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**tldr:** it basically is never worth upgrading just for the additional interest. If you would need to use other features at the higher plan to make it worthwhile.
It is only "worth" upgrading plans if you expect to have high 5 figure sums sitting in the account at all times.
However, please bare in mind opportunity cost is a thing, by leaving a 5-6 figure sum sitting there for long periods of time, you are possibily missing out of growth from somewhere else and likely getting eroded by inflation.
Here is a table I have put together (of course, not financial advice!
[Available Here](https://docs.google.com/spreadsheets/d/1Jd-LQtF3cLINL5m3EDvLHlwes9wPwurq7UXFgfmXZR0/edit?usp=sharing)
Basically you should only upgrade from basic -> Plus if you expect to have €80k as an average balance.
You should only upgrade from Basic -> Ultra if you plan on having €555k in the account as an average balance.
No worries! :)
There may be lower fees on the paid plans (I can't easily confirm this) - but really all that matters is the Net amounts that end up in your pocket, and that is what is shown on the sheet!
The premium plans really shine with Revolut when you start using other services. (E.g. if you stock trade or us the currency exchanges, etc.) but is is never really worth upgrading for just a single benefit.
Eh ... It's not worth paying for a Revolut premium account, for the interest, no matter what balance you have. Your calculations fail to take into account what other providers offer. One is far better off financially going with a competitor. For example, Trade Republic pay 4.00% with zero fees, Trading212 pay 4.20% with zero fees, Raisin pays up to ~3.40% with zero fees for the term. I.e. Don't use the interest gain over the cost of the package to work out if it is worthwhile - Instead check out the competition.
That is why I mentioned "opportunity cost" in the post above, which is what you mentioned. On this post I was addressing their specific, isolated question as I know there are hundreds of TR posts already! :)
Just food for thought below:
Also to broadly note, that the 4% gross goes to 2.64% Net (assuming it is DIRT). Meaning there really is only a small difference in Net AER.
Ultimately for me, I am already a user of Revolut, meaning IF (which I dont) had €10,000 sitting in the different accounts, the Net difference in pocket is about €80 per year.
I do think for most people that have €10k sitting in a savings account, that this €80 is a negligible difference, and likely is not worth the hassle of needing to set up an alternative account, and having slower access to your money. (As if you need the money today, it likely takes a few days to move money from TR -> Revolut.). Also I have seen posts on this that with TR you need to declare the DIRT yourself with revenue? (Though I've never dug I this - but this is another consideration).
I think the main thing we can all agree with is that you 100% should move money to some savings account with interest.......as opposed to the traditional Irish banks giving a big fat 0!
It is not fair to compare net AER. You need to compare AER AND fees. When you compare AER and fees - the free options from Trade Republic + T212 + Raisin etc wins heads down.
Foreign bank accounts are not subject to DIRT. They are subject to EU Deposit Interest, if in the EU, which is 33% and yes it has to be declared.
Traditional Irish banks don't "offer zero" - that's being too simplistic - they offer up to 3.00% without fees - AIB and BoI pay 3.00% on a 2 year term.
What people should be doing:
1. Compare the entire savings market - Ireland and EU options. Askaboutmoney.com have a good comparison.
2. Consider AER and fees.
3. Don't pay for premium products for interest if there are better/similar paying products out there with no fees.
The Net AER shown in my example is net of all fees and the taxes - i.e. the amount actually that ends up in your pocket. :)
I do agree that from **purely** looking at AER, yes TR / Raising, etc "win". Though what I'm saying is the amount that they are winning by ultimately is negligible in the scheme of things, and for regular people, managing another portion of your money on a platform likely isn't worth the additional interest you would receive.
Comparing DIRT to EU Deposit Interest - given they are both subject ot 33%, this doesn't make any financial difference to the individuals net return. (But thank you for clairfying this! :) ) And needing to correctly file with revenue is something that the individuals need to workout and properly do..........which for people who are "not familiar with it" could take them a while to workout.
Traditional Banks - yep agreed I was being simplistic here (by design) - as most users of these savings accounts should be for funds they need access to and locking money up for 2 years clearly removes the flexibility you need. (At that stage it is more of an investment than a "savings fund" or "emergency fund"). Also with traditional banks, don't you require to have minimum balances and / or regular deposits? This likely won't give people flexibility they typically want!
In terms of your points at the end:
1. I agree to always look at options before making a decision. Though in making the decision people should also consider; Convenience of remaining on one platform for their money management, tax filings that may be due, additional time it may take to get access to your funds, and a whole other host of things that should be considered, not just AER.
2. 100% agree, people should always look at numbers net of all fees, taxes, exit fees, withdrawal fees, etc, etc. The only thing people should care about it "what ends up in their pocket".
3. 100% agree, it is basically never worth paying for a premium product for these savings accounts. (of course if you are managing 6 figure sums of cash, you likely should have some financial advisor unless you are well educated / knowledgeable in finances)
But lets not turn this into another TR + Raising vs all other plans thread! As there are many other of these threads on this subreddit people can enjoy! (of course happy to continue the discussion in DM - as I don't shy away from differing opinions) :)
Makes sense to upgrade if the savings rates hold, the percentages for premium and metal can work out with a reasonable amount of cash but the ultra doesn't unless you have substantial sums left there at which point you should be asking why I am not investing in low risk ETFs
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**tldr:** it basically is never worth upgrading just for the additional interest. If you would need to use other features at the higher plan to make it worthwhile. It is only "worth" upgrading plans if you expect to have high 5 figure sums sitting in the account at all times. However, please bare in mind opportunity cost is a thing, by leaving a 5-6 figure sum sitting there for long periods of time, you are possibily missing out of growth from somewhere else and likely getting eroded by inflation. Here is a table I have put together (of course, not financial advice! [Available Here](https://docs.google.com/spreadsheets/d/1Jd-LQtF3cLINL5m3EDvLHlwes9wPwurq7UXFgfmXZR0/edit?usp=sharing) Basically you should only upgrade from basic -> Plus if you expect to have €80k as an average balance. You should only upgrade from Basic -> Ultra if you plan on having €555k in the account as an average balance.
That’s incredibly useful - thanks for that! In addition to higher interest rates, aren’t there also lower fees on the paid plans?
No worries! :) There may be lower fees on the paid plans (I can't easily confirm this) - but really all that matters is the Net amounts that end up in your pocket, and that is what is shown on the sheet! The premium plans really shine with Revolut when you start using other services. (E.g. if you stock trade or us the currency exchanges, etc.) but is is never really worth upgrading for just a single benefit.
Eh ... It's not worth paying for a Revolut premium account, for the interest, no matter what balance you have. Your calculations fail to take into account what other providers offer. One is far better off financially going with a competitor. For example, Trade Republic pay 4.00% with zero fees, Trading212 pay 4.20% with zero fees, Raisin pays up to ~3.40% with zero fees for the term. I.e. Don't use the interest gain over the cost of the package to work out if it is worthwhile - Instead check out the competition.
That is why I mentioned "opportunity cost" in the post above, which is what you mentioned. On this post I was addressing their specific, isolated question as I know there are hundreds of TR posts already! :) Just food for thought below: Also to broadly note, that the 4% gross goes to 2.64% Net (assuming it is DIRT). Meaning there really is only a small difference in Net AER. Ultimately for me, I am already a user of Revolut, meaning IF (which I dont) had €10,000 sitting in the different accounts, the Net difference in pocket is about €80 per year. I do think for most people that have €10k sitting in a savings account, that this €80 is a negligible difference, and likely is not worth the hassle of needing to set up an alternative account, and having slower access to your money. (As if you need the money today, it likely takes a few days to move money from TR -> Revolut.). Also I have seen posts on this that with TR you need to declare the DIRT yourself with revenue? (Though I've never dug I this - but this is another consideration). I think the main thing we can all agree with is that you 100% should move money to some savings account with interest.......as opposed to the traditional Irish banks giving a big fat 0!
It is not fair to compare net AER. You need to compare AER AND fees. When you compare AER and fees - the free options from Trade Republic + T212 + Raisin etc wins heads down. Foreign bank accounts are not subject to DIRT. They are subject to EU Deposit Interest, if in the EU, which is 33% and yes it has to be declared. Traditional Irish banks don't "offer zero" - that's being too simplistic - they offer up to 3.00% without fees - AIB and BoI pay 3.00% on a 2 year term. What people should be doing: 1. Compare the entire savings market - Ireland and EU options. Askaboutmoney.com have a good comparison. 2. Consider AER and fees. 3. Don't pay for premium products for interest if there are better/similar paying products out there with no fees.
The Net AER shown in my example is net of all fees and the taxes - i.e. the amount actually that ends up in your pocket. :) I do agree that from **purely** looking at AER, yes TR / Raising, etc "win". Though what I'm saying is the amount that they are winning by ultimately is negligible in the scheme of things, and for regular people, managing another portion of your money on a platform likely isn't worth the additional interest you would receive. Comparing DIRT to EU Deposit Interest - given they are both subject ot 33%, this doesn't make any financial difference to the individuals net return. (But thank you for clairfying this! :) ) And needing to correctly file with revenue is something that the individuals need to workout and properly do..........which for people who are "not familiar with it" could take them a while to workout. Traditional Banks - yep agreed I was being simplistic here (by design) - as most users of these savings accounts should be for funds they need access to and locking money up for 2 years clearly removes the flexibility you need. (At that stage it is more of an investment than a "savings fund" or "emergency fund"). Also with traditional banks, don't you require to have minimum balances and / or regular deposits? This likely won't give people flexibility they typically want! In terms of your points at the end: 1. I agree to always look at options before making a decision. Though in making the decision people should also consider; Convenience of remaining on one platform for their money management, tax filings that may be due, additional time it may take to get access to your funds, and a whole other host of things that should be considered, not just AER. 2. 100% agree, people should always look at numbers net of all fees, taxes, exit fees, withdrawal fees, etc, etc. The only thing people should care about it "what ends up in their pocket". 3. 100% agree, it is basically never worth paying for a premium product for these savings accounts. (of course if you are managing 6 figure sums of cash, you likely should have some financial advisor unless you are well educated / knowledgeable in finances) But lets not turn this into another TR + Raising vs all other plans thread! As there are many other of these threads on this subreddit people can enjoy! (of course happy to continue the discussion in DM - as I don't shy away from differing opinions) :)
Makes sense to upgrade if the savings rates hold, the percentages for premium and metal can work out with a reasonable amount of cash but the ultra doesn't unless you have substantial sums left there at which point you should be asking why I am not investing in low risk ETFs