How you can earn 'Interest' in multiple currencies
Inside Wise's "Interest"-earning money transfer feature
Global money transfer fintech Wise has launched a new feature in Australia that allows users to earn returns on their Australian and US dollar balances - a move already proving popular, with customers investing more than A$30 million during the beta phase.
The feature, called "Interest", enables personal and business users to earn competitive returns by opting to have their AUD or USD balances invested in low-risk, short-term government securities. In an Australian first among its peers, Wise has partnered with global asset manager Franklin Templeton to facilitate the offering.
At launch, the after-fee annualised return is 3.16% for Australian dollars and 3.25% for US dollars, with funds allocated to Franklin Templeton's Franklin Government Cash Fund and its US equivalent.
Levelling the playing field with banks
Traditionally, only banks - known as authorised deposit-taking institutions (ADIs) - could offer interest on deposits, as customers are technically lending their money to the bank, which uses it to make loans.
Wise, which operates as an electronic money services provider, isn't licensed to pay interest in the same way.
Instead, Wise's model invests customers' balances through a regulated fund manager, offering returns that mirror the cash rate, while still allowing users to withdraw funds on demand.
"We're taking the money from across all the customers who are using Interest and investing it in short-term government securities," says Josh Rout, portfolio manager and macro research, fixed income at Franklin Templeton.
Rouy notes that while all investments carry an element of risk, this fund is unique in that it's among the lowest levels of risk in the market.
In Australia, this means investing in Commonwealth government-issued securities, while in the US it involves US Treasury bills - both with maturities capped at 12 months.
"While you still do get fluctuations day-to-day, we're very aware of why people are using this product and that they want to access money at short notice. We're making sure it's as smooth a ride as we can possibly make it."
Who is it for?
Wise's APAC product lead Tim Cameron says the Interest feature is designed for globally mobile Australians, including travellers, digital nomads, small businesses, and expats managing finances across borders.
"We're approaching a big Easter weekend of travel. The winter exodus from southern states to Europe and Bali is about to start," says Cameron.
"The Australian dollar has crashed and travel money isn't going anywhere near as far. Interest helps solve real money management challenges - whether you're saving for a home, a freelancer paid in different currencies, or a small business managing international revenue."
For users like Dean, a Kiwi expat living in Australia, the feature is a practical solution for idle funds. "I've got a place back in New Zealand, so I move money fairly regularly," he said.
"I got a notification a few weeks ago saying 'Do you want to earn Interest?' I thought, why not? I always have money sitting there between transfers - now it's not just depreciating in value."
A competitive market
Wise's expansion of services comes amid increasing competition in the international money transfer space.
According to Visa's Money Travels: 2024 Digital Remittance Adoption report, 67% of Australians now use digital apps to send money overseas.
While traditional banks remain popular, with a 2023 Finder survey showing that 30% of users still rely on them, a growing number are switching to specialist providers.
Wise ranked third in that Finder survey with 19% market share, behind Western Union (22%) and the major banks. But since then, new digital challengers such as Airwallex, Revolut, and Remitly have gained traction.
Consumers are also increasingly cost-conscious. The ACCC has previously advised Australians to consider non-bank suppliers for international transfers, saying they're "often better priced" and that switching providers helps drive competition and lower fees.
Global ambitions
The launch of Interest in Australia follows similar offerings in other markets. In the US, Wise customers can access government bond funds via BlackRock, and in the UK through Morgan Stanley.
In the US, Wise also offers a Stocks product that invests in the iShares World Equity Index Fund - providing exposure to global tech giants such as Apple, Tesla and Microsoft. However, there are no plans yet to expand that option to Australian users.
Instead, the focus remains on helping customers extract more value from their international money management.
However, Cameron did say the fintech plans to expand Interest accounts beyond the US and Australian currencies.
"The reason Interest has resonated with other markets is that we don't require the financial gymnastics that banks require to pay interest; no honeymoon periods, no transactional thresholds or crazy criteria," says Cameron.
"It's just a simple set and forget product you can spend from it with the we offer flexibility that allows you to spend."
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