Global transfers and payments Fintech Wise (LSE:WISE) has announced an interest-generating option for cash held in a Wise account. The feature is available for US customers and follows a similar option made available for UK customers.
Wise states that both business and personal customers in the US are now able to opt-in to receive 3.92% APY on the USD balances in their multi-currency accounts. Those who opt-in to receive interest are eligible for FDIC pass-through insurance up to $250,000 through Wise’s program bank JPMorgan Chase Bank, N.A.
Wise states that this is not a checking or savings account adding that the service charges no fees and does not have a minimum nor limit to amount of cash in the account.
Wise explains that it stores customer funds with program banks, which generates interest. As rates have improved, Wise says it is “continuing to honor its core value of transparency by providing an option for its US customers to benefit by earning interest on their USD balances.”
Sharon Kean, director of global expansion at Wise, said that they believe interest on customers money should be passed back to them whenever possible.
“The Wise account is the universal way to manage money internationally and was built to save our customers time and money. We’re now enhancing that offering with the launch of our new interest rate feature.”
As interest rates have risen in the US, many bank customers have rushed to generate yield on idle cash with a growing number of options. At the same time, many big banks offer a paltry interest rate on savings accounts. If Wise wants to keep funds within its own accounts, providing a return is required to keep competitive.
Wise notes that rates do change over time.
Wise is also offering similar options, having recently launched “Balance Cashback” in Europe and “Interest” Assets in “some” European countries.
Wise established itself as a simple, fast, secure and low cost platform to transfer funds – usually at a better exchange rate than other providers. As more neobanks and digital banks are providing services, you can anticipate Wise to offer a growing number of digital financial services to make its platform stickier for customers.
