Interest on cash

With dividends paid as cash, why not pay interest on them? It means that people could use freetrade for their investing money and their emergency fund.

Because Freetrade would probably cease to exist as a company if they start paying interest on dividends your receive.

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I believe Freetrade earns some small interest on uninvested cash balances. But as part of their revenue model they keep for themselves (as is common for brokers).

It would be good, but guess there’s a trade off as they would have to make the revenue another way…

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It’s probably a tiny amount and will be even less when fractional shares are introduced

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Happy if Freetrade can make any money in interest.
I want Freetrade to be profitable and viable from a selfish point of view so I can continue to invest with them forever.

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I received email from HL
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Basically they connect your account to multiple bank which provide different interest rates and different lock-in periods.

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Currently on Freetrade, are dividends paid into the same account as cash?
If so, will there be a way of differentiating dividends from cash in the future?
I’m fine with Freetrade making money on my cash, if they offered dividend re-investment as fractional shares.

Nice to see that the Coventry easy access rate is the same as the rate you’d get direct

I must say that I’m opposing this idea. I vastly prefer (as an investor in Freetrade) that Freetrade collects interest as part of their business plan.

Plus, there’s no incentive to hold cash in Freetrade. If you want to hold cash and earn interest, why not use dedicated savings accounts?

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I think it’s more about removing the barriers between all accounts generally.

It can take quite a while to get money out of say an investment account and then into a decent savings account.

All the money I invest comes from savings, to my current account, into my investment account. Somewhat messy

If something like that exists I would put most of my money is that kind of account.
On HL website they are saying that they would take some money from banks, 0.25%

They don’t have this for ISA account yet.

I have cash sitting in my ISA without earning anything, of course I could have invested in funds/stocks/bonds etc.

I think this will have positive effects on account openings and account balances, I also think once people move money into investment accounts they tend to keep it there.

I don’t think FT will do something like this though.