Trading 212 Removes Clause Limiting Interest Payments for Inactive Investors

Trading 212 updates terms and removes a clause that limits interest payments for inactive clients, enhancing clarity and customer experience.

Key Points: 

• Trading 212 has removed a clause that suspended interest payments for inactive clients, effective October 4, 2024.
• The broker introduced interest in uninvested funds earlier this year, joining a trend among trading firms.
• Trading 212 has expanded with a recent acquisition and a new cryptocurrency license despite revenue and profit declines in 2023.

Trading 212 updated its terms to remove a clause restricting interest payments for inactive clients. This update aligns with the trend among retail trading firms and CFD brokers offering interest on uninvested funds.

In May 2024, Trading 212 introduced an exciting offer for idle cash in trading accounts, similar to moves by competitors like XTB, BidX, and Webull. These companies began offering interest rates of up to 5% on uninvested funds to attract and retain clients in a market where high interest rates push investors to seek safer, interest-bearing options.

Trading 212 Removes Clause Limiting Interest Payments for Inactive Investors

Trading 212‘s initial terms included a provision allowing the company to suspend interest payments for clients who did not actively trade. This clause aimed to ensure compliance with regulatory permissions but was considered unfavorable by some investors. As of September 2024, this term has been removed from the Invest terms, effective October 4, 2024. The revised terms now guarantee that the company will not suspend interest payments solely due to inactivity.

Mukid Chowdhury, CEO of Trading 212, explained that this change is part of the company’s effort to enhance clarity and transparency in its terms and conditions. The company removed the clause to provide a more transparent and customer-friendly experience. 

In addition to the terms update, Trading 212 has been actively expanding its operations. Last month, the company acquired FXFlat Bank GmbH to enter the German market, aiming to offer its commission-free investment platform to German investors. Earlier this year, Trading 212 also obtained a cryptocurrency license in Cyprus, allowing it to operate as a crypto asset service provider.

Trading 212 has encountered challenges, including a 3% drop in revenue and a 28% decline in pre-tax profits for 2023. These issues stem from rising administrative costs and intensified marketing efforts.

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