According to the news issued by Hong Leong Investment Bank, deposits in stock trading accounts will be entitled to an interest rate of 1.75% p.a.. The interest rate will be calculated on a daily basis and will be remitted to the customer’s stock trading account in a lump sum at the end of the month.
This adjustment by Hong Leong Investment Bank is in line with the National Bank’s increase in the Overnight Policy Rate (OPR) in early September, when it raised the OPR from 2.25% to 2.50% p.a.
Hong Leong Investment Bank raised the rate from 1.10% to 1.30% p.a. in May, from 1.30% to 1.50% p.a. in July and now to 1.75% p.a. in September. If the National Bank raises interest rates again in November, then the Bank of Hong Leong Investment will surely follow suit and raise the interest rate on its stock trading account.
If you are worried that your regular bank account is not safe, you can choose to deposit your money in a stock trading account. However, it takes at least 1 working day to withdraw money from a stock trading account and you can only transfer money to a bank account in your name, which is both a benefit and a disadvantage. The advantage is that you can avoid theft withdrawals, while the disadvantage is that you do not receive the money immediately.
If you are keeping your money in a stock trading account with the aim of earning interest, this is very uneconomical as it is lower than a normal time deposit rate. If you are only holding your money in a trading account to earn interest while you wait for the stock price to fall or for the right time to buy the stock of your choice, this makes sense.
