IBKR Offering About 2.90% - 3.40% On Large Balances

time to plan said:
You would think that in a functioning market, a European bank could hoover up the savings market by offering 2.5% 7 days' access and placing it at ECB at 3%.
Click to expand...

I have often thought similar. There would seem to be a real opportunity for a European bank to hoover up deposits and earn a return.


I appreciate that there are capital requirements but why would the capital requirements stop this? Surely, the capital requirements simply mean that x% needs to be retained as capital?

Banks (and the NTMA for State Savings) are not increasing rates because they can get away with it because few switch and they therefore increase their margins. In the US banks have experienced big outflows due to low rates, the same has not happened here.
 
How much of deposit is protected. I read on stickied thread that only 90 percent of 20k is protected.
But on this thread I read 100% of 100k is protected.

Anyone have correct answer?
 
Superman8 said:
How much of deposit is protected. I read on stickied thread that only 90 percent of 20k is protected.
But on this thread I read 100% of 100k is protected.

Anyone have correct answer?
Click to expand...

90 percent of 20k is protected ...

Client Protection - Strength and Security | Interactive Brokers Ireland

Interactive Brokers LLC (IBKR) takes a proactive approach to client protection. Compare client protection at IBKR vs industry standards.
www.interactivebrokers.ie

 
The interest rate they pay on euros is currently down to 2.008%. Hopefully the recent ECB rate rise might cause it to go up again. I am surprised that it has gone down so much since the €STR has not substantially declined.
 
Today it's 2.36% (on €100k).

I wonder if they use an algorithm depending on clients total net idle cash to recalculate a daily margin. Or they may just simply reduce it on a weekend.
 
Their methodology unfortunately doesn't make it clear exactly how they come up with the numbers. They are at least clear that the rate will always be within 1% of the Euro Short-Term Rate (€STR), so it might reduce the frequency of required updates to the Best Buys post and title of this thread to instead say that it is currently greater than about 2.15%.
 
Yeah, a new approach is needed to how the rate is reflected in the best buys and the title. I will put it as an approximate range of 2.10% to 2.70% which the rate seems to be inside most days.
 
I made a post in the Tax section to ask how the interest from IBKR should be reported for tax. So far no one has replied, but hopefully someone knowledgeable will and it will be useful for anyone who deposits money there. The answer might also be quite important for some people as, if my guess about how it should be reported is correct, the interest will be taxed at your marginal income tax rate rather than at the DIRT rate.
 

Yep my expectation would be that the IBKR cash balance is a little like money market fund in the US....I mean it isnt....IBKR deposits it with with their own or partner banks and also uses the cash for margin loans....so effectively IBKR is paying you something akin to a dividend on the cash you deposit with them the dividend % just tracks the ECB rate up and down so looks like interest
 
You must log in or register to reply here.
Menu
Log in
Register