Latest news with #GeneralInvestmentAccount
Daily Mail
20-05-2025
- Business
- Daily Mail
IG offers a huge 8.5% rate on cash savings - is it worth taking?
IG has blasted its way into the investing platforms skirmishing to offer savers the most attractive headline interest rates, introducing a boosted 8.5 per cent rate on uninvested cash. IG's new rate* gives savers the opportunity to earn double the base rate on up to £100,000 until the end of August, after which the rate drops to match the Bank of England's benchmark. While the boost only lasts three months, the bumper rate may mean some consider it is worth taking. But cash savers should note that IG is an investment platform and to access the boosted rate, you must both place a trade before 31 May and hold an investment at the end of each of the three months. IG's custody fee could also catch out those who don't intend to actively invest. If you trade at least three times in a quarter then there is no account fee, otherwise IG charges £8 per month. Earlier this month, the Bank of England voted to cut its benchmark interest rate by 0.25 percentage points to 4.25 per cent. While interest on savings isn't necessarily tied to this base rate, providers take changes into account when deciding on rates to offer savers. Some have already cut rates in reaction to the drop. All this follows a heated battle at the beginning of April among a troupe of providers that kept inching up their three-month boosts as the end of the tax year approached. Two providers from that clash are still duking it out: CMC Invest* and Moneybox. Three-month fixed boosts from these providers mean savers opening one of these accounts today should comfortably beat the base rate until August. High earning potential for savers prepared to invest While providers have generally been boosting rates on Isas, IG's 8.5 per cent rate * applies to uninvested cash held in any of its accounts – whether it's an Isa, Sipp or General Investment Account. The catch is that as an investment platform, IG is offering the rate to encourage cash savers to start trading. This means it's more suited to those who have some experience with investing already. New customers (and existing customers who haven't yet placed a trade) must open an account and make an investment before 31 May to be eligible for the offer. You'll receive a boosted rate each month that you hold the investment, until 31 August. You'll also be eligible for the rate for each month you buy or sell an investment or hold one of IG's Smart Portfolios, which are its ready-made investment option. IG says if you opened an account on 9 May, had £20,000 in cash and met all the conditions each month, you'd earn £520 in interest. If you want to invest, IG is just one of many available investment platforms, and because it charges a fee for holding assets if you don't trade, it's potentially a more costly choice than others. This fee could catch out savers going for the boost who don't intend to trade actively. If you make less than three trades each quarter you'll be charged £24, but there's no fee if you make more than three trades. It's important you check the terms and conditions of the deal and read more about the fees that IG charges. Finally you should make sure you open an investment account and not a trading account, which includes spread betting and CFD trading. IG says that 71 per cent of investors lose money when trading in this way on the platform. > Find out more about IG's deal* What alternatives are there for cash savers? Savers can beat the base rate with both CMC Invest* and Moneybox, who are offering more straightforward boosts on cash Isas. Although the earning potential isn't as high, there's no obligation for cash savers to invest. In our view CMC Invest's 5.7 per cent account, including a 0.85 per cent three-month boost, beats Moneybox's because it offers more flexibility around accessing your money. Keep in mind Moneybox has announced that its headline boosted cash Isa rate is going down to 5.46 per cent on 29 May, including a 1.51 per cent three-month bonus. CMC Invest hasn't announced a cut, yet. When looking at cash Isas with short bonuses it is important to consider what the average rate over a whole year will be. CMC Invest's account averages 5.06 per cent over a year (but is yet to be cut) while Moneybox's will average 4.33 per cent after its looming cut. In contrast, Trading 212* has already lowered its rate in response to the Bank of England cut and is paying 4.86 per cent, including a 12 month 0.76 per cent bonus. For more alternatives you can also read our regularly updated round-up of our favourite cash Isas.
Daily Record
12-05-2025
- Business
- Daily Record
Investing platform offers temporary 8.5% annual interest rate on cash balances this month
Investing and trading platform IG is offering a temporary cash interest rate of 8.5 per cent AER (annual equivalent rate) - twice the current Bank of England base rate. 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 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.'
