Wise (Transferwise) new Interest accounts

ArJay_2

My question is whether we are the beneficial owners of any deposits in the Blackrock MMFs mentioned (like holding shares / funds on a platform such as ii or AJ Bell) or is this money held in the name of Wise? I can't find this mentioned anywhere and it matters in the unlikely event that Wise becomes insolvent. I plan to ask them this question but wondered if anyone had already done so?

ArJay_2

Just had confirmation from Wise that I am the beneficial owner. Good to know. I might well increase my euro holding now in the Blackrock fund via Wise.

OceanSound

ArJay_2 said:

I actually found it surprisingly quick and easy (a few minutes) at least for the Euro version. I don't intend it to be a savings account but an ongoing Euro float that I can easily convert to GBP at a market rate when needed (unlike my Euro account at HSBC - about 4% worse!) Starling sounds good, but that's yet another bank account and no interest paid of course.

How much EUR did you invest? 

What is the value of that investment if you were to withdraw the money today?

CKhalvashi

Wagster said:

Thanks for your comments everyone. Seems we were right to be sceptical! 

I don't think it's really designed as a savings account though, but if someone wants to hold some bonds in various currencies they can.

I hold about £100 currently in Wise on a personal account, plus some stray Georgian Lari and Ukrainian Hrivna (totalling about £3) and use them to pay some international business bills when necessary through a business account (where the balance is almost always 0). I'm not too bothered about that £100 and don't really need to earn interest on it. It can sit there until we go away in May (but may book a few days in April if finding cheap flights).

stuart_b

There are other issues to be aware of...

Although Wise advertises them as "interest" for the unsuspecting, any gains you make are treated as capital gains and subject to capital gains tax (CGT).

For anyone who thinks - yeah I know that, I'm used to accumulating funds etc, there a bit more to it.

With normal investing, you choose when you transact and can plan to some degree to be efficient with your (ever-decreasing) capital gains tax allowance.  

With Wise any currency exchange also generates a taxable event because when you change, say, GBP to Euros, you sell the Blackrock GBP fund and buy the Blackrock Euro fund.  

Wise provide a tax certificate after the tax year ends, but if you're trying to work out your tax position during the year the calculations are fiendish.  You'll be doing s104 pool calculations at least.

If you say, exchange some money and then within 30 days top up your account because you want to exchange some more, you'll be doing 30 day matching rule calculations.  This can also happen because Wise takes the monthly investment fee by selling units (although these amounts won't be significant for CGT).

All the calcs have to use on the day exchange rates as well which can make a huge difference.

None of this is a big deal if the amounts are small, but if you're putting a larger amount through there (e.g. if you have a business or perhaps are planning a move abroad and plan to buy a house) it needs management and Wise don't provide anything to assist other than the raw data.

A savings account it is not.