Interest rates are annualised, which means funds inside the ‘Cash with Fixed Interest’ section of your Interest Rate Pocket earn interest every day, gradually reaching the full rate within a year. The best part? You don't have to wait a full year to cash in your earnings; you can withdraw your funds at any time.
On the funds you keep in the ‘Cash with fixed interest’ section of your Interest Rate Pocket, you receive interest daily based on the lowest balance available from the previous working day. If you deposit money on a weekend, holiday, or the day before these, the funds you add will only count towards your balance in the ‘Cash with fixed interest section‘ from the following business day.
Your fixed interest rate depends on your plan, the most recent rates are listed here.
Interest earnings in detail
Vivid’s annual fixed rate represents the percentage you can receive on your funds held uninvested in the ‘Cash with fixed interest’ section of your Interest Rate Pocket. The interest will be automatically added to the total balance of your Interest Rate Pocket and start accruing interest from the next day. By keeping these returns untouched throughout the year, you will be able to maximise the interest earnings of your chosen plan.
The interest rate Vivid indicates is also known as the effective rate, or the Annual Percentage Yield (APY).
The interest is added to your balance daily in four steps:
Determining the minimum balance: your lowest balance during the previous working day.*
Calculating the daily interest rate: your annual rate (APY) is multiplied by the fraction of one year (1/365).
Calculating the daily interest amount: the defined minimum balance (1.) is multiplied by the daily interest rate (2.).
Adding the interest: the calculated interest amount is added to the ‘Cash with fixed interest’ balance in your Interest Rate Pocket.
This process repeats daily, growing your money every day!
*For the day you open your Interest Rate Pocket, Vivid does not consider the minimum balance (which would be EUR 0) but applies the balance at the end of the day instead. This way you can start earning interest immediately from the day after opening!
The formula looks like this:
Minimum balance (from previous working day) x (1+fixed annual interest rate) ^ (1/365) - Minimum balance (from previous working day) = daily interest amount paid
Here’s an example of how it works:
1. You have a plan with an annual interest rate of 2% and deposit EUR 10,000 on January 1st. As it is the first time you are making a deposit into your Interest Rate Pocket, Vivid will assume the balance at the end of January 1st (Central European Time) as the minimum balance.
2. On January 2nd, interest calculation begins:
EUR 10,000 x (1+0.02) ^ (1/365) - 10,000 = EUR 0.54
Your total balance is now EUR 10,000.54. From here onwards, Vivid will always use the minimum balance of the previous working day for the calculation of interest.
3. This means that on January 3rd, EUR 10,000 is used as the minimum balance and you will accrue EUR 0.54
4. On January 4th, the minimum balance from January 3rd which was EUR 10,000.54 is used.
5. Unless you withdraw funds from your Interest Rate Pocket, your funds will continue accumulating yields and by January 1st of the following year, your balance will have grown to EUR 10,200.