iban Wallet: A Warning Message
In case you want to explore how to open an Iban Wallet account, check the article How to Open a Iban Wallet Account before reading this one.
What investment products does Iban Wallet offers?
Iban Wallet offers multiple investment products with different terms and returns. Iban Wallet states that all investments are backed by a collateral (assets) and all loans come with a Buyback Guarantee as well as cover from Iban Wallet Safeguard Trust. To learn more about how the platform protects investors, read Iban Wallet: Platform Risk Analysis.
Basic Offer: Iban Account
Iban account is the basic and main account offered by Iban Wallet. It has the following features:
- Minimum deposit: 1€.
- Yearly Interest Rate: 2.5% (AER).
- Immediate Liquidity – which means that you can deposit or withdraw your funds at any time.
- Daily Compound Interest – Which means that you will receive interest on interest that you have earned.
If you don’t need immediate liquidity, Iban Wallet offers additional options based on specific time frames to help you earn more for your savings when compared with traditional bank savings accounts, but much lower interest, if compared with similar risk investment options:
Iban One (1 year deposit)
Iban One main features:
- Minimum deposit: 1,000€.
- Yearly Interest Rate: 3% (AER).
- 1 year term: if you decide to withdraw your funds before the term ends, there will be a penalty (2.5% penalty).
- Daily Compound Interest – Which means that you will receive interest on interest that you have earned.
Iban Market (3 year deposit)
Iban Market main features:
- Minimum deposit: 1,000€.
- Yearly Interest Rate: 4% (AER).
- 3 year term: if you decide to withdraw your funds before the term ends, there will be a penalty (2.5% penalty).
- Daily Compound Interest – Which means that you will receive interest on interest that you have earned.
Iban Dynamic (5 year deposit)
Iban Dynamic main features:
- Minimum deposit: 50,000€.
- Yearly Interest Rate: 6% (AER).
- 5 year term: if you decide to withdraw your funds before the term ends, there will be a penalty.
- Daily Fixed Interest – Fixed interest, paid daily on your Iban Account.
Again, remember that Iban Wallet is a investment account and you capital is at risk.
How is Iban Wallet Daily Interest Calculated?
Iban Wallet pays interest daily. Over the course of the year you will receive daily interest installments that will add up to the projected AER. But what is AER?
AER stands for Annual Equivalent Rate, which refers to the interest you would garner in your account provided you leave your principal an entire calendar year. AER standardization is designed to facilitate comparisons among financial products and takes into account compound interest (interest generated from your initial deposit as well as previous interest earned).
Iban Wallet calculates the daily interest by raising the AER to the power of 1/365 (AER ^ (1/365)). This is the formula used by Iban Wallet:
Daily Interest = [Current Balance] x ( ( (1 + AER) ^(1/365) ) – 1 )
Let’s say you deposit €10,000 on your Iban Account, which has an interest rate of 2.5%. How much daily interest are you going to earn?
Day 1
Daily Interest = €10,000 x ( ( (1 + 2.5%) ^(1/365) ) – 1 ) = €0.67
Updated Account Balance = €10,000.67
Total Interest Earned = €0.67
Day 2
Daily Interest = €10,000.67 x ( ( (1 + 2.5%) ^(1/365) ) – 1 ) = €0.67
Updated Account Balance = €10,001.35
Total Interest Earned = €1.35
…
Day 365
Daily Interest = €10,249.30 x ( ( (1 + 2.5%) ^(1/365) ) – 1 ) = €0.69
Updated Account Balance = €10,250
Total Interest Earned = €250
After 365 days have passed you will have earned €250 in interest and your account will have reached the 2.5% projected AER (assuming no further deposits or withdrawals were made).
You can also see that daily interest payments are increasing over time. That is because Iban Wallet pays compound interest (except on Iban Dynamic). Which means that every time you receive interest, it will be added to calculate interest based on your total balance (for that product) including interest that you have already earned.
Additional Iban Wallet Investment Options
In June 2020, Iban Wallet launched additional investment options, in answer to investor requests. You can check this additional options on the post Iban Wallet: Short Term Deposits.
iban Wallet: A Warning Message
What to learn more about Iban Wallet?
Iban Wallet Alternatives and Competitors
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