Interactive Brokers Expected to Raise Interest Rates to USD 4.33% on Instantly Available Cash

Rhea-AI Summary

Interactive Brokers (NASDAQ: IBKR) announced clients can earn up to 4.33% interest on cash balances over USD 10,000. Interest is paid directly into client brokerage accounts, making funds instantly available. In comparison, other brokerages offer rates between 0.01% and 2.32%. The company uses the Fed Funds rate as a reference, allowing for potential earnings to increase as interest rates rise. Clients will have daily accruing interest with monthly payments, simplifying cash management. Thomas Peterffy, founder, emphasized the benefits of competitive rates and a sophisticated trading platform.

Positive

• Clients can earn up to 4.33% interest on cash balances over USD 10,000.
• Interest paid directly into client brokerage accounts enhances liquidity.
• Interest accrual is daily, with monthly payments simplifying cash management.
• Competitive rates exceed those offered by other brokerages, which are only 0.01% to 2.32%.

Negative

• None.

Interest is Paid Directly to Client Brokerage Accounts

GREENWICH, Conn.--(BUSINESS WIRE)-- Interactive Brokers (Nasdaq: IBKR), an automated global electronic broker, today announced that clients are expected to earn up to USD 4.33% on instantly available cash balances over USD 10,000. Unlike brokerages that offer significantly lower rates, Interactive Brokers conveniently pays interest directly to client brokerage accounts. This eliminates the need for separate sweeps accounts, funds or programs and enables cash to be instantly available.

While interest rates available at other brokerages are only USD 0.01% – 2.32%, the market interest paid by Interactive Brokers, is calculated using the Fed Funds rate as the reference rate for USD minus 0.5%. As a result, if interest rates continue to rise as expected, clients of Interactive Brokers will have the opportunity to earn more.

“In the current rising rate environment, many investors are considering how to earn more in their brokerage and savings accounts,” said Thomas Peterffy, Founder and Chairman of Interactive Brokers. “Investors who allocate a portion of their portfolio to cash may benefit from Interactive Brokers’ competitive interest rates, powerful trading platforms, and a broad range of low-cost and global products.”

For clients of Interactive Brokers, interest accrues daily, and payments are posted on a monthly basis. Interactive Brokers’ cash management is integrated into client broker accounts, making it simple to earn interest and borrow at the lowest rates without transferring cash.

For additional information on IBKR’s Interest Rate pricing, please visit:

US and Countries Served by IB LLC: https://www.interactivebrokers.com/en/accounts/fees/pricing-interest-rates.php
Canada: https://www.interactivebrokers.ca/en/accounts/fees/pricing-interest-rates.php
United Kingdom: https://www.interactivebrokers.co.uk/en/accounts/fees/pricing-interest-rates.php
Western Europe: https://www.interactivebrokers.ie/en/accounts/fees/pricing-interest-rates.php

About Interactive Brokers Group, Inc.:
Interactive Brokers Group affiliates provide automated trade execution and custody of securities, commodities, and foreign exchange around the clock on over 150 markets in numerous countries and currencies, from a single unified platform to clients worldwide. We service individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation has enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. For the fifth consecutive year, Barron’s ranked Interactive Brokers #1 with 5 out of 5 stars in its March 25, 2022, Best Online Brokers Review.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230323005639/en/

Contacts for Interactive Brokers Group, Inc.

Media: Katherine Ewert, media@ibkr.com

Source: Interactive Brokers Group, Inc.

FAQ

What is the interest rate offered by Interactive Brokers for cash balances over $10,000?

Interactive Brokers offers up to 4.33% interest on cash balances over $10,000.

How does Interactive Brokers pay interest to its clients?

Interest is paid directly to client brokerage accounts, making cash instantly available.

What reference rate does Interactive Brokers use to calculate interest?

The interest is calculated using the Fed Funds rate minus 0.5%.

When do clients receive interest payments from Interactive Brokers?

Interest accrues daily and payments are posted on a monthly basis.

How does Interactive Brokers' interest rate compare to other brokerages?

Other brokerages typically offer interest rates from 0.01% to 2.32%, which are significantly lower than Interactive Brokers' rates.