Invest your cash. Track overnight bank rates.

Try Cash Investments:
low-risk ETFs, now on Freetrade.

Capital at risk. Always do your own research.

Now on Freetrade

Cash Investments

Low risk. Easy access. What's not to love?

The place to park your cash

Freetrade’s Cash Investments are a collection of low-risk ETFs. They track or try to outperform overnight rates, like the fed funds rate or Sterling Overnight Index Average (SONIA), or invest in ultrashort investment grade bonds.

Try Cash Investments

High rates: Track overnight bank rates.

Low risk: Keep your cash, with low volatility.

Easy access: Buy and sell them whenever you want. No minimum term.

You can pick a Cash Investment that tracks one of the following overnight rates:

Remember, overnight rates fluctuate daily, so the rate you receive may fall. You’ll also need to consider fund fees and FX.

While Cash Investments are low risk, they’re not the same as a bank account. Your investment can go down as well as up.

Where Cash Investments really shine is when you want easy access to your cash, but don’t want it to sit idle. Maybe you’re planning on spending it soon or you’re researching your next investment opportunity. No matter your plans, Cash Investments offer a low-risk place to park your cash in the meantime.

Freetrade does not give investment advice and you are responsible for making your own investment decisions. If you are unsure about what is right for you, you should seek independent advice.

Cash Investment Marketplace

Rate trackers

These ETFs all track the rates banks get when they borrow money overnight.

Try Cash Investments

Check Key Information Documents for the latest info.
Capital at risk. Always do your own research.

Ultrashort bond ETFs

These ETFs all invest in ultrashort, low-risk bonds.

Try Cash Investments

Check Key Information Documents for the latest info.
Check the provider’s website for more detail and the latest yield-to-maturity (YTM).
Capital at risk. Always do your own research.

A tax-efficient option

All the Cash Investments on Freetrade are ISA and SIPP eligible. Which means income and capital gains are free of UK tax. So your cash goes even further.

ISA and SIPP eligibility rules apply. Tax treatment depends on your personal circumstances and current rules may change.

FAQs

What are Freetrade’s Cash Investments?

Freetrade’s Cash Investments are a collection of low-risk ETFs. They track or try to outperform overnight rates, like the fed funds rate or Sterling Overnight Index Average (SONIA), or invest in ultrashort investment grade bonds. This makes them a popular place to park cash.

They invest in short-term, highly liquid instruments. So in a variable interest rate environment, they’re quick to pass on changing rates to investors. 

Are there different types of Cash Investments?

Freetrade offers two categories of Cash Investments. 

Rate trackers: these are ETFs that track a particular interest rate benchmark. Specifically, they either track SONIA or the fed funds rate. Which are, respectively, the rate at which UK and US banks borrow money from each other overnight. 

Ultrashort bond ETFs: these are ETFs that invest in high-quality, low-risk ultrashort bonds (generally with a maturity below one year). 

What do accumulating and distributing mean? 

This refers to what an ETF does with the income (dividends or interest) that it receives from the investments in its portfolio. 

If a fund is accumulating, the income is reinvested into the fund. Bring on the power of compounding!

If the fund is distributing, the income is given back to the shareholder as cash. The fund decides how often this happens - it could be quarterly, semi-annually, annually - anything goes. The KIID will make this clear. 

What are overnight benchmark rates?

An "overnight benchmark rate" is a reference interest rate used by financial institutions for short-term lending and borrowing, usually for an overnight period. Different countries have their own specific overnight benchmark rates, such as the federal funds rate in the USA and SONIA (Sterling Overnight Index Average) in the UK.

The effective federal funds rate is the interest rate that banks in the US charge each other for overnight loans in the federal funds market. It is calculated each day by the New York Fed. It is influenced by the Federal Reserve's monetary policy, specifically the target federal funds rate set by the Federal Open Market Committee (FOMC). 

SONIA reflects the average of the interest rates that banks in the UK pay to borrow sterling overnight from other financial institutions and other institutional investors. It is updated each day based on actual transactions and is administered by the Bank of England.