How much float interest are we earning?
№ 106 · Float interest curve
Definition
MetricInterest earned on customer balances, annualised as a percentage of average balances
Unit% annualised yield on average customer balances
Single line of interest income from customer balances over time. Pull average balance times prevailing rate. In low-rate environments this collapses to near zero. Strong reason to focus on alternative revenue streams. Example: $42M balance times 4.8% rate = $2M annualized.
Benchmarks
| Bottom 30% | Median | Top 30% |
|---|---|---|
| Below 1.5% annualised, typically euro-heavy books or balances left in commercial bank accounts paying near the 0.52% euro overnight corporate deposit rate | 2.0% to 3.0% annualised across a mixed-currency balance book in the 2025 to 2026 rate environment | 3.0% or above annualised on a GBP or USD weighted balance book, which is most of the relevant overnight policy rate reaching the P&L |
Interest income on customer balances (float) divided by average customer balances, annualised. Rate environment as at the first quarter of 2026: ECB deposit facility at 2.00%, euro overnight corporate deposit rates at 0.52%, euro corporate term deposits up to one year at 1.90%. · Very few fintechs disclose float yield directly, so the top30 anchor is computed rather than reported: Wise disclosed GBP 297m of interest income in the six months to September 2025 against nearly GBP 20bn held in Wise Accounts, which annualises to roughly 2.9%. Treat that as one worked example, not a survey median. The dominant variable is currency, not skill. A euro-denominated book cannot earn what a sterling or dollar book earns in the same period, and the gap between the ECB deposit facility at 2.00% and the 0.52% paid on overnight corporate deposits shows how much yield is lost simply by leaving balances with a commercial bank rather than accessing the policy rate. Regulatory treatment also binds: e-money safeguarding rules in several jurisdictions restrict which instruments float can sit in, which caps the achievable yield independently of treasury skill.
Category split omitted: Float yield by currency or by safeguarding regime is not published by two independent Tier 1 or Tier 2 sources on a comparable basis; only single-company disclosures and central bank policy rates are available.
When it looks bad
The float income line stays flat while the balances line climbs, so the two diverge and the implied yield curve slopes down, meaning new balances are being added at a lower marginal yield than the existing book earns.
Customer balances grow from EUR 180m to EUR 310m over four quarters while interest income holds at about EUR 900k per quarter. Implied yield falls from 2.0% to 1.16%, and the extra EUR 130m is earning roughly 0.3%.
What to do about it
- Ladder the stable portion of the balance book into instruments that access the policy rate rather than the commercial overnight rate. The gap between the ECB deposit facility at 2.00% and the 0.52% paid on euro overnight corporate deposits is roughly 148 bps on whatever share of balances is genuinely stable (ECB, February 2026).
- Measure the balance book's behavioural stability before extending duration, and size the laddered tranche off the observed trough rather than the average. Getting this wrong converts a yield gain into a liquidity event, which is a materially worse outcome than the yield forgone.
- Report float yield as a separate line from float income, because rising income on rising balances hides a falling marginal yield. Wise disclosed GBP 297m of interest income in H1 FY26 while flagging it as marginally lower year on year despite balances growing 37%, which is exactly the pattern this chart should surface (Wise plc H1 FY26).
- Model the downside case explicitly. Float income is a rate bet the business did not choose to make, and a 200 bp policy move takes roughly two thirds off the top30 yield, so any plan that depends on float should carry a rate-down scenario alongside it.
Sources
- Wise plc Balances held in the Wise Account generated GBP 297m of interest income in H1 FY26, against nearly GBP 20bn held in Wise Accounts plus GBP 5.6bn in Assets. wise.com ↗
- Wise plc Average cross-border take rate of 58 bps in FY2025, down 9 bps year on year as pricing cuts were funded by efficiency gains. wise.com ↗
- Spark Chime reported 9.5m active members at an ARPU of USD 257 on FY2025 revenue of USD 2.19bn; Monzo posted FY2025 revenue of GBP 1.2bn across 12.2m customers; Revolut customer balances rose 66% to USD 67.5bn. spark.money ↗
- European Central Bank The deposit facility rate is the instrument through which the Governing Council steers the monetary policy stance, and is the reference for overnight euro balances. ecb.europa.eu ↗
- European Central Bank Overnight corporate deposit rates stood at 0.52% in February 2026, against 1.90% for corporate term deposits of up to one year. ecb.europa.eu ↗
- Trading Economics, from European Central Bank data The ECB deposit facility rate was held at 2.00% through the March 2026 decision, against a 1999 to 2026 average of 1.27%. tradingeconomics.com ↗
- Federal Deposit Insurance Corporation Industry net interest margin improved to 3.39% in Q4 2025, with loan growth accelerating to 5.9% year on year. fdic.gov ↗
- Federal Deposit Insurance Corporation Industry NIM rose 9 bps to 3.34% in Q3 2025, above the pre-pandemic average of 3.25%, and increased across every asset-size cohort. fdic.gov ↗