Reply To: Broker interest the same as bank account interest?

James Barra
Moderator Team

    Hi CharlieAlwaysTrading,

    Thank you for your message.

    Brokers paying interest on account balances is similar to earning interest in a bank account in that you receive regular interest payments, typically every month, calculated as an annual rate.

    However, there are some notable distinctions:

    • Account type: A brokerage account like eToro is designed for trading, whereas a bank account is for everyday banking needs such as direct deposit capabilities or overdraft facilities.
    • Interest rates: Brokers may offer higher interest rates on account balances compared to traditional savings accounts, as you mentioned with eToro offering up to 5.3%. However, these rates can be variable and subject to change. It’s also worth noting that the interest offered by brokers may come with specific conditions, such as maintaining a certain balance or actively trading on their platform.

    You can find more information about the mechanics of how brokers pay interest in the FAQs of this guide –

    I hope that helps.