Trading app Freetrade to offer 3% on cash to keep client flow

Anna Irrera
·1 min read

By Anna Irrera

LONDON, Dec 1 (Reuters) - Commission-free stock trading app Freetrade will offer 3% interest on cash it holds for clients between their investments up to a maximum of 4,000 pounds, in a drive to attract more customers.

London-based Freetrade said on Tuesday that the service, which will be offered to its premium account holders, will be calculated on cash balances on a daily basis and paid monthly.

Freetrade's move is the latest by a fintech looking to attract new users with interest rates above the market average.

Digital brokers such as Freetrade in Britain and Robinhood Markets Inc in the United States have seen business surge as retail investors turn to online trading during coronavirus lockdowns.

Freetrade and its rivals are seeking to shake up the online brokerage market by offering commission free trades coupled with user-friendly apps. Popular with younger investors, they must keep growing their customer base rapidly to maintain cashflow.

Launched in 2018, Freetrade has grown to more than 250,000 users and said its trade volumes surpassed 1 billion pounds ($1.34 billion) in September.

Backed by venture capital firm Draper Esprit, Freetrade is planning to open European headquarters in Stockholm as it plans to expand into more countries in the region. ($1 = 0.7489 pounds) (Reporting by Anna Irrera; Editing by Alexander Smith)