IG Group Launches Special Offer With Up To 8.5% Interest

The financial company IG Group (LON: IGG), based in London, has launched an exciting offer for its new customers. The company said it is offering a high interest rate of up to 8.5% AER variable on cash deposits.

This is more than double the current 4.25% base rate set by the Bank of England. The offer comes after the Bank of England lowered its base rate by a quarter point to 4.25% recently.

In the past, the base rate had been 5.25. But now, the Bank of England has reduced it, and the future rate changes are uncertain.

When the central bank increases the base rate, financial companies raise interest rates for customers’ savings, but it also makes borrowing money more expensive. IG Group said that when the base rate lowers, banks reduce the rates they offer to savers.

IG Group’s Offer Available Only To New Customers Opening Specific Accounts

IG Group’s new offer gives a much higher return than the current base rate. However, the firm said it is only available for new customers who open specific accounts: an ISA (Individual Savings Account), SIPP (Self-Invested Personal Pension), or GIA (General Investment Account).

The offer is also time-limited. New customers must sign up by 31 May. Once they do, they will enjoy the high interest rate of 8.5% until 31 August this year. IG Group said that after this time, the interest rate will drop to its regular rate, which is based on the Bank of England’s base rate of 4.25%.

Michael Healy, the UK Managing Director of IG, explained the company’s decision. He said while others cut, the firm is doubling down. He believes that this offer stands out during a time when other rates are falling, and investors are being cautious about their money.

Interest on cash deposits has not always been common with brokers. In the past, many brokers did not offer interest on the cash customers kept in their accounts. As central banks raised interest rates, brokers began to earn more from the cash their customers left in their accounts. Some of these brokers began sharing part of this extra money with their customers.

Robinhood Plans To Offer Premium Checking And Savings Accounts Later This Year

Brokers like XTB and BidX Markets have been offering similar interest features for the past two years. According to the update, other companies, such as Interactive Brokers, Webull, Trading 212, IG-owned Freetrade, and eToro US, also offer interest on uninvested cash. Recently, NAGA began offering 2.77% APY for customers with uninvested euro cash balances.

IG Group’s 8.5% interest rate offer shows how competitive the industry has become. Many customers are now looking for places to park their money and earn a good return while waiting for clearer signs in the markets. Healy said this offer gives investors a great opportunity to earn money with a high return.

Meanwhile, Robinhood, a company known for changing the financial industry, plans to introduce checking and savings accounts later this year. The company said these accounts will come with premium benefits, including a 4% APY, which is a good return but still lower than what IG Group is offering.