Branson-backed Lightyear increases interest rate on cash balances for Irish users

Investment brokerage Lightyear has raised the interest rate on uninvested balances held by its Irish users to 3.25 per cent.

The platform, which is backed by Virgin founder Richard Branson, offers multicurrency investment and interest accounts to clients in the UK, Ireland and other European states, operating in 22 countries. It began business in 2021, and has been operating in Ireland for the past year, where it says it has seen significant growth in the past three months.

The company tracks the European Central Bank rate, passing it on to customers for cash balances held with Lightyear minus a 0.75 per cent fee.

Lightyear offers different interest rates on different currency accounts, but customers can convert their money into dollars, sterling or euro to take advantage of the highest rates on offer. Customers also have access to more than 3,500 international stocks and exchange traded funds across the US, UK and other European countries, with some local Irish stocks included.

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Lightyear was founded in October 2020 by former Wise employees Martin Sokk and Mihkel Aamer. The company has offices in London and Tallinn, Estonia.

The company is authorised and regulated as an investment firm by the Estonian Financial Supervision Authority, giving it the ability to provide services in all EU and EEA countries. Customers’ assets are protected up to €20,000 by the Estonian Investor Protection Sectoral Fund, with uninvested funds held with regulated EU credit institutions and high-rated money market funds.

“The banks were already criticised a few weeks back for their gimmicky efforts to raise the rates on their saving accounts for Irish customers – only doing it for elite customers, for a short amount of time and with lots of minimum and maximum criteria and caveats,” said Mr Sokk. “What about now, with yet another rate hike that’s not being passed on to them? Many Irelanders – who’ve been loyal to their banks since they put their first bits of pocket money in them – should be questioning whether it’s finally time to dump them.

“Irelanders are particularly short-changed when it comes to getting the interest they deserve on their money. The average interest rate on household deposits with an agreed term was just 1.02 per cent in Ireland in February, whilst the equivalent rate in the euro zone was 1.92 per cent.”

To date, Lightyear has raised $35 million (€32.8 million) in funding, backed by Lightspeed Venture Partners, Mosaic Ventures, Metaplanet and Taavet+Sten, alongside Mr Branson, and early Monzo backer Eileen Burbidge.