IG Group (LON: IGG) is offering its new UK customers an interest rate on deposited cash of up to 8.5 per cent AER variable, which is double the Bank of England’s current 4.25 per cent base rate.The London-headquartered broker launched the offer a day after the Bank of England reduced its interest rates by a quarter point to 4.25 per cent. However, the central bank highlighted that the current reduction was not on a preset path to further cuts. The base rate was 5.25 per cent from mid-2023 to mid-2024, until the central bank began reducing it last year.When the base rate rises, banks and other financial institutions can offer a higher interest rate on customer deposits, but lending becomes more expensive. The opposite happens when the central bank cuts the base rate.A Promotional Offer to Boost DepositsIG Group’s offer will only be available to new customers who open accounts under one of its ISA, SIPP or General Investment Account (GIA) schemes.“While others cut, we’re doubling down,” said Michael Healy, UK Managing Director of IG. “At a time when rates are falling and investors are cautious, we’re offering new customers a standout return on their cash of 8.5 per cent.”However, it appears promotional, as new users must sign up before 31 May and will receive the higher interest rate only until 31 August 2025. After that, the interest rate will revert to IG’s standard variable rate, which matches the Bank of England’s base rate (4.25% AER variable).You may also like: Google Lifts IG France’s Ads Restriction after 7 Years, Account Openings DoubleBrokers Compete with Interest OffersInterest on uninvested cash was not common among brokers a few years ago, until central bank rates across many developed economies increased sharply. Brokers were already earning significant income from interest on customer cash, and some of them eventually began sharing part of that income with customers, which led to a broader industry trend.Platforms like XTB and BidX Markets have been offering similar features since 2023. Other brokers such as Interactive Brokers, Webull, Trading 212, IG-owned Freetrade, and eToro US also offer interest on uninvested cash. Recently, NAGA began providing its customers with 2.77 per cent APY on uninvested euro cash balances.“Many investors are sitting on the sidelines right now as they wait for market clarity – this offer gives them a place to park their money and still earn a serious return, which is head and shoulders above anything else out there,” Healy added.Meanwhile, brokerage industry disruptor Robinhood plans to roll out “checking and savings accounts with premium benefits”, offering 4 per cent APY later this year. This article was written by Arnab Shome at www.financemagnates.com.

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