In February last year, Australian FX firm AxiTrader began to offer interest on client deposits of 1% on AUD denominated trading accounts that have minimum equity free of margin of AUD$10,000 or more.
Today, Alpari has taken this route, offering up to 10% interest on deposits.
In a global economy where interest on bank accounts is very low, and FX retail client acquisition costs are very high, this could be regarded as an effective means of increasing client lifetime value whilst offering them a potentially appreciating asset at times when they are inactive traders, thus increasing the assets under management for a brokerage.
Although AxiTrader provided a 1% interest which at the time was equivalent to the RBA Base Rate minus 1.50% p.a, this offer by Alpari promises to pay interest at a considerably higher rate. These examples, whilst very much still representative as pioneering efforts in FX firms paying interest on deposits, are not the first examples of a retail FX company offering such a system, with now defunct Liquid Markets having done away with bonuses in favor of paying interest to clients on their deposits in May last year.
As with these kinds of offers, it comes with a catch – in the form of minimum deposit and minimum trading volume:
For the official announcement from Alpari, click here.