Interactive Brokers follows Fed rate hike and raises interest to USD 4.58%
“IBKR’s Cash Management solution makes it easy for clients to earn and borrow at competitive rates while making everyday transactions like depositing funds, making purchases, and paying bills from their brokerage account. Our clients benefit from the simplicity of maintaining a single account to accomplish a wide variety of financial objectives including managing finances and investing for the future.”
Interactive Brokers has announced that clients are expected to earn up to USD 4.58% on instantly available cash balances over USD 10,000. The move follows the Federal Reserve’s new rate hike to the highest level in 16 years.
The Federal Reserve increased its key interest rate by 0.25 percentage points, pushing its benchmark rate to between 5% and 5.25%, up from near zero in March 2022.
The market interest paid by Interactive Brokers is calculated using the Fed Funds rate as the reference rate for USD minus 0.5%. When interest rates rise, clients of Interactive Brokers earn more. Interactive Brokers’ Cash Management is a simple way for investors to earn at superior rates and oversee their finances without multiple accounts and services.
IBKR pays interest directly to client brokerage accounts eliminating the need for sweeps accounts, funds, or programs and enabling cash to be instantly available. The broker’s Cash Management service allows clients to use instantly available cash balances to trade and transact from one account.
Clients can earn and borrow at competitive rates with IBKR
Thomas Peterffy, Founder and Chairman of Interactive Brokers, said: “IBKR’s Cash Management solution makes it easy for clients to earn and borrow at competitive rates while making everyday transactions like depositing funds, making purchases, and paying bills from their brokerage account. Our clients benefit from the simplicity of maintaining a single account to accomplish a wide variety of financial objectives including managing finances and investing for the future.”
IBKR’s Cash Management solution includes the following features for US clients:
- Earn Interest & Borrow: Clients are expected to earn interest up to USD 4.58% on instantly available cash balances or to borrow at USD 5.58 – 6.58% from a single brokerage account
- Pay Bills: Use Bill Pay to pay any company or individual in the United States via electronic check
- Purchase Everywhere: Use the IBKR Debit Mastercard® to make purchases or ATM withdrawals at millions of locations worldwide without late fees or foreign transaction charges
- Touchless Payment: Link the Debit Card with Apple Pay and Samsung Pay for contact-free purchases or with PayPal and Venmo
- Convenient Deposits: Use the mobile app to deposit checks anywhere or sign up for automatic payroll deposit
- Strength & Security: IBKR’s financial position and conservative business management protect IBKR and clients
