Lend & Earn: switch on ‘passive income’ in your app

New at Peaks: Lend & Earn. A smart way to earn a little extra, without any extra effort.

Passive income is income you earn without (directly) working for it. Lovely, isn’t it? With Peaks, you can now easily ‘switch on’ passive income in the app with Lend & Earn.

What is Lend & Earn?

With Lend & Earn, you put the investments you already have to work a bit harder by making them available to parties that want to borrow them. You earn interest on the investments you lend out. This can be as high as 2%, on top of the return your investments may already generate. So with Lend & Earn, you can genuinely earn something extra without having to do anything.

How it works

Switching on Lend & Earn is very simple – in principle, you just toggle the switch. The first time you do, we’ll guide you through the feature so you know what to expect. After that, you can just sit back.

Step 1. Open the app and go to the menu

Step 2. Tap ‘Lend & Earn’

Step 3. Tap 'Enable'

Step 4. Take the tour and accept the terms & conditions

Step 5. Congrats! You can now earn interest from lending out your investments

Your lent investments are protected

Lending investments is common in the financial world, where it’s referred to as ‘securities lending’. To protect investors, securities lending often comes with multiple safeguards. At Peaks, your lent investments are protected in several ways too:

1. We only accept creditworthy borrowers
   
   In other words: only borrowers with no known payment issues. We screen who is allowed to borrow investments in the first place.
2. We always require collateral
   
   If something happens and the borrower can’t meet their obligations, we can use the collateral to recover (the value of) your investments
3. Collateral is checked daily
   
   We check whether there’s enough collateral available to cover your lent investments. If there isn’t enough, borrowers must top it up.

Collateral explained simply

In the video, we explain step by step exactly how collateral works:

Risks of Lend & Earn

Although we take all kinds of measures to protect your lent investments, there are always risks associated with Lend & Earn. The two most important ones are:

Counterparty risk

The risk that the borrower becomes unable to pay back the borrowed amount. This can happen, for instance, if a borrower goes bankrupt.

Repurchase risk

If a borrower goes bankrupt, the borrower's collateral is used. If the collateral is worth less than your investments, there is a chance that you will recover fewer investments than you originally lent out.

You can find a full overview of the risks here.