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FlowBank is a new Swiss digital finance service that launched publicly late in 2020. They plan to have to be both a bank and also a full-fledged broker. So, you can have your money and your stocks at the same place.
FlowBank presents itself as an innovative digital bank platform that would bring cheaper trading to Switzerland. On paper, it sounds exciting. Currently, the investing features are ready, while the banking features are not yet all ready.
So, let’s see how good it is in this in-depth review.
FlowBank was started in 2020 by Charles-Henri Sabet. They officially started their public service in November 2020. FlowBank is an officially licensed bank from Switzerland. This license is an excellent thing since it means that we get Swiss banking protection. And it is interesting to note that they are the first bank to be licensed since 2009. They are already employing 90 people in Geneva.
FlowBank is trying to make online banking and online trading simpler and more accessible to everybody. They are offering a multi-currency bank account and a broker account.
Their vision is to be seriously simple, seriously banking, and seriously Swiss. I am not sure exactly what it means, but it is interesting nonetheless.
FlowBank offers customer service 24 hours a day and five days a week. It is excellent to note that this service is based in Switzerland. I have contacted their support several times to get information, and they have been very responsive.
At this time, the information about banking with them is not yet complete. Indeed, the offer itself is not yet ready. Here is what we can find about the banking features. You can hold several currencies and pay online with a virtual card. But the fees are very unclear about banking fees. My interpretation of the fees is such:
- Transferring money to your account is free
- Transferring money out of the account is not free
- Transferring CHF or EUR in Switzerland or Lichtenstein cost 2 CHF
- Transferring CHF outside of Switzerland cost at least 10 CHF
- Transferring EUR outside of Switzerland cost at least 10 CHF
These are costly fees for a bank. If you cannot get money out of the account for free, it is not an acceptable bank account. These fees make it only valid as a trading account since you do not want to get money out of it very often.
Currently, they have no physical card. But one physical is planned for the first quarter of 2021. And the website has no details either as to the fees of the physical card when it will come. So we will have to wait and see for that part.
I have talked to the FlowBank team about that, and they told me that currently, they want to focus on their trading this system. This is why the information on the website about banking is not complete, and neither is the pricing. So, we should expect prices for the banking features to change in the future.
However, the website contains a lot of information about their trading system. So, I will primarily focus on this aspect in this review.
As mentioned before, FlowBank offers many trading features. They have two different products:
- FlowBank App
- FlowBank Pro
FlowBank App is made for simple investors and beginner investors. It is only available on mobile. You can get an idea of the FlowBank app from their video:
Flow BankPro is focused on expert investors. FlowBank Pro is available in many flavors:
- Desktop application for Windows, Mac, and Linux
- Mobile application for Android and iOS
- Web application
It is excellent that we can trade from so many platforms with a single application.
You can trade in many instruments:
- Stocks, bonds, and Exchange Traded Funds (ETFs)
- Options and futures
- Contracts for Differences (CFDs)
That is a lot of instruments, but any good passive investors will ignore everything that is not Stocks, Bonds, or ETFs. I would especially advise against using CFDs.
You can buy and sell shares with the standard market, limit, and loss orders for the basic instruments. These orders are all we need to trade!
One interesting feature is the ability to trade in fractional shares. Most Swiss brokers do not allow this. It could be interesting if you want to buy shares of costly stocks. But this is not common for ETFs.
The application has many advanced features:
- Price alerts
- Advanced reporting
- Screeners for bonds
- Margin monitors
Overall, FlowBank has more than enough features for trading. They have apps for both simple investors and active investors. I think it is great that they are trying to be easy to use by beginners.
For passive investors, investing fees are very important. Therefore, we need to look at their fees.
There is no account management fee. However, there is a custody fee of 0.10%, with a maximum of 50 CHF per quarter. While 0.10% may seem like a lot, it will represent very little money for small portfolios. And with a maximum of 200 CHF per year, it will also be very little for large portfolios. This is a good custody fee compared to Swiss brokers. Therefore, I do not believe this custody fee will be an issue for most users.
Note that the custody fee will not apply to your banking assets, only to your trading assets (once they start their bank services).
The fees for stocks and ETFs are the same. These fees are different for each stock exchanges, for instance:
- SIX (Switzerland): 0.10% with a minimum of 6.50 CHF
- Euronext (Europe): 0.15 with a minimum of 6.50 EUR
- NYSE (USA): 0.15% with a minimum of 6.50 USD
The great thing here is that the minimums are low! These minimums mean you can trade in many ETFs with less than 7 CHF!
FlowBank supports many more stock exchanges with similar prices. You can read more on their pricing page.
For bonds, the commission will be 0.20% with a minimum of 50 CHF. It is not great. But most investors do not buy bonds directly anyway. Instead, they use bond ETFs that will be cheaper.
I will not go into detail about other instruments since I do not recommend you use them anyway. But we are also interested in Forex conversions.
Forex is relatively expensive as well, with a 0.5% conversion fee. If you want to buy an ETF in USD, you will have to pay 0.5% for the conversion and then pay the commission fee on top of this fee. For a Swiss broker, this is relatively cheap.
Overall, I think these fees are pretty good. For small operations, the small minimums make them very cheap. And large transactions should be OK with small percentages as well.
We can take a look at the security of FlowBank.
First, FlowBank is a licensed bank from FINMA, and they are a member of esisuisse (the Swiss deposit protection scheme). So, in case of bankruptcy, your cash is safe up to 100’000 CHF.
For your stocks, your investments should be segregated from FlowBank’s main entity. Every broker does this segregation. But I have not found any mention of it, not the website. While I am confident they are doing it, it would be better to document this on their website.
The applications of FlowBank seem technically secure. Creating an account requires uploading some official documents to verify your identity.
I have not found any information about leaks of data or security breaches with FlowBank. But given that they are very new, this does not weigh much in the balance.
Overall, the security of FlowBank seems alright. However, I wish they would talk more about it on the website.
FlowBank has some interesting advantages:
- Very cheap transactions costs
- Relatively cheap currency conversion fees
- They are a licensed bank, so your money is secure up to 100’000 CHF
- Very low custody fees for small portfolios
- Reasonable custody fees for large portfolios
- Allow trading in fractional shares
- Simple to get started with
- Can trade on many platforms
- They have a demo account to test the system
- Very responsive customer support
FlowBank has a few disadvantages:
- They are very new to the market
- We currently do not know enough about their bank offering
It is good to see new digital banks and new products aiming to make the Swiss market cheaper. And I believe it is also good to try to make investing more straightforward for people. Most Swiss people are not investing and could profit from a simple investing app.
As a broker account, FlowBank is really interesting. They have simple applications to trade that should make investors’ life simpler. They also have very low minimums that should allow starting trading without too high fees. On top of that, they have very reasonable custody fees.
I have not yet compared FlowBank to all other Swiss brokers, but I will soon. It seems to be me that FlowBank is a very serious contender against these other Swiss brokers. I think it is good to have some movements in this field.
If you want to start investing with a Swiss broker, FlowBank may be an interesting choice. If you need more options, you can look at my articles about the best Swiss Brokers. I will soon update it to include FlowBank.
In the future, FlowBank will offer banking features in addition to their investing features, but they currently only provide investing features. Once they do, I will review it again for their banking features and compare it with other banks.
If you do not mind using a foreign broker, I would still recommend using Interactive Brokers, as I do.
If you have tried FlowBank, I would be glad to hear your thoughts about them.