)
- Stocks and shares ISA (£20,000 limit)
- Lifetime ISA (£4,000 limit)
- Innovative Finance ISA (£20,000 limit)
- Junior ISA (£9,000 limit)
Each tax year, you get a £20,000 allowance that can be used for saving and investing with your ISA account. If you like, you can use this whole amount for your stocks and shares ISA, or split it across multiple types of ISAs. But keep in mind that the allowances can change yearly.
The main benefit of using an ISA is that for most investments held within the tax wrapper, you don’t have to pay dividend or capital gains (CGT) tax on any income or growth. This allows your portfolio to grow and compound over the years without being held back by a tax burden.
If you use a cash ISA, you don’t have to pay any tax on interest earned. Again, this has the same benefit of allowing your savings to grow without a tax burden slowing things down. It also removes the need for you to have to report any interest received on a tax return.
Another significant benefit is that when you want to withdraw funds from your ISA, unlike with a pension, any money you take out doesn’t count towards your income for that year – meaning you pay no additional tax on your funds down the line.
NatWest ISA at a glance
|🗺️ Supported Countries||UK|
|💰 Platform Fee||0.15%|
|💰 Inactivity fee||£0|
|🎮 Demo Account||No|
|📈 Portfolio Rebalancing||Yes|
|💵 Minimum deposit||£50 (or £10 per month with JISA)|
|💵 Minimum deposit for Cash ISA||£1 for flexible access or £1,000 for fixed-rate|
|📍Investment Instruments||Ready-made portfolios|
Types of NatWest ISAs available
There are three types of ISA accounts available with NatWest:
- Stocks and shares ISA account: this is for adults over 18 based in the UK and you can invest up to £20,000 into this type of ISA during the tax year. This uses a selection of five ready-made portfolios, so you’ll select a particular type of portfolio strategy to use, and the minimum investment is £50.
- Stocks and shares Junior ISA (JISA) account: allows you to invest on behalf of someone under 18. You can invest up to £9,000 each tax year, which doesn’t count towards your annual allowance. The child can only access the account once they turn 18. The minimum investment is a £50 lump sum or £10 per month and it comes with the same choices and fees as the adult S&S ISA account.
- Cash ISA account: with the cash ISA you can choose between a flexible access or fixed rate account. The flexible cash ISA lets you take money out whenever you want, and the deposit minimum is only £1, but the interest rate is lower. The fixed rate option means locking away your money for 1 or 2 years, and the minimum deposit is £1,000, but you get a higher rate of interest.
Signing up for an account
The sign-up process is relatively straightforward, but not as simple as with some other platforms. If you head to the NatWest homepage on your phone or desktop and navigate to the specific ISA page you’re looking to open and follow the instructions. During the registration process, it’s best to have:
- Your national insurance (NI) number.
- Current address.
- A debit card or bank details.
One major difference to some other ISA providers is that NatWest requires you to have some kind of account with the bank. So, you’ll need to have internet banking set up with them before opening an ISA online. You can also head to a NatWest branch and do things in person if that’s easier for you. But this can make opening an ISA more hassle than with some other providers.
NatWest investment ISA portfolio options
The investing strategy of NatWest involves using a mixture of equities, bonds, and cash. There are five ready-made portfolios available which are managed by Coutts investment managers, and the choices look like this:
- Defensive – 78% bonds, 20% shares, 2% cash.
- Cautious – 58% bonds, 40% shares, 2% cash.
- Balanced – 43% bonds, 55% shares, 2% cash.
- Ambitious – 23% bonds, 75% shares, 2% cash.
- Adventurous – 98% shares, 2% cash.
Keep in mind that these allocations can change, this is just to give you an idea of how the portfolios are arranged at the moment.
NatWest ISA fees
The costs and fees for the NatWest ISA are very competitive and straightforward to grasp because they apply to all the ISA account types. Here’s a table with everything laid out so that you can review the costs and fees yourself:
|NatWest ISA Fee||Cost|
|Investment annual platform fee (charged monthly)||0.15% (max)|
|Cash ISA fee||£0|
|Fund ongoing charge (annual)||0.40% (max)|
|Transaction costs (annual)||0.07% (max)|
|FX (foreign exchange) fee||None|
How the fees for NatWest work
Although the rates are all annual, the fees are charged on a monthly basis and automatically deducted from your NatWest investment account.
Here’s a brief explanation of the main fees:
- Platform fee – this goes to NatWest to cover the costs of running the platform and is based on the size of your portfolio.
- Fund ongoing charge – this charge is for management of your selected ready-made investment portfolio and again, is based on your portfolio size.
- Transaction cost – this is the cost of buying and selling investments within your chosen portfolio and are estimated based on past costs. This is also a yearly figure based on the size of your portfolio and the cost will automatically be deducted from your investments.
Pros and cons of the NatWest ISA
Here’s a quick summary of the main advantages and disadvantages of the NatWest ISA accounts:
- Ready-made investment portfolios managed by experts for a competitive fee.
- Overall costs are simple to understand and low compared to some other ISA providers
- £50 minimum deposit for investment ISAs.
- One-off automated investment advice for £10.
- Option to choose an easy-access or fixed-rate cash ISA.
- Security of keeping cash and investments with one of the UK’s best-known banks.
- Free withdrawals for all ISA accounts.
- You can manage your bank accounts and investments all in one place.
- A simple option for passive investors who want expert management.
- You’re only able to invest in fixed portfolio options and can’t customise them.
- No ability to buy individual stocks and shares.
- You need to have an existing account with NatWest.
- Low interest rate for the easy-access cash ISA.
How it compares with other robo-advisor and managed ISA providers
Throughout this NatWest ISA review, we’ve run you through most of the key benefits and downsides, but let’s take a look at how the NatWest platform and its fees stack up against alternative ISA providers:
|Fees||NatWest||Nutmeg||Moneybox||Vanguard (Managed)||Hargreaves Lansdown (Ready-Made)||InvestEngine (Managed)||Wealthify||AJ Bell (Ready-Made)|
|Minimum investment||£50||£500 (£100 for LISA & JISA)||£1||£500 or £100/month||£100 or £25/month||£100||£1||£1,000|
|Platform fees||0.15%||0.75% up to £100k then 0.35% after (for the fixed allocation portfolio it’s 0.45% up to £100k and 0.25% beyond)||£1/month (plus 0.45%/month)||0.45%/year||0.45%/year||0.25%||0.6%||0.25%/year (max £3.50/month)|
|Share dealing fees||0.07% maximum (plus maximum ongoing charge of 0.4%)||0.21% – 0.3% average fund charge (plus 0.07% average market spread)||£0 (ongoing fund charges of 0.12% – 0.58% depending on choice and 0% for US stocks)||£0||£0 for funds (ongoing fund charges of 0.92% – 0.99%_||£0||0.16% for original plans (0.7% for ethical)||£1.50 to buy or sell funds (plus ongoing fund charges of 0.6% – 0.8%)|
|Foreign exchange fees (FX)||None||None||0.45%||None||1% (reducing to 0.75%/0.5%/0.25% for large trades)||None||None||0.75% (reducing to 0.5% and 0.25% for large trades)|
How to transfer an ISA to NatWest
It is possible to transfer your existing ISA over to NatWest, you’re able to transfer from any type of ISA that NatWest also supports.
You’ll first need to create a NatWest ISA account. Once you’ve done that, you’ll have the option to provide NatWest with your current ISA details and formally request a transfer.
NatWest will then begin the ISA transfer process at your instruction. It should take between 15 and 30 days for the transfer to complete.
Unfortunately, an ‘in-specie’ transfer of your existing investments isn’t possible, so everything will be liquidated to cash during the transfer and then moved over to your new NatWest ISA.
Always make sure that you use the official NatWest ISA transfer service. Don’t withdraw everything from your current provider and move it yourself because you could lose the tax
Is the NatWest ISA safe?
Yes! NatWest is one of the most well-established banks in the UK and it has an excellent cybersecurity track record.
On top of this, NatWest is regulated by the FCA (Financial Conduct Authority), and is covered by the Financial Services Compensation Scheme (FSCS), which protects up to £85,000 of your deposits.
How to pick the right ISA
Finding the right ISA for you depends on what you’re looking for and how regularly you save and invest. Here are some things to look out for and questions to ask yourself when you’re trying to find the best ISA:
- Does the platform offer commission-free trading in the UK, and how cheap are the platform and share dealing fees?
- Can you access multiple accounts, such as a LISA or JISA?
- Is there a discount for frequent investors or savers?
- What is the investment choice like?
- How easy is it to use the platform, is there a mobile app?
- Is there a healthy selection of ready-made or managed portfolios?
- Is there a cheap FX fee if you plan on buying international shares?
- How reputable is the provider?
- Does the platform offer good customer service?
- Are there any incentives like free stocks or cashback for joining?
The truth is, there’s no single ‘best’ ISA provider. It’s all about finding the one that fits your needs. Many platforms structure costs and fees differently, especially if you opt for a managed portfolio. So some will work out cheaper for you depending on what you invest in and how frequently.
As mentioned, you can open and pay into one type of each ISA account each tax year. So, if you try one out for a while and don’t like it or find it expensive for your needs, you can always transfer to another platform down the line.
The bottom line – is the NatWest ISA any good?
The NatWest ISAs offer their banking customers a simple and transparent way to save and invest with expert portfolio management.
To sum it up, NatWest’s ISA offering stands out because of:
- Reputable UK bank with physical branches.
- Easy-to-understand and competitive fee structure.
- The option to have a stocks and shares ISA, JISA, or a cash ISA.
- Relatively low minimum deposits.
- An automated investment advice service for just £10.
The NatWest investment ISAs only offer managed portfolios, so it’s best-suited to those who want a ‘hands-off’ passive investing approach. It’s very easy to understand the fees for all the accounts and you can use the NatWest app or online banking service for managing things.
NatWest also offers the ability to carry out an ISA transfer for you. So if you’re looking to change providers, this will make moving much more effortless. However, it’s important to keep in mind that you need to be a NatWest customer to hold an ISA.
Hopefully, this review of the NatWest ISA accounts has given you some insight into what it can offer you as a saver or investor. Let us know how you get on in the comments and what you think of this account.
What is the interest rate on a NatWest cash ISA?
For the flexible cash ISA, the interest rate is currently 0.65% on balances between £1 – £24,999 and 2.02% on balances over £25,000. With the fixed rate cash ISAs, the current interest rate is 3.25% for the 1 year option and 3.75% for the 2 year option. Keep in mind that these interest rates can fluctuate (unless you lock in a fixed option).
Can I open an ISA with NatWest?
Yes! As long as you’re an adult based in the UK and you meet all the other ISA criteria. Just remember you can only open and pay into one type of each ISA account every tax year.
Do NatWest offer a stocks and shares ISA?
Yes, they offer an investment ISA that lets you select from five different ready-made portfolios.