As promised earlier this year, XTB has unveiled stocks and shares Individual Savings Accounts (ISAs) for UK investors, offering zero-commission trading alongside a 4.75% interest rate on uninvested cash balances.
Finance Magnates, the first to review the announcement, also had the opportunity to ask additional questions to Joshua Raymond, Managing Director of the UK branch. Raymond acknowledged that this marks another step towards becoming "a full-service investment and savings platform."
XTB's New ISA Combines Zero Commission, 4.75% Cash Yield
The new tax-efficient investment vehicle marks a departure from traditional ISA offerings, combining commission-free trading for most investors with competitive interest rates on idle funds. The account maintains full flexibility, allowing customers to manage their investments without sacrificing tax benefits.
"ISAs have proved wildly popular since their launch 25 years ago," said Joshua Raymond, XTB UK Managing Director. "However, too many accounts have costs and interest rates that are significantly worse when compared to accounts outside the ISA regime. Our intention is to offer terms and conditions that are among the best in the market."
XTB took its first step towards introducing ISAs into its offering back in May by obtaining the necessary licenses, paving the way to enter the £400 billion market. Although the launch was initially scheduled for early autumn, it experienced a slight delay. As Raymond explained to Finance Magnates, “New product launches often take more time than initially envisaged, and we have left no stone unturned in our testing and preparation phases.”
The structure proposed by XTB eliminates trading commissions for the majority of clients, with fees only applying to investors trading volumes exceeding €100,000 per month, who will face a 0.2% fee. Interest on cash balances is calculated daily and credited to customer accounts monthly, ensuring optimal returns on uninvested capital.
Moving to Passive Investments, but CFDs Still Important
The strategy aligns with XTB's broader strategy to “democratize” investment access for UK and global customers through both passive and active investment products. In the meantime, XTB introduced a multi-currency card for everyday payments and Individual Retirement Accounts (IKE) for Polish investors.
"We believe that offering customers a zero-cost route into the market, coupled with one of the best rates of interest is a best-of-both-worlds solution," Raymond added. "It gives customers the confidence to go in and out of the market as and when they choose without feeling their cash is not working for them if it remains uninvested."
The launch builds on the fintech ’s established presence in the global financial technology sector, where it serves over 1.2 million clients across Europe, the Middle East, and South America. The company, listed on the Warsaw Stock Exchange since 2016, recently expanded its offering with the introduction of Investment Plans, enabling automated investments in customizable passive ETF portfolios.
Raymond confirms that XTB is moving towards becoming a full-service investment and savings platform. However, this will not affect the current dominance of CFDs, which account for 98% of the company's revenue structure. "We expect the ISA to complement rather than overshadow our other offerings," explained XTB's UK Managing Director.
“We want our offering to be the most competitive in the market and our ISA launch is just the latest example of that commitment,” added Raymond. “While we don’t expect ISAs to shift the balance for us in a material way, by continuing to roll out high-demand investment products we aim for XTB to become the go-to platform for all investors.”
The ISA is the latest in a series of initiatives planned by XTB for this year. Alongside it, the company rolled out two-factor authentication (2FA) and social trading, among others. However, one goal, adding bonds to its offering, remains unfulfilled.
At the beginning of next year, XTB plans to unveil its strategy for 2025. And who knows, bonds might make the list. Finance Magnates also inquired about the PEPP Scheme, the EU's counterpart to the UK's ISA and Poland's IKE, but Raymond did not confirm or deny the company’s plan in this matter.
„We keep our product pipeline continually under review but rest assured we are extremely committed to delivering the investment products our clients demand and this will continue as we announce our 2025 plans early next year,” the XTB’s UK Managing Director concluded.
The offering upgrades appear to be paying off for the Polish broker. In Q3 2024, the company reported a 67.3% increase in revenue compared to the same period in 2023. Revenues for the first nine months of 2024 also grew, reaching 1.4 billion zlotys. Meanwhile, net profit for the past quarter nearly doubled, jumping to almost 204 million zlotys.
