Best UK Brokers For Earning High Cash Interest 2025
Cash sitting uninvested in your trading account can be a productive asset in your portfolio, particularly in fluctuating interest rate environments. To capitalise on this, many investors are considering interest incentive programs offered by a growing number of brokers in the UK. These programs automatically add interest to your unused cash balance, ensuring your British Pounds are productive until you decide to invest them.
UK Brokers Paying Interest On Cash Balances
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Established in Poland in 2002, XTB caters to over a million clients worldwide. This forex and CFD broker offers a robust regulatory framework, a diverse range of assets, and prioritises trader satisfaction. It provides an intuitive proprietary platform equipped with excellent tools to support aspiring traders.
Interest Rate: USD: 2%, GBP: 4.5%, EUR: 1.25%
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Founded in 1983, City Index is a prestigious broker, now under the Nasdaq-listed StoneX Group. It excels in forex, CFDs, and spread betting. With access to over 13,500 instruments, City Index provides a dynamic Web Trader platform, exceptional educational materials, and round-the-clock support five days a week, ensuring a thorough trading experience.
Interest Rate: GBP: 2.5%
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Interactive Brokers (IBKR), a leading brokerage, offers access to 150 markets across 33 countries and provides extensive investment services. With more than 40 years of experience, this Nasdaq-listed company complies with strict regulations from the SEC, FCA, CIRO, and SFC. It is among the most reliable brokers worldwide for traders.
Interest Rate: USD: 4.8%, GBP: 4.7%
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Founded in 1996, Swissquote is a prominent Swiss bank and broker, providing online trading opportunities for an impressive portfolio of three million products, including forex, CFDs, futures, options, and bonds. Renowned for its reliability, Swissquote has earned a solid reputation through pioneering trading solutions. It was the first bank to introduce cryptocurrency trading in 2017, and has since expanded its offerings to include fractional shares and the Invest Easy service.
Interest Rate: USD: 1.75%, GBP: 2%, EUR: 1.5%, CHF: 0.75%
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Saxo Markets is a renowned trading brokerage, investment firm, and regulated bank. Featuring over 72,000 trading instruments, alongside investment products and managed portfolios, it provides abundant opportunities for clients. This reputable brand ensures transparent pricing and is protected by top-tier regulations from more than ten agencies, including FINMA, FCA, and ASIC.
Interest Rate: USD: 4%, GBP: 3.9%, EUR: 2.6%
Note: interest rates are subject to change. Check the current rate available before depositing funds.
What To Consider With An Interest-Earning Investment Account
When evaluating what to do with uninvested cash, consider these factors to ensure your money works effectively for you:
- Weigh the interest rates available for the amount you plan to leave in your investment account. For instance, Swissquote is paying interest up to 2% on balances up to 50,000, however the interest rate drops if you want to deposit more than that. Alternatively, XTB serves British traders of all budgets, paying 4.5% on all balances.
- Consider whether traditional savings accounts offer higher interest rates. At the time of writing, I evaluated the options available and Wealthify stood out by offering 4.91% in their Instant Savings account, while Virgin Money was offering 5.01% in their Defined Access account. The downside is convenience – you’ll need to move funds to an investment account to capitalise on trading opportunities.
- The safety of your cash is another critical aspect. Verify whether your uninvested cash will be protected by insurance schemes like the Financial Services Compensation Scheme (FSCS) in the UK – which insures deposits up to £85,000 per eligible person and up to £170,000 for joint accounts. XTB, eToro and Interactive Investor, for example, are all regulated by the FCA and provide deposit protection through the FSCS.
Interest rates are determined by the rates brokers receive from the banks where they hold your cash. If there are changes in the Bank of England’s base rate you can anticipate corresponding adjustments in the interest rates on your cash.
Pros & Cons Of Interest-Adding Brokerage Accounts
Pros
- Interest automatically added to unused cash helps mitigate the opportunity cost of holding onto idle funds, allowing you to earn a return on funds that would otherwise earn no interest.
- Some brokerage accounts give you the flexibility to earn interest on the funds held within it, and to utilise the account as a financial tool to pay bills directly from your account.
- Account funds remain liquid and accessible for trading or withdrawal, providing flexibility to capitalise on market opportunities or meet unexpected financial needs.
- Interest earned can be automatically reinvested, compounding returns over time without requiring manual intervention.
Cons
- Although earning interest on your uninvested cash is a pleasant bonus, it may not amount to a substantial sum. If you want to earn risk-free interest, you may be better off considering a high-yield savings account.
- While a broker may offer an attractive interest rate on uninvested funds, they may have a minimum balance requirement and will only pay interest on all your uninvested cash if your total balance exceeds a specific threshold.
- Some brokers have account fees and restrictions, which may limit how often you can transfer money in and out.
Comparing different brokerage offers and their terms can help you choose the best place for your uninvested cash, balancing earning interest and having funds readily available for investment opportunities.
Bottom Line
If you want to attain the returns of a high-yield savings account while maintaining nearly the same level of security as a bank, there are possibilities to achieve this within your brokerage account.
Utilising your trading account for banking purposes can also aid in consolidating your financial affairs under one provider, potentially offering additional advantages in terms of simplicity and convenience.
But while many investors view cash interest programs as temporary holding spots, it’s common for uninvested cash to remain there for an extended period. As such, ensure that your cash is positioned optimally for your circumstances, for example, maximising the interest rate.
To find the right platform for you, see our ranking of the best UK brokers paying cash interest.
FAQ
Which UK Investment Platform Pays The Highest Cash Interest?
eToro and Trading 212 are among the highest interest-paying investment platforms in the UK, offering up to 5.3% and respectively, on cash balances.
We’ve compiled a list of the best brokers paying interest on idle funds in the UK, considering their overall trading environment, alongside factors like interest earned on cash.
Do You Have To Pay Tax On Interest Earned From Brokerage Accounts?
In the UK, you may owe tax on interest earned through a brokerage account. HMRC sets the rules on how much tax you will pay, which varies depending on your personal allowance, personal savings allowance, and the starting rate on savings.