As of October 1st, 2025, Lightyear stopped paying interest on uninvested cash:
However, it offers investment in Money Market Funds (MMFs), and rates can go up to 1.91% in EUR, 4.18% in USD and 4.07% in GBP (as of October 2025).
In simple terms, Lightyear would pay you interest just for having money in your account (called “uninvested cash”). As of October 1st, 2025, you must actively invest in an MMF to earn interest on your cash. Therefore, it employs a different mechanism but yields similar results.
How are these rates defined? Is my money protected? Is there any catch? Let’s dig in!
What are the Savings/Vaults? How does it work?
The Savings Vaults are a tool that helps invest in Money Market Funds (MMFs).
MMFs are funds that invest in low-risk, short-term debt securities, such as government bonds, and aim to maintain stable share prices.
Money market funds are widely used by institutional investors, such as pension funds, insurance funds, and banks. In Europe, 1.4 trillion euros are invested in those financial vehicles.
The MMF used by Lightyear for EUR cash is the BlackRock ICS Euro Liquidity Fund:
And, as of October 2025, it is paying 1.91% in EUR:
Do I pay any fee to invest in MMFs?
Yes, the rate shown above (1.91% APY) is what you get after the fee of 0.20%, compounded monthly over a year. The fund’s current 1-day yield is 2.09%.
2.09% – 0.20% fees = 1.89% (APR), which translates to an APY* of 1.91%:
*The APY, or Annual Percentage Yield, takes into account monthly compounding — any interest you earn, being reinvested and earning further interest.
Are the MMFs safe? What are the risks?
Yes. Your investment in any MMF is segregated from Lightyear accounts.
Nonetheless, if all appropriate safeguards fail, funds are ultimately protected by the Investor Protection Sectoral Fund only for amounts up to €20,000 across all your investments.
How can I start earning interest?
You need to search for the money market funds (MMFs) and invest in them, just like you would with a stock or ETF. If you search for “BlackRock ICS”, you will quickly find all three MMFs in EUR, USD and GBP:
Is the Lightyear MMF’s interest rate fixed or variable?
The interest rate paid is variable, influenced by the Central Bank’s decisions.
For example, the ECB Governing Council monetary policy holds 8 meetings per year (roughly every 6 weeks). These meetings serve to set the interest rates in the Euro Area, among other things. The participants are the ECB President, the ECB Vice President, the ECB Executive Board (4 members), and the heads of each of the national central banks of the Euro Area.
You can check all the scheduled meetings here.
So, if the ECB changes its policy by raising or lowering its key interest rates, the interest on MMFs will likely change in the same direction.
Are there any constraints?
No, but you should consider the following:
- There is no minimum or maximum amount to earn interest;
- You are free to use your money when needed (withdrawals or investments), and there are no interest penalties;
Do I have to pay taxes on MMF interest?
Yes, most likely. Except for special account types, like the ISA in the UK, taxes will be due on the interest you receive.
This article is intended for all Lightyear clients. We cannot analyse each country’s particularities separately or your personal circumstances, but you are almost certain to pay taxes. Please contact your tax authorities to determine what actions to take.
Are Savings/Vaults available in my country?
As per the Lightyear website:
“Lightyear Savings offers you to invest in money market funds (MMFs). It is available in Austria, Denmark, Estonia, Finland, France, Germany, Hungary, Italy, Latvia, Lithuania (EUR only), Luxembourg, Netherlands, Spain, Sweden and the UK – countries where these funds are registered locally by BlackRock. If available, you can see Savings in your Portfolio tab.”
Bottom line
All in all, Lightyear does not pay interest on uninvested cash, but you can work around that by investing in Savings/Vaults, which is a great way to park your money. Still, always remember that these are different products with different risks associated.
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Lightyear operates under the regulations of Estonia and the UK authorities. Lightyear Europe is directly regulated by the Estonian Financial Supervision Authority (EFSA) -4.1-1/31. In the UK, Lightyear UK Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA).
Do you have any feedback or doubts about this broker? Please consider reading our review and then contact us to share your experiences.
