Does EasyEquities pay interest on uninvested cash as of October 2023?
No, EasyEquities doesn't pay any interest on uninvested cash, so make sure you don't leave too much cash lying around at EasyEquities for too long.
I've thoroughly tested EasyEquities services with our analyst team by opening a real-money account and these are my most important findings:
- EasyEquities offers no interest on your uninvested funds
- Interest on your cash can help preserve its value while you search for your next investment target
- Your cash is as safe at brokers as at most banks
- Watch out for minimum balance requirements or inactivity fees
USD maximum cash yield
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Data updated on October 10, 2023
How interest on uninvested cash can benefit you
Whenever you have some uninvested cash on your broker account, you may feel the urge to withdraw and/or reinvest it so that it doesn't just lie around, losing its value due to inflation. If this is causing you headaches, we have good news for you: many brokers now offer meaningful interest on your uninvested cash.
There can be significant differences among brokers when it comes to interest on uninvested cash: some don't pay anything, while some brokers pay higher rates than banks. If interest paid by the broker is high enough, it may be worth depositing money even if you don't intend to invest it right away.
Similarly, if you sell a stock or other asset, there's no need to withdraw the proceeds; you can simply keep it in your broker account and therefore avoid withdrawal or conversion fees. If your broker pays a good interest rate, there's less pressure to reinvest your cash, meaning you can avoid potentially ill-timed investment decisions.
In most cases, there's little reason to worry about safety when keeping cash in your broker account. In the US, for example, the default protection scheme by the Securities Investor Protection Corporation (SIPC) insures your cash holdings up to $250,000 in the case of broker bankruptcy. Often, brokers keep clients' uninvested cash in separate accounts at various banks, adding an extra layer of security in the event of broker bankruptcy.
Eager to seek out advice or improve your investment skills? Check out our overview of the most popular learning tools for long-term investors.
Things to watch when managing your cash
Earning interest on your uninvested cash is great, but there are a few things to keep in mind:
- At some brokers, you need a minimum account balance to qualify for interest; this can sometimes be quite high (upwards of $100,000).
- If you maintain a broker account solely for the purpose of earning interest on your cash, choose a broker that doesn't charge an inactivity fee or regular account fee.
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Are you in the stock market for the long term? Check out our list of the top brokers for buy-and-hold investors.
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