I need to inform you today about a change which will affect you as an investor from January 1st 2021. As you are no doubt aware, deposit interest rates across the Eurozone are at a historic low, which has led to the Banks imposing negative interest rates and charging their business account holders to hold cash on deposit. Over the last year, Linked Finance has absorbed these charges without passing these fees onto investors. Sadly however, the banks have increased these charges steadily in the last few months, and it has come to a point that we can no longer absorb these fees.
It is therefore with reluctance that from 1st January 2021, we will be levying a new Balance Fee on available cash deposits on the platform.
What will change
From 1st January 2021, any investor who:
a) has not invested in any loans in the past 3 months, or
b) has an available cash balance in excess of €5,000 on the Linked Finance platform (regardless of bidding activity levels),
will be charged a monthly fee, equivalent to 1.25% per annum, of your available cash balance on the Linked Finance platform. Eligibility for the fee will be assessed on the 1st of each month, after which the fee will be calculated daily and then deducted from your account on the last calendar day of each month.
Any cash you have invested in a live loan will not accrue these charges.
You will be able to monitor this Balance Fee charge by looking at the Available Cash panel in your Linked Finance account.
Next steps
To avoid this charge, or significantly reduce the charge deducted, you should:
- Reduce the amount of cash deposits you have on the platform by making a withdrawal. You may make withdrawals free of charge until 31 December 2020. After that date, you can make 1 free withdrawal over €250 per month.
- Actively monitor the amount of available cash you have on the platform on a regular basis to ensure you don't keep more money on the platform than you need to.
- Review your autobid strategy to make sure that you don't miss out in opportunities to bid on new loans on the platform.