International money transfer company Wise has launched a new savings product.
Launched in the U.K. on Thursday (Dec. 15), the new “Interest” product lets Wise Assets customers in the U.K. earn interest on their pounds, euros and dollars. The annual variable yields are 3.29% on USD balances, 2.52% on GBP balances and 0.88% on EUR balances, Wise said in a statement emailed to PYMNTS.
Interest rates are calculated by tracking the rates offered by the respective central banks that issue each currency: the Bank of England, the U.S. Federal Reserve and the European Central Bank.
To ensure it is able to offer returns in line with these, Wise is using a public debt money market fund (MMF), a type of fund that invests in short-term assets issued and guaranteed by governments.
The statement said that 99.99% of money held will be immediately available to spend and send, with customers able to move money into Interest from the Wise app without incurring transaction costs.
The firm intends to roll out the product to customers across Europe in the future.
“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,” Gabriel May, senior expansion lead for assets at Wise, said in the release.
“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. ‘Interest’ is designed to be more rewarding, and more transparent,” he added.
Wise isn’t the only international money transfer business venturing into the savings market.
Western Union has also launched a digital banking product, WU+, which allows users to earn up to 3% interest on multiple currencies.
As Massimiliano Alvisini, Western Union’s general manager and senior vice president for Europe CIS and Africa told PYMNTS recently, the new service is part of the company’s efforts to reinvent itself.
“We want to evolve from being primarily a cross-border remittances [company] to being the world leader of branded payment and accessible consumer financial services,” he said in an interview.
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