"Plum Interest launches in Ireland offering 3.45% rate for savers" - Irish Examiner

[podgerodge]

Plum Interest launches in Ireland offering 3.45% rate for savers

The smart app has partnered with global asset management firm, BlackRock, who are providing the money market fund that supports Plum Interest

www.irishexaminer.com

Plum Interest launches in Ireland offering 3.45% rate for savers
The smart app has partnered with global asset management firm, BlackRock, who are providing the money market fund that supports Plum Interest.

@Lightning

(No mention of lack of deposit guarantees in article, but perhaps of interest to some).

 

[Lightning]

This is a money market fund product rather than a savings product.

There is no capital protection with money market funds.

I can't find any details on the Plum website on this. Can anyone else? I can see the GBP MMF details.

On LinkedIN Plum say that their EUR MMF will pay ECB minus 0.33% to 0.39% which would mean about 3.60%+ but maybe Plum are referring to the rate before TER/fees? The awful Examiner article (largely copy and pasted press release with no critical assessment) says the rate is 3.45%.

MMF have 41% tax on gains but it seems that the Plum MMF pays interest daily (if it operates like the GBP one) - if so, perhaps there are no capital gains and just daily distributions which I guess are subject to income tax? So you would potentially be paying over 50% in tax on this product.

MMF are very popular in the US as an alternative to savings accounts.

There are better options than this product. Good analysis on Reddit here and also here of MMF fund options. For example, CSH2 tracks the Euro Short Term rate (about 3.90%) less 0.05% TER with free purchases via Trading212.

Lightyear have apparently started offering Blackrock MMF's too in certain countries but not in Ireland yet.

Good to see Plum target Ireland but it would be nice if they offered a traditional EUR savings account too like they do in the UK. Hopefully, Plum expand their offering here. Also, hopefully other UK providers such as Freetrade and Chip (who both are expanding in Europe) launch here too.

 

[Lisboa]

Can't say I've ever heard of Plum but I'm researching more into this. Could be a viable instant-access option to run alongside Trade Republic if you've maxed out the TR 50k limit.

Plum pass the Euro Short-Term Rate onto you (currently 3.90% today) minus a 0.20% fee for themselves and minus 0.10% fee for Blackrock. So it lands at 3.60%. Not sure where the Examiner got 3.45% from.

Certainly a good way to access a Money Market Fund via proxy thus avoiding 41% exit tax. It's specifically called Plum Interest so I'd expect gains to be taxed under DIRT.

I was just the other day looking to see if there's a UK Investment Trust which acts as a sort of MMF proxy - thus would be subjected to 33% CGT minus the €1270 allowance - couldn't find any.

Trying to decipher the level of protection with this. It's clear enough that your cash isn't protected under a DGS, but is instead protected by The Financial Supervision Act in the Netherlands.

The Plum FAQ's state

Is my money protected?

The fund manager for Plum Interest is BlackRock, an investment company with global presence.

Plum is a partner of Modulr Finance B.V., authorised and regulated by the Central Bank of the Netherlands. ) Any money invested with Plum Interest is protected by the Financial Supervision Act.

That means your money is safeguarded by a regulated custodian. So if anything should happen to Plum (or our fund provider), your assets will be passed back to you and can’t be touched by anyone else.

If the custodian fails or in the unlikely event that Plum defaults, customers would be paid back through a safeguarding account which is protected by law. Any money owed to Plum customers would be paid from the safeguarding account after costs have been settled.

I'll have to read more into the Financial Supervision Act. This is the link but I haven't gone through it yet; https://www.dnb.nl/en/sector-inform...and-eu-regulations/financial-supervision-act/

I'm still not quite sure if Plum actually forward your cash onto Blackrock, or hold your funds with Modulr (who in turn use JP Morgan to safeguard funds according to this link; https://withplum.com/legal/Europe Safeguarding Explanation.pdf).

I can't find any details on the Plum website on this. Can anyone else? I can see the GBP MMF details.

This is the Euro version of their interest page; https://withplum.com/en-ie/plum-interest/

And then this is the actual Blackrock fund - https://www.blackrock.com/cash/en-g...ck-ics-euro-gov-liquidity-premier-acc-t0-fund

 

[Lightning]

Thanks for the added information Lisboa.

The Blackrock website says that this MMF is accumulating but the Plum website says that you get returns daily but maybe that just refers to returns being displayed on their website daily but "interest" is not distributed/paid daily? If so, no 50%+ tax if there are no distributions but 41% tax surely applies, I mean this is clearly a MMF and not a deposit product (there is no capital protection and it is clearly a reselling of a Blackrock MMF). Plum calling this "interest" slightly misleads that this is a deposit product when it is not.

Plum advertise this as aprox. 3.61% and you have correctly calculated 3.60%. There are higher yielding MMF such as CSH2 with much lower fees (0.05% versus 0.30%) but the Blackrock name might attract some people to this product.