Banking
Richard Branson. Photo: Getty
Lightyear, the investment app backed by billionaire Richard Branson, has introduced online accounts in Ireland to enable businesses invest their cash and earn an interest rate of 2.75pc on uninvested cash.
The deposit rate for the new business accounts compares to just 0.25pc on demand deposit accounts offered by AIB, while Bank of Ireland pays 0.10pc, said the neobroker.
‘It’s important that businesses become smart about where they put their cash’
More than €73bn, or 82pc of savings held by businesses in Ireland, sits in in demand deposit accounts earning an average of 0.14pc in interest, according to analysis carried out by the European Central Bank (ECB).
This is significantly lower than the equivalent eurozone average rate of 0.87pc, as well as the freshly reduced ECB deposit rate of 3.5pc.
Interest on business accounts accrues daily and is paid out monthly, with no minimum deposit required for a business to use the platform, according to Lightyear, which was founded in 2020 by former Wise employees Martin Sokk and Mihkel Aamer.
“There’s lots of talk around how banks don’t pass on high rates to consumers’ savings,” Sokk said. “But what about businesses’ savings?
“With the ECB base rate still above 3pc, it’s important businesses become smart about where they put their cash.
“But existing options for them to do this – whether with banks or new fintech – are practically non-existent. The market is in need of a huge shake-up.”
Lightyear business customers can convert euro into dollars or pounds to take advantage of exchange rates and invest their spare cash into a range of 3,500 international stocks and exchange-traded funds (ETFs) for free.
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Publish date : 2024-09-28 17:30:00
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