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Deposit Rates on spare cash

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    Deposit Rates on spare cash

    Hi Team, I am surprised that some brokers are advocating their clients to buy stocks during these volatile times. From my perspective, given the respective tariff positions of Trump& Xi, it will be a long struggle & potentially get ugly before the market stabilises. Immediate improvement in the stock market can be expected if the tariffs are dialled back. My question is,1) how can Interactive Brokers offer their clients good deposit rates on the spare cash in their accounts? 2)How safe are the funds in the IB accounts? Thanks & regards, Sidney

    Answer

    Hi Sydney,

    We would expand your volatile comment to “volatile and exciting times” courtesy of President Trump and his tariff agenda which as we saw on Wednesday night/Thursday morning is not as big as the bond market

    From what we understand Interactive Brokers (IB) pay less than Term Deposits with the likes of CBA but they do compare favourably to many alternatives. However, there is plenty of fine print on there site: Interactive Brokers LLC they they are a  U.S. Broker/Dealer and not a Bank, as such Interactive Brokers’ accounts are not eligible for FDIC coverage, but are insured through SIPC.

    • MM is not licenced to give advice or opinions on the matter, subscribers need to do their own research.

    However, we are looking at the Beta Shares High Interest Cash ETF (AAA) for “cash on the sidelines”, it looks to yield above the bank bill rate after all fees, with all monies in bank deposits.

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    BetaShares Australian High Interest Cash ETF (AAA)
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