Alex von Stachelkopf
In order to trade Forex (or any other financial market) you need to open a trading account with a broking company. Most Forex traders make substantial deposits ($10K - $100K or even more). If you, as a professional trader, observe money management rules (2-5% per trade), then most of your deposited capital is idle most of the time. Some brokers decided to offer their clients some pleasant bonuses, including annual interests accrued on the idle (free) part of their deposits. What are those broking companies and dealing centers? Which brokers offer the biggest interest? Do such bonuses mean that a certain broker or dealing center offering them is “dirty”?
’s rating of FX brokers : Which brokers offer annual interest on idle capital?
According to , only 9 brokers and dealing centers, which represent the ultimate and second league of its rating of FX brokers , offer such bonuses: FIBO Group, FOREX MMCIS group, FreshForex, Forex4you, TeleTrade, RoboForex, InstaForex, United World Capital, Saxo Bank.
As we can see (look at the table to the right), the highest interest bonuses (5.5%-24%) are offered by TeleTrade, InstaForex, Forex4you, FOREX MMCIS group, FreshForex, RoboForex while the lowest ones (2%-3.5%) are offered by United World Capital, Saxo Bank, FIBO Group.
Whether these bonuses are good or evil for Forex traders?
Market Leader tried to find out the truth by analyzing numerous opinions (pros and cons) expressed by traders, analysts and the brokers themselves.
Opinions “in favor”:
The major benefit is obvious: you get extra money on your deposit. This thesis was confirmed by a range of brokers.
According to Mikhail Zakharov from FreshForex (number 18 in the ultimate league of ’s rating of FX brokers ), such a bonus is a part of the broker’s loyalty program.
“We are a client-oriented company interested in long-term cooperation with our clients. That is why we provide beneficial trading conditions. High interest on idle capital is a confirmation: 6% per annum for standard accounts and 8% for NDD-accounts «MarketPro». However, if the entire capital is idle (a client doesn’t trade), the interests goes down to 2%.
Moreover, we offer spread rebates for active traders for generating trading volume. This is a win-win situation: the trader gets extra money, we get trading volume and earn more money”.
FOREX MMCIS group:
“Obviously, any trader wants to trade with a broking company which can offer him as beneficial and comfortable trading conditions as possible. That is why more and more companies start offering interest on idle capital. One shouldn’t be afraid of such offers. There are no hidden fees of tricks behind that offer. Such bonuses are introduced to encourage traders and to help them secure against inflation.
FOREX MMCIS group can guarantee +12% per annum on idle capital for any deposit. We strive to support our clients in every aspect possible. This is one of our guiding principles. When working with FOREX MMCIS group, traders can be at ease about their funds”
ICM Brokers:
“It is neither good nor evil in essence. It is just an option for clients. Broking companies differ in many aspects, including trading conditions. For example, for relatively inactive traders (a couple of trades a month) such an option will be a benefit even despite spreads and commissions. On the contrary, there are companies that are oriented towards low commissions. They do not provide any interests on idle capital but are beneficial for intraday and mid-term traders”.
Opinions “against”:
Eugene Olkhovsky, a Canadian expert for :
“When it comes to interests on idle capital, it is their size that gives rise to doubt and confuses most of all. Some brokers offer 12-13% per annum or even more. This is 2-4 times as big as the yield offered by the world’s leading banks. How do they cover these expenditures? At the expense of spreads and commissions? Their bookkeeping is not transparent so we cannot find out anything about that. Why do banks from around the world are not in a hurry to deposit their funds with those brokers at 12-13% per annum? Answer the question – and the situation will clarify.”
Pavel Platonov, TeleTRADE:
In essence, it is not right to compare our and bank yields as we have different kinds of business. TeleTRADE provides such bonuses only for active traders. If you deposit and do not trade, you won’t get any interest accrued on your idle deposit.
The bonus is paid on a monthly basis - 2% a month (24% a year). We are so grateful to our active clients that we are ready to share our profits with them. We have been offering this bonus for over 2 years and it has been in great demand since the very start.
Should consider this aspect when making changes to its rating of FX brokers ?
Market Leader and would appreciate if you could participate in a survey. Please, visit the Academy’s forum for traders and investors and answer the following questions:
Interest on idle capital – a benefit or a wakeup call for traders? Should consider this aspect when making changes to its rating of FX brokers ?
will take into account the results of the survey when deciding on further improvements in its rating of Forex brokers .
If the majority votes “for”, each positive statement will give each of the mentioned brokers 1 rating point for each percent they offer (For example, TeleTrade – 24Points, InstaForex – 13 points etc.)
If the majority votes “against”, the brokers will get no points at all.
Alex von Stachelkopf
