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Brokers offering interest on share portfolio

Discuss Brokers, trading, fees, experiences
Cookie
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Brokers offering interest on share portfolio

#235482

Postby Cookie » July 10th, 2019, 10:28 am

I have seen this offer on several platforms, some give more information than others

They say you can sell your shares as normal and anytime as this is a daily calculation

What are the risks here?
Platform failure? Can this potentially be minimised by using the largest brokers?

Are the returns worthwhile?

Alaric
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Re: Brokers offering interest on share portfolio

#235489

Postby Alaric » July 10th, 2019, 10:46 am

Cookie wrote:
Are the returns worthwhile?


If they were offering 1.5% to 2% and you anticipated having sizeable amounts of cash from time to time, then perhaps. Otherwise you are talking about pennies.

mc2fool
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Re: Brokers offering interest on share portfolio

#235498

Postby mc2fool » July 10th, 2019, 11:14 am

Cookie wrote:I have seen this offer on several platforms, some give more information than others

Which? Can you name names and provide links please,so we know what you're talking about?

Cookie wrote:They say you can sell your shares as normal and anytime as this is a daily calculation

So you do actually mean interest on the share portfolio, not on the cash in the account? Presumably for lending your shares out? Some links would definitely help here ... ;)

Cookie
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Re: Brokers offering interest on share portfolio

#235505

Postby Cookie » July 10th, 2019, 11:27 am

Yes, interest on share portfolio rather than interest on cash

For example:

Your portfolio can be worth more
If you have shares, securities, government bonds, ETFs and covered warrants (among those listed by Fineco), you can loan them and receive remuneration of up to 5% gross per annum. The Interest-bearing portfolio service is offered to you at no added cost and gives you total freedom: The value of your securities does not change as a result of the loan and you can sell them at any time without prior notification. Find out the details
https://help.finecobank.com/uk/portfolio/reporting.html#interest-bearing-portfolio

I believe Interactive Brokers also do something similar

Pendrainllwyn
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Re: Brokers offering interest on share portfolio

#235522

Postby Pendrainllwyn » July 10th, 2019, 12:18 pm

Interactive Brokers do lend out your shares if you opt into the service and make your shares available for lending. Of course you only get interest if they actually lend out your shares. I have earned some extra money that way but most of the shares I hold they haven't lent out so whilst the extra income has been welcome it hasn't been enough to get too excited about.

Pendrainllwyn

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Re: Brokers offering interest on share portfolio

#235534

Postby Dod101 » July 10th, 2019, 1:11 pm

Pendrainllwyn wrote:Interactive Brokers do lend out your shares if you opt into the service and make your shares available for lending. Of course you only get interest if they actually lend out your shares. I have earned some extra money that way but most of the shares I hold they haven't lent out so whilst the extra income has been welcome it hasn't been enough to get too excited about.


And what are the risks if any?

Dod

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Re: Brokers offering interest on share portfolio

#235542

Postby Alaric » July 10th, 2019, 1:38 pm

Dod101 wrote:And what are the risks if any?


Moral hazard perhaps. I would feel a bit dubious about supporting shorting because I ask where do the returns from shorting come from? To the extent it's others trading markets less successfully it's only watching a poker game, but isn't there an effect that you pay more for a "buy and hold" and get lower proceeds when you sell to finance those profiting?

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Re: Brokers offering interest on share portfolio

#235549

Postby Dod101 » July 10th, 2019, 2:12 pm

As you are implying it sounds like a self defeating exercise. Hopefully no one would want to borrow my shares anyway!

Dod


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