What is uninvested cash?
Uninvested cash is any cash that you have not invested in instruments like stocks and ETFs. Based on your registered entity, uninvested cash is held in banks and QMMFs. Learn more about QMMFs below.
📄Note: For Trading 212 AU PTY LTD clients, funds are held only in banks. Any further QMMF information does not apply.
How does it work?
Enable interest on cash and start receiving daily interest on the cash in your account.
Which account types are eligible for interest?
All accounts are eligible for interest.
What are the current interest rates?
Are there any min or max balance requirements to earn interest?
There are no minimum or maximum balance requirements.
How do I enable the interest?
Login to your account, tap on ‘Earn Interest on cash’, follow the instructions and tap the ‘Enable’ button. You’ll need to consent to having your cash held in qualifying money market funds (QMMFs).
What if I don’t want to earn interest?
You can disable it at any time via the ‘Interest on cash’ dashboard in your app.
How does Trading 212 earn this interest?
We use a mixture of products and vehicles, such as qualifying money market funds, time deposits and current accounts. For Trading 212 AU accounts, time deposits and current accounts with banks are used.
What’s a qualifying money market fund (QMMF)?
Who uses QMMFs?
How is the daily interest payment calculated?
Daily interest payments are calculated using the industry standard APY formula:
(1+r/n)^n - 1, where
* r = interest rate
* n = compounding frequency (365.25 days)
We use 365.25 days to account for leap years.
💡Example
- Daily payment (DP) = Cash balance * [(1 + APY) ^ 1/365.25 - 1]
- DP = $1,000 * [(1 + 0.05) ^ 1/365.25 - 1]
- DP = $1,000 * (1.05 ^ 1/365.25 - 1)
- 365.25th root of 1.05 = 1.00013358
- DP = $1,000 * (1.00013358 - 1)
- DP = $1,000 * 0.00013358
- DP = $0.13358
How often do I get interest?
Do I have to pay taxes on the earned interest?
This depends on your tax residency. For more information, check 👉 here.
Which currencies earn interest?
Is my money still protected?
Where we hold your money with a bank, clients of Trading 212 UK Ltd. are protected by the FSCS up to a limit of £85,000. Clients of Trading 212 Markets Ltd. are protected by the ICF up to a limit of €20,000 and are additionally insured up to €1M by Lloyd’s of London. Learn more about how your money is protected here.
Money placed with a QMMF is treated as an investment and not as money held with a bank. In the unlikely event that the QMMF fails to maintain their low-risk strategy, as with any investment, the protection will not be available. We carefully select all QMMFs to ensure that they are highly liquid, stable in value and maintain their highly regulated status.
Can QMMFs go down in value?
If a QMMF in which your cash is invested goes down in value, this may affect the value of your uninvested cash held in the QMMF. However, to manage this risk, we select only high-quality QMMFs, and we monitor them frequently. Learn more about the risks of QMMFs and how we manage them 👉 here.
How much of my money is held in QMMFs?
You can see your cash holdings in QMMFs and banks through the app's 'Interest on cash' dashboard and in the 'Cash in banks' and 'Cash in QMMFs' sections of your account activity and monthly statements.
How often do interest rates change?
Interest rates are based on rates we receive from the banks and QMMFs we hold your cash with. These rates are based on the central banks' rates, like the Bank of England's base rate. If the central bank rate changes, you can expect a change in the interest on cash.