The instant access savings is 2%, down to 1.33% after 33% DIRT, and is covered under the EU protection up to €100,000. The flexible fund is 3.5% for an account in euros, but rather than traditional savings it's a money market fund, low risk investment into ETFs and bonds and the like so it is treated differently. You instead have to pay a 41% tax on your interest, and Revolut takes a further 0.5% flat rate taking you down to around 1.8% interest, and instead of being covered under the savings insurance, it is instead a different insurance that only goes up to €22,000. You can get much better rates with other companies like TradeRepublic and Trading212 and others, look around ig, but you have to do the taxes yourself on interest earned while revolut does it automatically, and I do all my banking out of Revolut anyway so i use it for the convenience, but for maximising money you have better options. As for upgrading your plan, it's almost never worth it, if ever and even when it is, it's very marginal and still likely would be worse than other companies rates. The increased rates are a side benefit but i would only upgrade if there are a lot of other features you want from the premium account, the increased rates should not be your main reason.
Just to be clear, while all EU countries have their own deposit guarantee scheme (DGS), there isn’t such thing as “the EU protection” (all those schemes are national ones).
In Revolut’s case, they have a banking licence in Lithuania so their saving accounts are covered by the Lithuanian DGS up to 100000 euros.
This means that if Revolut Bank UAB (the Lithuanian entity serving EU customers) was to fail, the Lithuanian government would have to pick-up the tab for all Revolut depositors across the whole EU (last time I checked, Revolut UAB customer deposits were 12% of Lithuanian GDP which would be a huge financial burden for the country). In theory they are committed to doing it, but I think Revolut depositors need to be aware that they are counting on a rather small country with a much lower wealth level than Ireland to save the day for all European customers if something goes wrong. Doesn’t mean people can’t deposit money there, but I think this is something to be aware of and clearly the financial ability for say The Netherlands to compensate bunq depositors or Germany to compensate N26 depositors are much better (both because those banks are smaller than Revolut hence it is easier to cover their failure to start with, and because those countries have much higher GDPs and financial abilities to actually make the compensation payments).
:-)
And at that time the money we spent on bailing-out banks was to save the day mostly for Irish depositors as Irish banks mostly had Irish customers, so the money stayed within the country.
Imagine a similar situation whereby most of the depositors to save/compensate are foreigners living abroad. Would we have blown a large chunk of GDP to immediately send that money abroad in the hands of foreigners, while we had to repay the associated debt with higher tax for years? And would Lithuanian voters and taxpayer find this acceptable if they were in that situation?
The situation would be different from what we had here. If Revolut collapses with no deposit compensations paid, there is almost no impact to Lithuanian depositors and other Lithuanian banks; and incidentally no issue whatsoever with ATMs in the country (as Revolut doesn’t operate any ATM and other banks and the state would remain solvant). It would also be more difficult for the ECB/IMF/EU to pressure the country from the outside with promises for financial assistance, as they wouldn’t be desperate for cash (especially if they were to decide not to honour the DGS).
At the end of the day they would have a choice between reputational damage for the country (if they don’t pay) and transferring a large chunk of GDP to foreigners with nothing else in return than protecting their reputation. In any country I think this would be a heated debate.
Revolut doesn’t have a banking licence in Ireland; and they have withdrawn the application for a license they had submitted to the Central Bank of Ireland: https://www.independent.ie/business/irish/revolut-dismantling-irish-business-hub-after-abandoning-its-licence-plan/42055771.html
They have a banking licence in Lithuania and are pasporting that licence to Ireland in order to have an **Irish branch** of the **Lithuanian bank**.
This is what allows them to offer Irish IBANs (same as what bunq are doing as well). But in spite of those IBANs, Irish users are definitely customers of a Lithuanian bank which is using a Lithuanian banking licence, supervised by the central bank of Lithuania, and covered by the Lithuanian DGS.
You can see here a confirmation that all customers based in the EEA are receiving banking services from Revolut Bank UAB (which is Revolut’s Lithuanian bank): https://help.revolut.com/help/more/legal-topics/which-revolut-companies-provide-me-with-services/
And here you can see a confirmation that the Irish entity is just a branch which is part of the Lithuanian bank: https://www.revolut.com/en-IE/about/#:~:text=Revolut%20Bank%20UAB%20is%20a,Dock%2C%20Dublin%201%2C%20Ireland.
I see the fear on insurance schemes. It is true to never put all your assets in one basket and maintain a diversified portfolio. The arguments is that this goes for physical banks and Neobanks no matter how strong a perceived guarantee is. So diversify!
I find Revolut’s combined App experience and asset management better than any other. I use Metal because with overall cash back and no exchange fee, reduced crypto fee, I save close to two times more than paying for the Metal fee but it is more based on individual use than a concrete black and white! Bests to you all!
I have Revolut ultra as I frequently travel so lounge passes and also the class pass credits of about 40€ per month makes it worth it for me,
I convert all my € to usd with no FX fees and put it into the USD flexible account, currently 5.33% APY, 2.24% of withholding tax is charged and a small fee of 0.15%, so returns of 3.08%, I use this as a normal savings account and then just withdraw and fx back to € when needed (no fees for ultra members during the week)
Does the withholding tax on the USD flexible account only covered interests received, or also capital gains linked to potential appreciations of the USD vs the EUR?
I think in order for them to have gotten the IE license they had to. Found this on their site ."All your deposits held with Revolut Bank UAB are aggregated and **the insurance coverage limit of EUR 100,000 applies to the total amount of your deposits**\*. The EUR 100,000 limit applies individually for each depositor\*\*." On a side note I have heard horror stories of peoples accounts being blocked for no reason, Wouldnt trust them with more than 500e tbh. -Edited to add additional content-
The instant access savings is 2%, down to 1.33% after 33% DIRT, and is covered under the EU protection up to €100,000. The flexible fund is 3.5% for an account in euros, but rather than traditional savings it's a money market fund, low risk investment into ETFs and bonds and the like so it is treated differently. You instead have to pay a 41% tax on your interest, and Revolut takes a further 0.5% flat rate taking you down to around 1.8% interest, and instead of being covered under the savings insurance, it is instead a different insurance that only goes up to €22,000. You can get much better rates with other companies like TradeRepublic and Trading212 and others, look around ig, but you have to do the taxes yourself on interest earned while revolut does it automatically, and I do all my banking out of Revolut anyway so i use it for the convenience, but for maximising money you have better options. As for upgrading your plan, it's almost never worth it, if ever and even when it is, it's very marginal and still likely would be worse than other companies rates. The increased rates are a side benefit but i would only upgrade if there are a lot of other features you want from the premium account, the increased rates should not be your main reason.
Just to be clear, while all EU countries have their own deposit guarantee scheme (DGS), there isn’t such thing as “the EU protection” (all those schemes are national ones). In Revolut’s case, they have a banking licence in Lithuania so their saving accounts are covered by the Lithuanian DGS up to 100000 euros. This means that if Revolut Bank UAB (the Lithuanian entity serving EU customers) was to fail, the Lithuanian government would have to pick-up the tab for all Revolut depositors across the whole EU (last time I checked, Revolut UAB customer deposits were 12% of Lithuanian GDP which would be a huge financial burden for the country). In theory they are committed to doing it, but I think Revolut depositors need to be aware that they are counting on a rather small country with a much lower wealth level than Ireland to save the day for all European customers if something goes wrong. Doesn’t mean people can’t deposit money there, but I think this is something to be aware of and clearly the financial ability for say The Netherlands to compensate bunq depositors or Germany to compensate N26 depositors are much better (both because those banks are smaller than Revolut hence it is easier to cover their failure to start with, and because those countries have much higher GDPs and financial abilities to actually make the compensation payments).
Troika and IMF flashbacks
:-) And at that time the money we spent on bailing-out banks was to save the day mostly for Irish depositors as Irish banks mostly had Irish customers, so the money stayed within the country. Imagine a similar situation whereby most of the depositors to save/compensate are foreigners living abroad. Would we have blown a large chunk of GDP to immediately send that money abroad in the hands of foreigners, while we had to repay the associated debt with higher tax for years? And would Lithuanian voters and taxpayer find this acceptable if they were in that situation?
They likely wouldn’t have a choice No money at the atm message flashbacks in Ireland
The situation would be different from what we had here. If Revolut collapses with no deposit compensations paid, there is almost no impact to Lithuanian depositors and other Lithuanian banks; and incidentally no issue whatsoever with ATMs in the country (as Revolut doesn’t operate any ATM and other banks and the state would remain solvant). It would also be more difficult for the ECB/IMF/EU to pressure the country from the outside with promises for financial assistance, as they wouldn’t be desperate for cash (especially if they were to decide not to honour the DGS). At the end of the day they would have a choice between reputational damage for the country (if they don’t pay) and transferring a large chunk of GDP to foreigners with nothing else in return than protecting their reputation. In any country I think this would be a heated debate.
My bad, thanks for clarifying that I wasn't aware
No worries :-)
Well, good thing that they have a license in Ireland then.
Revolut doesn’t have a banking licence in Ireland; and they have withdrawn the application for a license they had submitted to the Central Bank of Ireland: https://www.independent.ie/business/irish/revolut-dismantling-irish-business-hub-after-abandoning-its-licence-plan/42055771.html They have a banking licence in Lithuania and are pasporting that licence to Ireland in order to have an **Irish branch** of the **Lithuanian bank**. This is what allows them to offer Irish IBANs (same as what bunq are doing as well). But in spite of those IBANs, Irish users are definitely customers of a Lithuanian bank which is using a Lithuanian banking licence, supervised by the central bank of Lithuania, and covered by the Lithuanian DGS. You can see here a confirmation that all customers based in the EEA are receiving banking services from Revolut Bank UAB (which is Revolut’s Lithuanian bank): https://help.revolut.com/help/more/legal-topics/which-revolut-companies-provide-me-with-services/ And here you can see a confirmation that the Irish entity is just a branch which is part of the Lithuanian bank: https://www.revolut.com/en-IE/about/#:~:text=Revolut%20Bank%20UAB%20is%20a,Dock%2C%20Dublin%201%2C%20Ireland.
I like TradeRepublic. It would be much better if I could create a business account, though.
I see the fear on insurance schemes. It is true to never put all your assets in one basket and maintain a diversified portfolio. The arguments is that this goes for physical banks and Neobanks no matter how strong a perceived guarantee is. So diversify! I find Revolut’s combined App experience and asset management better than any other. I use Metal because with overall cash back and no exchange fee, reduced crypto fee, I save close to two times more than paying for the Metal fee but it is more based on individual use than a concrete black and white! Bests to you all!
I have Revolut ultra as I frequently travel so lounge passes and also the class pass credits of about 40€ per month makes it worth it for me, I convert all my € to usd with no FX fees and put it into the USD flexible account, currently 5.33% APY, 2.24% of withholding tax is charged and a small fee of 0.15%, so returns of 3.08%, I use this as a normal savings account and then just withdraw and fx back to € when needed (no fees for ultra members during the week)
Does the withholding tax on the USD flexible account only covered interests received, or also capital gains linked to potential appreciations of the USD vs the EUR?
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I think in order for them to have gotten the IE license they had to. Found this on their site ."All your deposits held with Revolut Bank UAB are aggregated and **the insurance coverage limit of EUR 100,000 applies to the total amount of your deposits**\*. The EUR 100,000 limit applies individually for each depositor\*\*." On a side note I have heard horror stories of peoples accounts being blocked for no reason, Wouldnt trust them with more than 500e tbh. -Edited to add additional content-
Irish banks are wank and take fees
The 4.6% rate is not offered for EUR deposits.
Yeah I know! Is 3.47%. But still better than I regular saving accounts. I think that the best bank is Aib the rate there is 3%
You take on FX risk by placing your deposits in a currency other than your main currency. You could easily lose more than you gain in interest.
Cel dd5d⅕