Can the interest rate on Flexible Accounts change?
The currency of each Flexible Account we offer (EUR, USD and, GBP) represents a different money market fund (MMF) in which you invest when adding money. The interest rate varies amongst these different types of Flexible Accounts depending on the performance of the respective MMF. Each fund has different performance and it fluctuates every day, which leads to daily changing yields. The interest rate is expressed in the form of Annual Percentage Yield (APY).
The APY indicates how much your money could grow if you held the investment for an entire year and the yield remained constant (which in practice does not) after deducting the applicable fees. The APY is updated daily in the app based on the performance of the fund on the previous day, which is provided by the fund manager. The APY is calculated by deducting from the fund’s yield of the previous day the relevant fees. Fees vary depending on the MMF, your subscription plan and region. For more information, review the MMF Ex-ante Costs & Charges Disclosure.
The performance of the fund depends on several market conditions affecting the instruments the fund invests in, such as: their liquidity, the solvency of the issuers, financial developments impacting the issuers and the decisions of the central bank of the respective currency to increase or decrease interest rates. For example, the MMF performance will tend to increase when central bank interest rates increase and vice versa. The objective of these funds is to provide a return in line with money market rates. For more information on performance and risks, review the Risk Disclosure document.