Updated: May 10, 2019

SIPP Deposit Accounts

Want to know which deposit account to hold in your SIPP? Take a look through our guide to find out which is best for you.

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Tony Stevens

Author: Tony Stevens - Finance Expert

Updated: May 10, 2019

SIPPS were created to be more flexible than other pension products and give holders real control over their pension. Most SIPPs have a default account to put cash into, but not necessarily all of them.

One of the main reasons for using the facility is when you are reaching retirement, you may wish to reduce your risk by cashing in investments and holding the proceeds in cash.  It is also relevant to people who have a low attitude to risk. Low Cost SIPPs tend to only allow you to use the SIPP providers facility and not to allow the ability to shop round for a deposit account with the most attractive rates.

We get a lot of enquiries about SIPP deposit accounts, including how and why SIPP holders should use them. We’ll go through some of the more important details, below.

In this article we’ll cover:

What is a SIPP deposit account?

A SIPP deposit account is a specific pensions savings account for holders of a SIPP, to deposit  the cash portion of their retirement savings. It’s possible to earn a higher rate of interest on the cash you hold in your SIPP than your provider currently pays.

As with all things SIPP related, the deposit accounts are only available to hold pensions funds, transferred from your SIPP account.

To find out more about whether or not a SIPP deposit account is right for your pensions needs, get in touch with us and we’ll connect you an experienced pensions expert.

Fixed term and flexible SIPP deposit accounts

It’s possible to open and transfer a portion of your SIPP cash funds into a fixed term or flexible deposit account.

Fixed term

With the fixed term option, like regular fixed term bond or savings accounts, the provider you select, holds a set amount of your savings in their account for a fixed period. At the end of that period, you will receive back your original investment, plus a return, which is often also fixed, based on the rate of interest the account delivered.


The flexible SIPP deposit account allows you to add in more funds from your SIPP account, up to the maximum proportion permitted by your SIPP provider. You receive the interest rate advertised on the account, which can fluctuate.

You are then able to withdraw some or all of your pensions savings and return it to your main SIPP account. Or, if the rules allow, transfer it to a different SIPP deposit account.

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Why should I use a SIPP deposit account?

The main reason to use a separate SIPP deposit account is that they tend to offer a higher rate of interest on the cash portion of your SIPP funds, than your SIPP provider. It also provides another way to diversify your SIPP investment portfolio.

Due to the flexible nature of a SIPP, that gives the holder more control over the eventual pension pot it delivers, it’s important to regularly assess the different investments held in your SIPP.

To make sure you’re making the best decisions about your SIPP, including the rate of interest on your cash portion, it could make sense to speak with one of the  SIPP experts we work with. They will advise you how to make the most of the potential benefits of your flexible pension, including by using a SIPP deposit account with the best rates of interest.

How do I open a SIPP deposit account?

For certain accounts, a financial adviser will need to open your SIPP deposit account. That includes the initial investment arrangements and any further planned deposits from your SIPP.

However, other accounts allow you to open a deposit account and manage the initial investment and future payments, where relevant.

Check any fees related to both options, from your SIPP provider and the SIPP deposit account provider. Where you’re considering a short-term fixed-term account, the fees may eat into a lot of the expected return.

While the flexibility of SIPPs include genuinely useful tools that allow you to maximise the earning power of your pension, it’s always important to seek advice on any element you’re unsure of. Contact Online Money Advisor and we’ll put you in touch with a SIPP expert.

How can I get the best rates of interest on my SIPP deposit account?

It’s not immediately obvious how to get the best interest rate on your SIPP deposit account, but there are options.

With enough searching online you could come across a best buy table on SIPP deposit accounts, which includes interest rate details. However, the quickest and most reliable way to find the best interest rates for your SIPP cash deposit investment plans, is to speak to one of the advisors with experience in this area.

SIPP deposit account providers

There aren’t a huge number of SIPP deposit account providers.

Some of the most high profile names in this market include Metro Bank and Santander, but it’s important to understand the differences, benefits and potential downsides of all accounts available to you. This is where the experience and knowledge of the expert advisors we work can really help you with the right advice

However, some SIPPs (namely the low cost variety) don’t allow the use of external SIPP cash deposit accounts and some SIPP deposit accounts have certain rules that may not fit with your overall pension strategy.

These are details that an expert SIPP advisor can help you with, to ensure your SIPP is performing well to provide you with a comfortable income throughout your retirement.

SIPP deposit accounts and FSCS compensation rules

One detail you should be aware of with regards to opening a SIPP cash deposit account, is that some of them are operated and offered via the offshore arm of the main provider. This means they may not be governed by the UK Financial Services Compensation Scheme (FSCS). Although, it’s likely other security features are available.

This detail may not be immediately obvious when you conduct your own research. However, it’s something an experienced pensions expert would know, or be able to easily find out.

Speak to a SIPP deposit account expert today

If you have questions about SIPP deposit account and would like to speak to an expert to find out more, call Online Money Advisor today on 0808 189 0463 or make an enquiry here.

Then, just sit back and relax while  we do all the hard work of finding the advisor with the right experience for your specific needs.

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We can help! We know everyone's circumstances are different, that's why we work with brokers who are experts in pensions. Ask us a question and we'll get the best expert to help.

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Tony Stevens

Tony Stevens

Finance Expert

About the author

Tony has worked in a vastly diverse array of areas in the pensions industry for over 20 years. Tony regularly writes for trade press, usually on topical and pensions pieces as well as acting as a judge at prestigious national events.

Tony is also a highly qualified Independent Financial Adviser in his own right. His mantra has always been “Hope for the best, but plan for the worst”, and believes that the biggest impact that an adviser can have on a client’s life journey is to take them on a journey from generally having little or no real idea of what their retirement will look like, to giving them the understanding of what their retirement looks like now, then helping them navigate a path to what they want their retirement to be.

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