Savings: Money Market Funds (MMFs)

Lightyear gives you access to money market funds (MMFs), an investment product that lets your cash work harder while staying highly liquid. On personal accounts, MMFs are wrapped in a feature called Savings. On business accounts, they appear simply as Money market funds. Either way, the underlying product is the same.

Depending on your country, your MMF is managed by either BlackRock or J.P. Morgan Asset Management. Both are globally recognised fund managers who have registered their funds locally in your market: BlackRock offers EUR, GBP, and USD funds; J.P. Morgan offers EUR only.

• BlackRock money market funds are available in Austria, Denmark, Estonia, Finland, France, Germany, Hungary, Italy, Latvia, Lithuania (EUR only), Luxembourg, Netherlands, Spain, Sweden, and the UK.
• J.P. Morgan money market fund is available in Croatia, Cyprus, Greece, Ireland, Portugal, Slovakia and Slovenia.

• Money market funds invest in a large basket of short-term bonds from financial institutions and governments. They are investment products, not cash deposits.
• While highly liquid, they come with their own risks. As with any investment, your capital is at risk and you should seek professional advice if unsure.
• MMFs are not traded on an exchange, they're traded directly with the issuer (BlackRock or J.P. Morgan Asset Management) and priced daily.

Lightyear only offers MMFs with the highest possible ratings for this product type. To see the specific rating of an MMF, go to the relevant instrument page and navigate to the Exposure section.

Funds held in MMFs are invested, which means they are not sitting in your cash balance and cannot be used for buying other investments. To use these funds for another investment or to withdraw them to your bank account, you first need to withdraw from Savings (which is selling the MMF position).

When you deposit into or withdraw from Savings, you're actually placing a buy or sell order in the underlying money market fund. Most transactions process within minutes, though in rare cases they may take until the next business day. Here’s how it works.

To put money into Savings, go to the Savings tab in your Portfolio and hit “Add money”. Then select the amount from your cash balance and confirm the transaction. The funds will be moved from your cash balance and a buy order is placed with the issuer on your behalf.

To move funds back to your cash balance, select the “Withdraw” button in the Savings. This places a sell order and the funds are returned to your cash balance. Once the funds are in your cash balance, you can use them to invest in other instruments or withdraw them to your bank account.

Remember:

• You can't buy other instruments directly from your Savings balance. You need to withdraw to cash first (which is making a sell order of your MMFs).
• You can't withdraw directly to your bank account from Savings — it goes to your cash balance first.

Live rates can also be viewed in the Lightyear app. The rates shown are what you'll get after fees have been taken. The fees shown are inclusive of both the issuer and Lightyear fees. Note that Savings are an investment product and rates can change daily.

• 1-day yield: is the average rate of return of this fund over the prior day, if held for one year. It’s calculated by multiplying the daily dividend factor by 365.
• 7-day yield: is the average income return over the previous seven days, if the rate stays the same for one year. It's calculated by taking the accumulated dividend factor for the past seven days, multiplying it by 365, then dividing by 7.
• The yield in Savings shows APY (Annual Percentage Yield), which takes into account monthly compounding — any interest you earn, being reinvested and earning further interest. All fees are reflected in the interest rate, so what you see is what you earn.
• NAV (Net Asset Value): is a calculation used to understand the per-share value of that fund.

• General account (shown as Savings in the Portfolio tab)
• TBSZ (shown as Savings in the Portfolio tab)
• Business account (shown as Money market funds in the Portfolio tab)

Interest on the funds you have invested in a money market fund is paid to your Lightyear account on the first business day of every month and automatically reinvested into the same fund. If you'd prefer to receive the interest as cash instead, you can turn off auto-reinvesting in the Savings/Money market funds settings in the app. Lightyear does not withhold any tax from the interest payment and you are responsible for the appropriate tax reporting.

Returns earned from MMFs may be classified differently depending on your jurisdiction and tax authority you’re reporting to. Seek local professional advice if unsure. See what statements we offer here: Taxes and statements.

MMF units can't be transferred to or from another provider. To move your money elsewhere, you'd need to sell your holdings first and then withdraw the cash.