Anyone keeping safety cash amount in Interactive Brokers for interest rate?

W

WillSnow

New member
I know that a cash savings is for safety and shouldn't be optimised ... BUT ... the 4.2% interest I could get on our cash at Interactive Brokers is quite something.

Yes, that rate is if we keep it in USD and not CHF.

At UBS we get 0.75% I believe, and that's only recently.

Coming from the UK where we're used to free banking with good cash interest, it's just a hard thing to adjust to.

Is anyone keeping their cash in Interactive Brokers?
 
Hi

Be very careful about emergency cash in USD. If the USD loses 10% of its, so do your emergency funds.
I recommend keeping emergency funds in CHF. You should not add currency risk to something like this.
 
Thanks for quick reply.

Yes, that's a good point.

Is there any ... 'thought leadership', as it were ... on the expected volatility and long term trend of CHF to USD?

A quick look at the charts show historically CHF has improved for USD, which I guess would be bad if that trend continues and your cash is kept in USD.
 
WillSnow said:
Is there any ... 'thought leadership', as it were ... on the expected volatility and long term trend of CHF to USD?
Click to expand...
The Swiss franc has historically been very strong. The general train of thought is that the Swiss franc is likely to grow against most other currencies. However, I would not bet anything on that. Nobody knows what the future holds.
 
I plan to do it with a portion of my funds as soon as my current US T-bills expire. However, I am not very reassured about the exchange rate.
 
Baptiste Wicht said:
Is it your emergency fund or part of your portfolio allocation?
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That's part of my portfolio allocation (approx 30%). I would like to put more assets on IBKR, but my cautious side prevents me from doing so.
From what I've read, IBKR appears very safe, but still.
 
kabi said:
That's part of my portfolio allocation (approx 30%). I would like to put more assets on IBKR, but my cautious side prevents me from doing so.
From what I've read, IBKR appears very safe, but still.
Click to expand...
cash it still more conservative than stocks, even though any USD position will have some currency risk.

I am not too worried about IB, but currency risk is something you should take currently. Generally speaking, cash does not follow inflation (and often, neither do bonds), but any interest is better than zero.
 
I would not consider my case emergency fund, but I still have a good junk of my money in USD at IBKR. Simply because we were 9years in the US and sold our house. For now I take the benefit of the high interest rate in the US, but waiting for a better time to exchange most of it to CHF. I might wait forever *lol*
 
If I remember correctly there is a limit to the amount of cash you can hold in IB, and if you go above that one then you pay negative interest. I remmber reading it but I can't find this anymore though.
 
ducatona said:
If I remember correctly there is a limit to the amount of cash you can hold in IB, and if you go above that one then you pay negative interest. I remmber reading it but I can't find this anymore though.
Click to expand...
This limit does not exist anymore since we don't have negative interest rates in Switzerland anymore. However, you only get interest on amounts above 10K with IB. But there is no upper limit.
 
Baptiste Wicht said:
This limit does not exist anymore since we don't have negative interest rates in Switzerland anymore. However, you only get interest on amounts above 10K with IB. But there is no upper limit.
Click to expand...
Here is the explanation provided by IBKR regarding the interest rates : 1709475589823.png
 
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