How You Earn Extra Income in Your EasyEquities Account đź‘€

Published on: Aug 2, 2023 10:55:00 AM

Imagine having the chance to earn interest on your funds while you're investing. With EasyEquities, you can do just that. In this article, we will explore how you can earn interest on your free cash on the platform and the calculation process involved. Let's dive in!


Interest on Free Cash
We want to make sure you're fully informed about how your interest is calculated. In simpler terms, the term "accrual" refers to the gradual accumulation of interest over time. So every day, we calculate the amount of interest you've earned based on the applicable yearly rate. We also consider the accrual of the Cash Management Fee expense. You will only earn interest on the balance of daily free cash sitting in your account.

Here's the exciting part
On the first Business Day of the following month, we add up all the interest that has accumulated over the month and credit it to your account. We're all about transparency and making sure you know exactly where your money is going. Based on the South African Revenue Bank Prime interest rate, the interest rate applied to your free cash balance will vary. As of 26 May 2023, the prime interest rate is 11.75%. The following table illustrates the calculation:

 

For example, you have R20,000 in your EasyEquities account. This means you have R20,000 of Free Cash available for earning interest. The daily interest earned on your Free Cash will depend on the applicable rate per annum (Prime rate minus 3.5%). Assuming you don't make any trades or changes in your account, let's see how it adds up!
Free Cash Daily Interest Monthly Interest
R20,000 R4.60 R138.00

Please note these numbers have been rounded to 2 decimal places for explanation purposes.


To calculate your monthly earnings, we will consider the daily interest rate and the number of days in the month. Let's say the daily interest rate for your R20,000 Free Cash is 0.023%. At the end of a 30-day month, your total interest earnings would be R138.003 (R4.60 x 30 days).

ZAR and TFSA Accounts
EasyEquities also extends its interest payment on Free Cash to both EasyEquities ZAR accounts and Tax-Free Savings Account (TFSA) accounts. The calculation process remains the same as mentioned above. It ensures that clients across various account types can benefit from earning interest on their available funds.
 
But here's the thing: EasyEquities currently doesn’t offer interest on Free Cash denominated in USD, AUD, EUR, or GBP. Sorry about that! But don't worry, this is in the pipeline and we are busy working on a solution to extend interest payments on USD Free Cash. We've got some other exciting opportunities for you.

ETFs and Unit Trusts
ETFs and Unit Trusts can also be a great way to earn income and protect against inflation. These products typically pay monthly or quarterly interest payments, which can be a helpful source of regular income.

Here is a list of all unit trusts that pay monthly dividends:

On the ETF side, you have the Global DivTrax from Coreshares by 10X (twice a year) and the Satrix DiviPlus (quarterly). The Coreshares by 10X Income Actively Managed fund also provides a quarterly payment and is the first actively managed ETF in South Africa.

Exploring Alternatives
While you won't earn interest on your non-ZAR Free Cash for now, you can still put those funds to work by investing in stocks, exchange-traded funds (ETFs), Unit Trusts or other investment options available on EasyEquities. That way, you have the potential to grow your wealth through market returns. So, even though you won't earn interest directly, you can still make some great gains!

In Summary
Earning interest with EasyEquities can be a valuable addition to your investment strategy. By simply keeping your funds in your EasyEquities account, you have the opportunity to earn interest on your Free Cash as well as your ZAR and TFSA wallets. Note that interest is currently not applicable on funds denominated in USD, AUD, EUR, or GBP. However, you can make the most of your investment journey by putting those non-ZAR funds into exciting investment opportunities.

Remember, the interest accrual happens daily, and at the beginning of the following month, the accumulated interest will be credited to your account. So, start making the most of your EasyEquities experience and enjoy the benefits of earning interest on your Free Cash. 

 

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Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by an employee of EasyEquities an authorised FSP (FSP no 22588) as general market commentary and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. First World Trader (Pty) Ltd t/a EasyEquities (“EasyEquities”) does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information (i) contained within this research and (ii) received from third party data providers. You must rely solely upon your own judgment in all aspects of your investment and/or trading decisions and all investments and/or trades are made at your own risk. EasyEquities (including any of their employees) will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.

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