📈 Now available: EVEN higher interest on uninvested cash!

Hi @lupocos
I am in the UK and have this activated on my Invest account.
Daily payments:

If you click the > symbol on the right of one payments, it provides more details, 27th as example:
image
Interest on Cash (NET).

For any other questions, hopefully someone else can help :slight_smile:

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It is the former. T212 are paying you interest. How they create the money to pay you that interest (such as put it in a money market fund) is their concern. You are not actually the owner of a personal stake in any specific money market fund, as you would be if you invested through Wise in shares of a Blackrock fund.

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I Just Wanted to understand the risks…

*If interest rates increase will my capital be at risk? (Eg decrease in size bonds lose value")

*or is money being parked at Federal Reserve reverse-repo and collecting 5.25% over night? If thats the case what happens when 20% capacity thats left in the facility is used up?

I want to know what happens if Intrest Rates Go up. What will i lose “capital sum” … am i right in thinking mmf buy bonds.

I have alot of money sitting in Block Trades, will that money get Intrest paid ?

Google money market funds and how they work, more specifically QMMFs.

Since I’ve seen some people confuse US regulations, here is a link to the UK regulations:

https://www.handbook.fca.org.uk/handbook/glossary/G2422.html

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Thank you @Unknownuser and @Richard.W for your replies.
However I would like to receive a confirmation from someone in the T212 team about whether we can treat it as gross interest payments like a normal savings account, as opposed to directly buying/selling shares in a MMF (which may also have capital-gains tax implications for UK taxpayers).

Above, @G.G wrote that they haven’t started using QMMFs yet and that

So maybe the way these are shown in the client statements will change?

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It won’t be treated as direct buying or selling. If you hold an ISA account, your interest is not subject to withholding tax, and you do not owe any additional tax. In any other case, you should contact the local tax authorities for more information.

We’ll share updates about the statements at a later stage.

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@Bogi.H Many thanks for confirming that it won’t be treated as direct buying or selling but as a form of interest income.

I’ll look forward to those upcoming updates about the statements.

The local tax authorities won’t be able to help if people can’t articulate what they have invested in.

It seems the invest is treated as savings interest, as it would be in a current account for example, but if that is the case - why not make that clear in the comms? Why muddy the waters by telling customers about QMMF risks if that isn’t relevant to the return the customer receives?

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In line with HMRC’s guidelines, all earned interest within investment accounts or bank/building society accounts is treated as savings interest. As a UK resident, you have a Personal Savings Allowance of £1,000 for such earned interest.

In terms of the earned interest in your ISA, as we previously noted, all income received in the form of interest, dividends or from realised profit is exempt from capital gains taxes.

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@Momchil.G thanks

That’s correct if you’re a basic rate taxpayer; for higher rate that is only £500, and for additional rate taxpayers it gets down to £0.

Especially for the lucky ones who are in the latter group, it’s of outmost importance that we understand exactly what we are subscribing to.

I agree with @TInvest that the communication from T212 could be clearer, and the mention of risks associated with QMMF only adds to the confusion as to whether this must be treated as an investment product, with the consequences that this entails for tax purposes.

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Thanks, that’s a lot clearer than the comms on the website.

One minor question, what do you mean ‘by presumption’?

I’m glad that made things a bit more clear.

I meant it in a legal context - the assumption of truth. I’ll edit my comment and remove the phrase, as I don’t want it to cause any confusion :pray:

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I was just reading this…any news about the type of instrument and the domicile of these QMMF (according to currency))?

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Hi @Team212, @Momchil.G, @Bogi.H, @G.G, @KrisG

Are T212 already using the QMMFs, if so not, do you have an idea when they will be used? And have more information about the QMMFs?

When the old/original interest on uninvested cash scheme will end? And when it ends, no more interest will be earned unless we accept the conditions for the new interest on uninvested cash?

When the AUD accounts and interest income will be available for T212 UK and T212 Cyprus?

As of the moment, there aren’t any updates. Once there is news, we’ll update the Help Centre article, and I’ll post it here.

The old rates applied till 12.02.2024. If you want to receive interest after that date, you’ll have to enable it from the dashboard.

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First of all, thank you for your great work, you are very helpful!!! :muscle:

When we “Enable”, we enable both the bank deposits and the QMMFs?

I’m still a bit confused, can you explain which is the correct option:

A) We as investors are investing in the bank deposits and the QMMFs?

B) Or it’s T212 that invests in bank deposits and QMMFs (meaning that no bank deposits and QMMFs are held in the investor’s name or in behalf) and then T212 pays to the investors the interest income?
To be more clear, for example, banks receive deposits from their clients and then the banks lend or invest for themselves and pay their clients interest income on their bank deposits, and the clients don’t have no link (direct and indirect) to the banks’ investments, for the client’s point of view, it’s just interest income for their banks accounts, nothing else.

Adding another questions about interest on foreign currency (FX) accounts:

  1. When we receive interest income in FX accounts, that interest will stay in their respective accounts (e.g. USD interest on USD account) or go to the base currency account (e.g. EUR account)?

  2. When we receive interest income in FX accounts, we know the values in both local currency (e.g. 1.00 USD) and in the base account currency (e.g. 0.90 EUR)?

Not for the time being. But I will update you personally once it’s available :slight_smile:

The former - the interest remains in the respective currency (USD from your example).

The interest is displayed only in the respective currency, not in the account’s base one.

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