Best Interest Rates on Uninvested Cash

Which brokers and investment platforms pay the most interest on uninvested cash?

Currently, Trading 212 (4.9%), Dodl (4.75%), and Bestinvest (3.95%) pay some of the highest interest on uninvested cash, including for investment accounts with lower balances.

Other platforms, including Freetrade, Interactive Brokers, Interactive Investor and Hargreaves Lansdown, also pay competitive interest rates, but these are tiered according to account balances.

Interest rates have been declining across the board, but you can still get some pretty decent returns with these investment accounts.

There are some caveats: AJ Bell’s Dodl simplified investment app, for example, only offers ISAs.

Trading 212 offers perhaps the easiest route to immediately earning good interest on cash. However, this requires opting in for your money to be placed in money market funds, which do not receive the standard Financial Services Compensation Scheme (FSCS) guarantee on balances up to £85,000.

Bestinvest offers one of the overall simplest and safest options for those looking for decent rates, with the same rate paid regardless of how much uninvested cash you keep in their accounts.

Bestinvest

Bestinvest pays interest on all cash held in any of your accounts and doesn’t have account tiers. So, unlike – for example – Interactive Brokers, you can still receive interest on cash if you have an account balance of less than £8k.

Trading 212 

Trading 212 offers interest on all account types, including general investment accounts and ISAs. This requires users to opt in, as their money will be placed in money market funds.

Money market funds are treated as investments and, as such, do not receive the standard Financial Services Compensation Scheme (FSCS) guarantee on balances up to £85,000 should they fail and lose money. It is rare for a money market fund to fail, but it could still happen, particularly in conditions of extreme market volatility.

AJ Bell Dodl 

The ISA and Lifetime ISA on AJ Bell’s Dodl simplified investment app offer one of the best interest rates among competitors. Dodl does not offer a general investment account or SIPP, however.

Freetrade

Freetrade offers it’s maximum interest on up to £3,000 in uninvested cash under its Plus account subscription plan, which charges £9.99 a month.

Freetrade’s lowest tier, the Basic Account plan, which is free to use, offers interest of 1% up to £1,000.

The Basic plan offers a general account, while the Premium plan offers access to an ISA and personal pension.

Lightyear 

Lightyear offers a standard interest rate on cash across all account types. Customers can further boost this up by allocating their money to Vaults, or money market funds, which are managed by BlackRock.

Money market funds are treated as investments and, as such, do not receive the standard Financial Services Compensation Scheme (FSCS) guarantee on balances up to £85,000 should they fail and lose money. It is rare for a money market fund to fail, but it could still happen, particularly in conditions of extreme market volatility.

Interactive Brokers (IBKR)

IBKR offers good interest on uninvested cash, but you only get the full amount if you have over £100k on account, including cash and investment. It is not great for small accounts, though, as there is no interest payable on balances and portfolios below £8k.

Saxo 

Saxo pays interest on uninvested cash with no lock-in period or cap, and your rate tracks the market on a daily basis. But, as with IBKR, if you have less than around £8k on account, you don’t get any interest. The more you have on account, the better interest rates you receive.

To get their top interest on cash, you need between £1m and £2m in a VIP account.

AJ Bell

AJ Bell pays fairly high interest on cash balances for their SIPP and Junior SIPP accounts.

For stocks and shares ISAs, the maximum interest is higher than with share dealing accounts where interest rate payments are paid quarterly, and they are scaled.

For example, if you had £50,000 cash in an AJ Bell account, £10,000 of this money would earn the ‘£0–£10,000’ interest rate, while the remaining £40,000 would earn the ‘Above £10,000’ interest rate.

You can’t combine your SIPP and ISA balances to get better interest rates, as they are charged separately.

Hargreaves Lansdown 

Hargreaves Lansdown has increased interest rates on its accounts, bringing it further in line with competitors.

Among its accounts, the platform’s SIPP offers the best rate for uninvested cashfollowed by their ISA, then general investing account.

Interactive Investor

As with all Interactive Investor pricing structures, they are a little complex, as a lot of it is scaled and dependent on what type of account you have.

For ii’s ISA, Junior ISA, and trading accounts, cash balances will receive a certain amount of interest on the first £10,000, then more on the value between £10,000 and £100,000. If you’ve got a very big account with over £1m, you can receive the best rate.

eToro 

To get interest on your free cash balance with eToro, you need to activate it. You can get interest starting at $0.01. The level of interest paid scales according to a customer’s Club Tier, which is determined by how much money users keep in their account.

To get the best interest rate, you need a “Diamond” account with a NLV (net liquidation value) of over $250,000.

Vanguard

Vanguard offers a standard interest rate across its accounts. This is relatively low compared to rival investment platforms, which the firm justifies by stating it uses part of the interest from its accounts to fund its services.

CMC Invest 

CMC Invest offers a standard rate of interest on uninvested cash across any of its accounts.