A potential cash interest rate battle may be brewing between traditional investment platforms and fintech challengers, as UK online broker IG Group shakes up the market with an eye-catching 8.5% AER variable interest offer for new customers. The move comes just a day after the Bank of England (BoE) lowered its base rate by 25 basis points to 4.25%.

In a bold move that bucks the usual trend of lowering rates in line with the BoE, IG Group has doubled its interest rate for new UK customers until August 31. The 8.5% interest offer—available across IG’s ISA, SIPP, and General Investment Accounts (GIA)—applies to those who open an account and make an initial investment before May 31. After the promotional period, rates revert to IG’s standard variable rate, which currently matches the BoE’s base rate.

IG Group Sparks Cash Interest Rate Battle with 8.5% Offer

Michael Healy, UK Managing Director at IG, framed the offer as a strategic response to investor uncertainty: “While others cut, we’re doubling down… This offer gives investors a place to park their money and still earn a serious return.”

The interest applies to uninvested cash held within the qualifying accounts, provided customers hold an open investment position at the end of June, July, and August. Notably, existing IG account holders can also qualify—if they haven’t yet placed a trade and do so by the May 31 deadline.

This aggressive move from IG signals a shift in how providers attract retail investors, with interest-bearing cash incentives becoming an increasingly competitive feature. Combined with recent zero-commission stock trading and fee transparency initiatives, IG appears to be setting the pace for traditional brokers and fintechs.

With the highest cash rate on the market and a growing suite of investor-friendly features, IG’s latest offer could ignite a rate war, pressuring rivals to follow suit or risk losing market share.

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