Investing platform offers temporary 8.5% annual interest rate on cash balances this month
The boosted rate will be available to people who open a stocks and shares ISA, SIPP (self-invested personal pension) or a General Investment Account (GIA) and make an initial investment before May 31.
Once they have made an initial investment, any additional money that qualifying customers have deposited and are holding in cash on the account would earn 8.5 per cent interest until August 31, provided they keep any investment position open for this period. After this date, interest reverts to IG's standard 4.25 per cent rate.
IG does not offer a dedicated cash savings account, so the rate would apply to uninvested cash in its ISAs, SIPPs or GIAs. IG pays interest on cash balances up to £100,000.
Michael Healy, UK managing director of IG, said: 'Many investors are sitting on the sidelines right now as they wait for market clarity - this offer gives them a place to park their money and still earn a serious return.'
Existing account holders could also be eligible for the offer, providing they have not yet placed their first trade and do so by May 31.
The announcement was made the day after the Bank of England base rate was reduced from 4.5 per cent to 4.25 per cent, prompting suggestions that savings providers may cut their return rates.
Global economic and political uncertainties, including over US tariffs, have prompted market volatility in recent weeks.
Rachel Springall, a finance expert at Moneyfactscompare.co.uk, said: 'The high interest rate looks enticing, and it is positive to see appetite to draw in savers who are looking to make their money work harder for them. However, it is essential savers carefully check the terms and conditions of the account before they invest.
'Savers need to understand that the interest rate is applied to money sitting in a specific type of account, which should entice investors who are waiting for the market storm to calm. Offering a high interest rate is a great way to entice the more risk-averse saver, and it gives them an opportunity to consider the longer-term benefits of investing in the stock market once they feel comfortable to do so.
'In the meantime, they can earn an attractive rate on their hard-earned cash, but they need to make sure they review it once the offer expires. Investing puts any capital at risk, so this option will not be suitable for every saver.'
In another boost to savings rates, West Brom Building Society announced a rate increase on its Four Access Saver account on Friday. The interest rate has been increased from 4.40 per cent to 4.65 per cent AER (variable).
The improved rate will apply to all new and existing customers holding issues one and two of the product, the Society said. Applications can be made online. Account holders can make up to four withdrawals per year.
Sophie Dwyer, product manager at West Brom Building Society, said: 'As a mutual, our customers are at the heart of everything we do.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Finextra
13 hours ago
- Finextra
The top payments stories you missed in July 2025
0 This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community. Catch up on Finextra's most-read Payments stories from last month. Australian banks launch nationwide Confirmation of Payee scheme Confirmation of Payee (CoP) has officially arrived in Australia, with Australian banks having started the roll-out of the nationwide scheme early in July. Even though Australia is one of the only countries where scam losses were reducing, banks have invested $100 million in the name-matching technology to further drive down losses. Bank of England mulls shelving of digital pound The BofE is allegedly willing to step back from the digital pound if private businesses continue to roll out new electronic-payment technologies. According to sources from Bloomberg, staff believe the gains from moving ahead with the launch have diminished, and have instead been privately urging the industry to accelerate payment innovations that could result in similar benefits. The Finextra news desk writes: 'The Bank's current thinking is in stark contrast to that taken by the European Central Bank, which is accelerating work on a digital euro to keep up with the 'ambitious pace' set by EU leaders. The project's urgency increases in the face of geopolitical challenges, including an increasingly hostile United States under Donald Trump.' PayPal unveils integration with domestic wallets across the world PayPal has announced multiple global partnerships to integrate many of the world's largest digital wallets and payment systems in a single platform. Named Paypal World, the new initiative aims to connect almost two billion users globally and is designed to transform the way people send money in-store online, as well as with AI agents across borders. Launch partners, apart from PayPal, include Venmo, Mercado Pago, NPCI International Payments Limited (UPI), and Tenpay Global. PayPal unveils 'Pay with Crypto' feature It has been a busy month at PayPal. The company also announced a new service, called Pay with Crypto, to enable US businesses to accept payments in over 100 cryptocurrencies. The service, which is expected to become available within weeks, will let customers pay with cryptocurrencies such as bitcoin and Ethereum, as well as stablecoins including USDC. They will also be able to use wallets such as Coinbase and MetaMask. The service is designed to simplify cross-border commerce for merchants by allowing payments in crypto to automatically convert to fiat or stablecoin, and also help cut transaction fees by up to 90% when compared to credit cards. $17 million taken in TikTok ATM scam Earlier in July, a fault in a youth job programme card scheme allowed $17 million to be withdrawn and lost across New York City. The programme had issued around 30,000 cards to 14-to 24-year-olds who could not be paid via direct deposit, and were only designed to give users access to that week's earnings. However, a fault allowed users to withdraw as much as $40,000 per ATM. As the fault went viral on social media, some users even sold their cards for $1,000. Mastercard unveils A2A Protect in the UK As account-to-account (A2A) payment fraud has soared to £592 million in the UK last year, Mastercard has rolled out a new service to help banks protect consumers from A2A payment fraud and resolve disputes. A2A Protect will initially focus on the most pressing concerns, such as Authorised Push Payment (APP) fraud. The service also includes a uniform procedure for banks to resolve disputes and recover funds, across multiple use cases. Future phases will, among other features, include processes for recovering funds across a broader range of scenarios. Bailey and Reeves clash over Revolut banking licence - FT In July 2024, Revolut finally won its hard-fought-for UK banking license. The approval triggered a 'mobilisation' stage while building out its controls and infrastructure, which was expected to end after 12 months. However, in July 2025, the approval anniversary came and went without an update. The Financial Times reports that efforts to accelerate Revolut's authorisation as a fully-licenced bank failed over a clash between The Bank of England governor Andrew John Bailey and chancellor Rachel Reeves. The Treasury commented in the FT: 'The chancellor and the governor have a strong and productive relationship and the government fully supports the operational independence of the Bank of England.' The BoE and Revolut declined to comment.
Times
13 hours ago
- Times
Bank expected to cut interest rates for fifth time this year
The Bank of England is poised to cut interest rates for the fifth time in a year next week in what is likely to be a tightly contested decision among its officials. Members of the nine-strong monetary policy committee (MPC), the group that sets the base rate in the UK every six weeks, are expected to vote 5-4 in favour of lowering borrowing costs to 4 per cent from 4.25 per cent on Thursday. Rates peaked at 5.25 per cent in August 2023 and have gradually fallen since August last year. A slim majority of five panellists, including Andrew Bailey, the governor of the Bank, are set to back the quarter-point rate reduction. Two members, probably Huw Pill, the Bank's chief economist, and Catherine Mann, an external MPC member, are anticipated to favour leaving rates unchanged. Two other external members, Swati Dhingra and Alan Taylor, may call for a larger 50-basis point downward move. The MPC is deeply divided over how much emphasis it respectively assigns to inflation, the labour market and economic growth. Members who have favoured a more cautious approach to loosening policy have pointed to higher inflation expectations among consumers and a resurgence in food prices. Those who have backed rate cuts are more concerned about weakness in the labour market and soft pay growth. • House prices rise after stamp duty holiday slowdown Analysts at Bank of America, the Wall Street investment bank, said: 'The tone of the meeting is likely to strike a delicate balance between the trade-off the BoE is facing of still elevated inflation/inflation expectations and softening growth/pay and labour market.' In April and May the economy contracted by 0.3 per cent and 0.1 per cent respectively. In the spring the unemployment rate climbed to 4.7 per cent, a four-year high, while payrolled employment has contracted for five months in a row after the £25 billion increase in employers' national insurance contributions. • Andrew Bailey blocks Rachel Reeves's meeting with Revolut However, inflation leapt to an 18-month high of 3.6 per cent in June and Bank of England officials think that the rate will remain above 3 per cent for the remainder of the year. The Bank is required to keep inflation at 2 per cent. Nomura, a Japanese investment bank, said: 'Policy easing can be justified even without particularly weak data because rates are restrictive. When this justification (of getting policy back to neutral) for lowering rates no longer holds, further cuts should become even more data-dependent.' Markets think that the MPC will probably lower rates in November and eventually take them down to 3.5 per cent, but Ruth Gregory, deputy chief UK economist at Capital Economics, a consultancy, said that they will settle at 3 per cent. 'It's only a matter of time before the weakness in employment leads to wage growth and inflation falling back to target consistent rates,' she said. On Thursday the MPC will also publish new economic forecasts for the next three years and update investors on whether it believes the gilt market is being affected by sales of government bonds.
Powys County Times
a day ago
- Powys County Times
UK house prices increase by 0.6% month-on-month in July, says Nationwide
House prices increased by 0.6% month-on-month on average in July – following a 0.9% monthly fall in June, according to an index. The annual rate of house price growth accelerated to 2.4% typically in July, from 2.1% in June, Nationwide Building Society said. This took the average UK house price to £272,664. Robert Gardner, Nationwide's chief economist, said: 'Looking through the volatility generated by the end of the stamp duty holiday, activity appears to be holding up well. Indeed, 64,200 mortgages for house purchase were approved in June, broadly in line with the pre-pandemic average, despite the changed interest rate environment. 'After deteriorating markedly in the wake of the pandemic, housing affordability has been steadily improving, thanks to a period of strong income growth alongside more subdued house price growth and a modest fallback in mortgage rates. 'While the price of a typical UK home is around 5.75 times average income, this ratio is well below the all-time high of 6.9 recorded in 2022 and is currently the lowest this ratio has been for over a decade. 'This is helping to ease deposit constraints for potential buyers, as has an improvement in the availability of higher loan to value mortgages. 'Similarly, the interest rate on a typical five-year fixed-rate mortgage is around 4.3% (for a borrower with a 25% deposit). This is still over three times the all-time lows prevailing in autumn 2021, but well below the highs of (around) 5.7% reached in late 2023.' Mr Gardner said that despite wider economic uncertainties in the global economy, underlying conditions for potential home buyers in the UK remain supportive. He said: 'Unemployment remains low, earnings are still rising at a healthy pace, household balance sheets are strong and borrowing costs are likely to moderate a little further if (the Bank of England base rate) is lowered further in the coming quarters as we, and most other analysts, expect. 'Providing the broader economic recovery is maintained, housing market activity is likely to continue to strengthen gradually in the quarters ahead.' Matt Thompson, head of sales at London-based estate agent Chestertons, said: 'Last month alone, some of our branches have seen an evident uplift in the number of vendors wanting to sell which has motivated more buyers to resume their search and make an offer.' Nathan Emerson, CEO at property professionals' body Propertymark, said: 'Many people are delaying paying off their mortgages until later in life via 35-year or 40-year mortgages. Therefore, a reduction in interest rates would be very welcome to help offset ongoing financial pressures and worries over the cost of living for many.' Mark Harris, chief executive of mortgage broker SPF Private Clients, said: 'Lower mortgage rates, with the expectation of more reductions to come, are giving the market impetus and putting borrowers in a stronger position when it comes to negotiating their property purchase. This, in turn, is keeping prices in check. 'With the markets expecting a further rate reduction next week, we could be in for a busy autumn. Lenders continue to trim their mortgage rates, while easing of mortgage lending rules should also enable borrowers to take on bigger mortgages in coming months.' Earlier this week, HM Revenue and Customs (HMRC) reported that house sales jumped by 13% month-on-month in June. Across the UK, it estimated that 93,530 home sales took place during the month, which was 1% higher than in June 2024. Bank of England figures have shown that mortgage approvals for house purchase have ticked upwards, with around 64,200 approvals made to home buyers in June – the highest figure since March this year. Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: 'While some buyers are clearly pressing ahead with their purchase plans, as reflected in robust mortgage approval data for June, others may now be mulling their options more carefully as higher costs pose a fresh challenge. 'Lenders are offering solutions, however, not only with more relaxed affordability rules, but also by ramping up the number of low-deposit or 100% mortgages on offer to help more first-time buyers onto the property ladder. Longer-term mortgages, where the repayment period is stretched beyond the traditional 25-year term to 30, 35 or even 40 years are also becoming increasingly popular.' Karen Noye, a mortgage expert at wealth manager Quilter, said: 'All eyes will be on the Bank of England next week and what it decides to do with interest rates. It was thought that a rate cut was fairly certain on Thursday, but recent inflation data coming in higher than expected may just temper things slightly and force buyers to wait. 'Should the Bank of England follow through with a rate cut, however, that will help support the buyers.' Tom Bill, head of UK residential research at Knight Frank, said: 'Sticky inflation means a probable cut by the Bank of England next week may only be followed by one more this year. Despite a modest uptick in July, high levels of supply are keeping a lid on prices and means it is still very much a buyers' market.' Iain McKenzie, CEO of the Guild of Property Professionals, said: 'For sellers, realistic pricing is crucial to capture buyers' attention in a more competitive landscape. For buyers, the combination of more choice and the likelihood of further mortgage rate improvements creates a compelling window of opportunity.' Jonathan Handford, managing director at estate agent group Fine & Country, said: 'Properties purchased during the Covid-era 'race for space' – particularly in coastal and rural areas – are increasingly returning to the market as commuting patterns normalise and lifestyle priorities shift. This added supply is helping to moderate price pressures in some regions.' Sarah Coles, head of personal finance, Hargreaves Lansdown, said: 'A combination of pay rises ahead of inflation, falling mortgage rates and keenly-priced properties could start to reignite buyer enthusiasm in the coming months.' Jonathan Hopper, CEO of Garrington Property Finders, said: 'Most buyers are still being prudent and pragmatic.'
