Commission-free share trading and investing app Freetrade, has launched a new cash investment facility which offers easy access and attractive interest rates.
Freetrade cash investments
Freetrade clients will now be able to invest in a range of ETFs that track the overnight interest rate markets in both GBP and USD.
According to the fractional shares broker, these funds offer better rates than are available from the average easy-access savings account.
There are no lock-in periods or fixed terms, and the ETFs are SIPP and ISA eligible, allowing Freetrade customers to benefit from these higher interest rates within a tax-free wrapper.
Cash is back
Rising interest rates have turned cash back into an asset class and with UK inflation now running at 4.60% pa and thus below Bank of England base rates, investors can once again receive a positive real return on uninvested cash.
Freetrade is offering a minimum of five funds from ETF providers that include Lyxor and Xtracker.
Speaking about the new cash investment offering Freetrade’s Head of Communications, Alex Campbell said:
“With rising rates and volatile stock markets, cash or cash-like investments are increasingly looking like a sensible place for investors to park their cash. If a very low-risk fund can be expected to generate a return of over 5% over that period, investors can sit back and offset inflationary headwinds while they wait for investment opportunities to emerge. “
He added
“These funds offer investors greater flexibility than savings accounts and returns that track overnight lending rates, not the whims of banks. Unlike savings accounts, these ETFs can be bought and sold during market opening hours, their returns track the latest benchmark rates set by central banks, and they can be held with cash already inside a tax wrapper.”
Who are Freetrade?
Freetrade was founded by its CEO Adam Dodds back in 2016 and the firm now has more than 1.4 million customers.
It offers clients access to commission-free dealing in more than 6,000 stocks and ETFs via its app.
The firm is independently owned and has attracted 19,000 individual shareholders through crowdfunding.
Freetrade has also received funding from venture capital funds, most notably Molten, and Left Lane Capital.
Investing in cash
Cash is often overlooked as an asset class.
True many portfolios won’t always have large cash balances.
However, as traders and investors sell out of positions or top up their portfolios, they will have uninvested cash balances to manage.
The ETFs that Freetrade are offering could provide an efficient way to get the best returns on that money, particularly when high street banks are in no rush to pass on higher interest rates to savers and investors.
- Related Guide: Best brokers for getting interest on cash balances
With over 35 years of finance experience, Darren is a highly respected and knowledgeable industry expert. With an extensive career covering trading, sales, analytics and research, he has a vast knowledge covering every aspect of the financial markets.
During his career, Darren has acted for and advised major hedge funds and investment banks such as GLG, Thames River, Ruby Capital and CQS, Dresdner Kleinwort and HSBC.
In addition to the financial analysis and commentary he provides as an editor at GoodMoneyGuide.com, his work has been featured in publications including Fool.co.uk.
As well as extensive experience of writing financial commentary, he previously worked as a Market Research & Client Relationships Manager at Admiral Markets UK Ltd, before providing expert insights as a market analyst at Pepperstone.
Darren is an expert in areas like currency, CFDs, equities and derivatives and has authored over 260 guides on GoodMoneyGuide.com.
He has an aptitude for explaining trading concepts in a way that newcomers can understand, such as this guide to day trading Forex at Pepperstone.com
Darren has done interviews and analysis for companies like Queso, including an interview on technical trading levels.
A well known authority in the industry, he has provided interviews on Bloomberg (UK), CNBC (UK) Reuters (UK), Tiptv (UK), BNN (Canada) and Asharq Bloomberg Arabia.
You can contact Darren at darrensinden@goodmoneyguide.com
