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Lightyear launches UK business investment accounts with access to BlackRock’s money market funds

Helping SMEs to get a better return on their excess cash

Martin Sokk and Mihkel Aamer/Lightyear

Martin Sokk and Mihkel Aamer/Lightyear

Investment app Lightyear is today launching UK business investment accounts that will enable sole director companies to invest in stocks, funds and ETFs on the same terms as its retail customers.

Along with the new accounts, Lightyear has also struck a new partnership with asset manager BlackRock which will make its money market funds available to Lightyear’s business customers.

“Two years ago cash wasn’t an asset for businesses, it was a liability in many parts of Europe because when you had lots of cash you had to start paying the bank to keep it there,” Lightyear CEO and co-founder Martin Sokk told AltFi.

“Now it’s the other way around.”

Money market funds are a type of mutual fund that invests in cash, cash equivalents and short-term debt securities, and are often used by larger corporates as a cash management solution due to their low risk and high liquidity.

However, these funds have high fees or minimum investment amounts in the millions or tens of millions, which exclude them as an investment for the majority of businesses.

With its new business investment accounts companies can now access these money market funds for an annual fee of between 0.09-0.30 per cent.

The rest of Lightyear’s pricing for businesses mirrors that of its retail offering, including interest of up to 4.50 per cent paid on uninvested cash.

While Lightyear competes against the likes of Hargreaves Lansdown and Freetrade in the retail investment space, for this new market of small and medium-sized businesses Sokk says Lightyear has a different rival.

“To be honest, I don’t see huge competitors in the market, maybe our competitors are banks because businesses already have the money there.”

Today Lightyear is starting with sole-director businesses, but Sokk says the company is also working on support for multi-user and larger businesses in the next few months.

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