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Wise launches ‘Interest’ to rival ‘old-school’ savings accounts

The payments company’s new product will enable users to hold money in government-backed assets.

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Wise customers can now earn ‘Interest’ in line with local rates directly through their accounts.

The new product will allow users to keep money in their Wise accounts and earn interest-like returns with their money held in government-backed assets.

For customers in the UK, Wise is launching the asset on GBP, USD and EUR balances with interest rates mirroring those offered by the Bank of England, the US Federal Reserve and the European Central Bank respectively.

“At Wise, we’re making financial lives easier for international people and businesses. That was our goal when we launched the Wise Account, and now we’re improving that by giving people the option to grow the money they hold with us,” Wise senior expansion lead for assets Gabriel May said.

“With traditional banks, you often can’t control how they lend your money, and you don’t receive the full amount earned from the investments they make. We’re building something better.”

May added that the ‘Interest’ asset is meant to be more rewarding and transparent than the way traditional banks pass on rates, offering both people and businesses more options.

Wise said that compared to an often unspecified cut of earnings taken by traditional banks when lending, Wise is charging 0.29 per cent, including fund manager costs.

The payments firm is trying to rival banks’ interest-bearing accounts by using a public debt money market fund.

The current annual yield variables are 3.29 per cent, 2.52 per cent and 0.88 per cent on USD, GBP and EUR balances respectively.

Wise said 99.99 per cent of the money held will be immediately available to spend and send on the app.

It plans to roll out ‘Interest’ to costumes across Europe next, having secured its investment licence in Estonia earlier this year.

“While these are currently available in the UK only, we’re always looking to bring the best experience to our customers all over the world,” May said.

“This brings us another step closer to replacing old-school international banking.”

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