Introducing Squirrel's high-interest On-Call account: What you need to know

(Article originally published 24^th January, 2023; updated on 30^th March, 2023)

We’re stoked to have unveiled a pretty major enhancement to our peer-to-peer term investment platform – with the introduction of interest on our Squirrel On-Call account!

The account currently offers “no strings attached” returns of 4.00% per annum* – which, just quietly, is one of the best interest rates on offer with any equivalent savings account available in New Zealand.

What does “no strings attached” mean? Well, as long as you’ve got money in your Squirrel On-Call account, you’ll earn those great returns no matter what. You won’t get penalised if you don’t make a deposit during the month, and you can make withdrawals whenever it suits.

In other words, unlike a lot of other higher-interest savings accounts out there (not naming names), there are no rules to trip you up and cost you interest or incur extra fees.

It’s a move we've made as part of our mission to level the playing field for Kiwi savers and investors, who have been forced to put up with stingy returns on their savings for too long.

Here’s what our Chief Squirrel, David Cunningham, had to say about it:

“Recent data from the Reserve Bank shows that there’s about $78 billion of Kiwi savings in accounts earning an average of 2.64% returns per annum. That’s a lot of money sitting there doing next to nothing for the people who have worked so hard to save it.

“Over the last 12 or so months, we’ve all watched as the Official Cash Rate (OCR) has just gone up and up…and up. Mortgage rates have followed suit, of course, and so the question we’re asking – and encouraging Kiwi to be asking as well – is why haven’t savers benefited in quite the same way?

“We’re here to challenge that.”

So, what else do you need to know about Squirrel’s new high-interest On-Call account?

The Squirrel On-Call account is the key to unlocking your investment activity with us, now with the sweet new added benefit of paying a great interest rate on any funds you’ve got saved there.

When you deposit money to Squirrel, it lands directly in your On-Call Account for you to invest as you like on our peer-to-peer investment platform. 

(And just to be clear, you can still have a Squirrel On-Call account whether you intend to invest with us or not.)

1. The money you have in your Squirrel On-Call account is held on trust for you.

It’s your money – Squirrel simply acts as custodian of those funds, helping to manage them on your behalf. We won’t do anything with that money other than follow the instructions you give us whenever you want to make an investment or deposit, or request a withdrawal.

2. Having your money in a Squirrel On-Call account carries the same level of risk as having it in a regular bank account.

The money in your Squirrel On-Call account is held on trust for you in a bank account with a major New Zealand trading bank. The funds aren’t invested anywhere else unless you instruct us to do so, using our P2P platform.  

Our Reserve Bank exists to manage levels of bank risk, and it does a pretty thorough job of regulating and monitoring the banks to make sure they’re in good financial shape – including by stress testing the impact of rapidly rising interest rates and unemployment, along with house prices falling 40%.

The RBNZ produces its financial stability report twice a year, which is a worthwhile read if you’re keen to find out more.

3. We calculate interest earned daily, and pay it back into your On-Call account on a monthly basis.

You’ll earn interest on your total On-Call account balance, which includes both unallocated cash and any unfilled investment orders. We’ll also deduct Resident Withholding Tax (RWT) on your behalf and pay that off to IRD for you.

The interest rate you earn on your On-Call account is variable and can change regularly. Broadly speaking, the rate of return will track up and down with short-term interest rates determined by changes in the Official Cash Rate (OCR).

We list all our interest rates, including the current On-Call account interest rate,  on our website.

4. You can withdraw funds from your On-Call account at any time.

If you make your withdrawal during a normal business day (between 9:00am and 10:00pm) the funds should be back in your nominated bank account in less than two hours.

In May 2023, we’re expecting a few changes to the way bank payments work, to start allowing payments during weekends and public holidays. That means you’ll be able to get money back into your bank account any day of the week, between the hours of 9:00am and 10:00pm.

We don’t charge any fees when you deposit or withdraw your funds and there are no monthly charges – it’s a free account for you.

5. And there are a few other tips and features worth knowing about, which we’ve designed to help make things super simple.

Squirrel is set up as a registered payee with all the banks

Once you've registered for an account with us, and been verified by our team, you can start depositing funds into your On-Call account. 

When you're ready to make your first deposit, you can search for us as a registered payee in your bank’s internet or mobile banking payments system.

There are usually two options listed – ‘Squirrel Borrower’ and ‘Squirrel Investor’. Make sure you select the ‘Investor’ template, add in the other information we need from you (like your unique reference), and you’re set.

If you make your deposit on a business day, between the hours of 9:00am – 10:00pm, you can usually expect it to show up within your Squirrel On-Call account within about two hours.

Getting your money out of your On-Call account is easy too.

Requests are collated every 30 minutes, and when you make a withdrawal from your On-call account on a regular business day, you can expect your money to be back into your nominated bank account within 2 hours.

We’ve also built some handy Auto-Withdrawal features that you can turn on if you’re wanting to take money out on a regular basis.

If you’d like to invest alongside your savings, you don’t have to lift a finger - with the option of Auto-Reinvest.

If you’re going to be regularly investing new money with Squirrel, you can take all the admin out by setting up an automatic payment from your bank account, then turning on Auto-Reinvest.

When you turn Auto-Reinvest on, we’ll check your On-Call account balance at 9:00pm every day, and if you’ve got more than $100 in there, will automatically invest those funds into your preferred investment type.  

(If you’ve got Auto-Reinvest turned on, make sure you’re only using your On-Call account to hold funds that you want to invest.)

We have a large number of investors doing exactly this as part of their regular saving activity, to make sure their money is always working as hard as possible.

Want more info?

There's plenty available on our website if you’re keen to keep reading up on Squirrel’s new On-Call account, or about investing on our peer-to-peer term investment platform in general.

* Interest on the Squirrel on-call account launched on 24^th January 2023, at a rate of 3.50% p.a.

The opinions expressed in this article should not be taken as financial advice, or a recommendation of any financial product. Squirrel shall not be liable or responsible for any information, omissions, or errors present. Any commentary provided are the personal views of the author and are not necessarily representative of the views and opinions of Squirrel. We recommend seeking professional investment and/or mortgage advice before taking any action.

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