8 facts about the Peaks Interest account

Are you considering opening a Peaks Interest account?

If so, you may be asking yourself certain questions, about the benefits, risks and what type of investing the Peaks Interest account offers. In this article, we outline the differences between investing with our portfolios and with the Interest account, plus how it differs from a savings account you might open up with your bank.

1. What makes the Peaks Interest account different from a savings account?

How a savings account works

When you open a savings account with a bank, you enter into a direct relationship with that bank. You deposit your savings, and the bank uses these funds to issue mortgages and business loans. In return, the bank pays you interest on your savings. If you want to withdraw your money, the bank must have enough funds available to pay you the exact amount. If the bank fails to do so—due to bankruptcy, for example—you can rely on the deposit guarantee scheme, which protects savings up to €100,000.

How the Interest account works

The Peaks Interest account operates differently. It is not a savings account but an investment account: the money you deposit is invested in a money market fund, a specific type of index fund. The money in this fund is placed by Deutsche Bank with the European Central Bank, which pays daily interest to Deutsche Bank. This interest is then passed on to the fund, increasing its value. The interest rate the fund receives follows the European short-term interest rate (€STR), which is higher than most savings account interest rates.

The deposit guarantee scheme, which covers savings up to €100,000, does not apply to the Interest account. However, your investment in the money market fund is protected in a different way. The fund holds collateral in bonds equal to the total invested amount plus interest, ensuring protection in case Deutsche Bank were to fail. This effectively safeguards the value of your investments. You can read more about this collateral here.

Since the Peaks Interest account is an investment account, you may have to pay capital gains tax on it. More details on that can be found here.

2. How much risk am I taking when opening a Peaks Interest account?

Because the Peaks Interest account is an investment account, it comes with different costs and risks compared to a savings account. ‘Risk’ means that you could lose (a portion of) your investment. However, the risk level of the Peaks Interest account is assessed as low by the teh Dutch Financial Market Authority (AFM): a level 1 out of a potential 7.

3. When will I receive my interest?

Since the Peaks Interest account is not a savings account but an investment account where your earned interest is automatically reinvested, you won’t receive interest payouts at specific moments. If you want to cash out the returns from your Interest account, you can simply make a withdrawal from your Peaks app.

4. Can the value of my Interest account decrease?

The Peaks Interest account is an investment product, meaning there are always some inherent investment risks. As long as the interest rate remains positive, your balance should generally increase slightly each day—except on weekends and public holidays when stock markets are closed, and Peaks does not update the app. Occasionally, the fund’s value may fluctuate temporarily due to supply and demand in the market.

5. Can the interest rate turn negative?

While rare, the interest rate can become negative, as happened temporarily a few years ago. However, this does not happen overnight. The €STR rate is linked to the European Central Bank’s interest rates, and any changes are announced in advance. We will always keep you informed so you can decide whether to withdraw your money or transfer it to another Peaks account in time.

6. Why has my balance decreased?

On the first working day of the month, the value of your investments may drop slightly due to the deduction of variable costs. You can see the exact breakdown of these costs in your Interest account transaction overview.

7. Is my returns overview always up to date?

We update the Interest account dashboard once per day to give you an accurate view of your investment value. However, this update only occurs on working days.

8. What fees do I pay for the Peaks Interest account?

The Peaks Interest account is included in your subscription package, which comes with a fixed monthly fee of €1.99, €2.99, or €4.99, depending on the package you choose. You can open multiple accounts within your package, whether it’s another Interest account or an Investment account. Children's accounts and Pension accounts are currently only available for Netherlands residents but may be available soon.

The fund you invest in has an annual fee of 0.10%. Additionally, variable Peaks fees apply to your Interest account balance, ranging from 0.25% to 0.5% per year, depending on your package. These fund and variable Peaks fees are already deducted from the interest rates displayed on our website.

Depositing or withdrawing money from your Peaks Interest account comes with no transaction fees. However, you will pay a spread—the difference between the buying and selling price of the ETF on the market. This is a standard cost associated with investing, typically between 0.03% and 0.05%.

Note: The Peaks Interest account is not a savings account but an investment account. Investment accounts come with different costs and risks compared to savings accounts. You could lose (a portion of) your investment.