Ascentric will introduce three new tiers of higher interest rates for cash held on the platform from 1 July.
The wrap provider’s highest band now offers an interest rate of 5% and applies to balances over £500,000.
In addition, a further tier presents an interest rate of 4.75% for cash balances between £150,000 and £249,999. Another tier offers 4.85% in interest for balances between £250,000 and £499,999.
Previously, the top tier for cash held earned clients 4.5% on £50,000 or above.
“This is good news for both IFAs and their clients, as we aim to improve the rates of interest available in cash balances,” says Hugo Thorman, managing director of Ascentric.
“This also supports the change in our market as more high net worth clients hold a greater proportion of cash on our platform.”
The Bank of England has set the interest rates independently, although Investment Funds Direct is able to amend them at any time. Interest is calculated on a daily basis and applied to accounts quarterly.
Royal London Cash Management has been appointed to spread the cash deposits across banks rated AA and above by Standard and Poor and maximize interest returns for clients, while the stability of financial institutions is under the spotlight.
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