Is that how it works though?
My impression is that the current interest would get boosted by 10%, meaning that if somebody had 4% interest and that interest amount gets boosted by 10%, meaning they would be getting 4.4% interest.
Maybe I'm wrong, and if somebody is getting 4% now and they get 14% after, then that would be another story, but that seems way too high to be realistic.
If it is option #1, then I wouldn't say that there is a big difference between 4% and 4.4% interest for example.
When your interest gets boosted by 10%, thanks to the premium membership, your annually interest will indeed be 4.4%. Not a major difference, but on a large amount, this will give you a nice extra.
In a lot of countries, you will not get 4% interest on your fixed deposits or other investments and it will also not be paid back on a daily basis.

Exactly, in Belgium, the interest in your bank account is around 0.11%

. So getting 4% is good and it is seems to be sustainable for freebitco.in also.
In Germany it's worse than that. Interests from bank account are negative now. You must pay the banks to hold your funds. One of my account is in a german bank and if my account balance excess 50 000€ I will have to pay -0.5% on the amount above that mark.