Some good news has just arrived for Revolut! Recently, I saw by luck that there was a Swiss IBAN available when adding money to the application. This is really great since that was missing from the start on the Revolut account.
And probably even bigger news for Revolut: they got a European Specialised Bank License! This is a big deal. Revolut is now officially a bank and will soon start offering new services. I have been using Revolut for about six months now and I really like it. I have saved some money by using their free currency exchange services. I am really interested to see how they are going to implement this banking license in the future. I would really like to have a cheap and good bank account in the future.
In this post, we are going to see what do these changes mean for me and other Revolut customers! If you do not know about Revolut, stay tuned!
Revolut is a kind of digital bank alternative. It is not yet a bank. But you can store money in any currency on your account. In theory, you could even use it to deposit your salary into it. But since they are not a bank, you have fewer guarantees on it.
The biggest advantage of the Revolut account is that you can convert currencies for free! Most credit cards will charge a hefty fee to convert currencies. For instance, my current credit card charges me 1.5% to do a transaction in a foreign currency. This is the main reason why I started using Revolut. I have already saved quite some money with Revolut and all of it is for free! Now I only use Revolut for my expenses in foreign currencies. I have been using it for almost six months and I am really happy about it!
If you want to transfer money to your Revolut account, there are several ways:
- Use a Debit Card (free)
- Use a Credit Card (fees)
- Transfer to a bank account (free)
The most convenient one is to transfer money from your bank account to Revolut IBAN. The main issue with Revolut before was that they did not have any Swiss IBAN. They had an IBAN from the UK on which you could pay with CHF. However, everytime you transfer money, you need to pay a small fee because Swiss banks do not provide free transfers to IBAN outside of Switzerland even if it is in CHF.
Until now, I was using a TransferWise account to make the transfer for free. In that case, I was transferring money to my TransferWise account from my bank. And from there, I was transferring money to my Revolut account. It was working quite well and was free. However, that means I had an account I did not use and a card I only used for some transfers.
Now, Revolut just got a CHF IBAN from the Credit Suisse! With this, I can transfer money directly into my Revolut account with a single bank transfer. And for free!
That means I do not need to use TransferWise anymore for now. This will simplify my money management!
Until now, Revolut was not a bank but simply a digital banking alternative. This has quite a few difference. For instance, Revolut could not offer you credit options and your money at Revolut was not insured.
However, this will soon change! Indeed, in December 2018, Revolut got a Specialised Bank License from the European Central Bank. They used the Bank of Lithuania as a facilitator in the proceedings. They are not yet a full-range bank since they only got Specialised Bank License. For instance, they cannot provide any investment services.
Nevertheless, this is great news and will soon benefit the users of Revolut. The biggest advantage will be that soon, money deposited on a Revolut account will be insured up to 100’000 EUR. This is guaranteed under the European Deposit Insurance Scheme (EDIS).
Another advantage, but less interesting in my opinion, is that they can offer your personal loans. You can also go negative in your bank account. This was not possible before. I do not think it is a great thing since you should not go negative anyway. But it remains to be seen how much interest will be billed on these loans.
For now, nothing changed. They are going to start with this new license in Lithuania for now. But then, they plan to extend in the other European countries. We probably will not see any change in Switzerland for at least a year. But eventually, it will come!
Overall, I believe this is great news for Revolut and for its customers.
All this is really great for both Revolut and its customers. For Swiss investors, that means that it will not be necessary to use TransferWise as an intermediary to transfer money for free to our Revolut account. This will simplify my money management routines. And it will also simplify my net worth routine since this means one less account.
And for all Revolut customers, it is great that Revolut will become a bank! For now, nothing changed yet. We will see in the future how they will implement this banking license. But I think next year will be a very interesting year for Revolut and its users. The only thing they are missing is a cashback credit card! But we can always use a credit card like the one from Migros and pay from a Revolut account.
I would not be surprised if, in a few years, Revolut becomes a serious alternative to Swiss banks. I had to change banks recently and it was quite a pain to do. Most Swiss banks are actually quite bad. If the money was insured in Revolut and we could have an account, I would probably change my main bank account for a Revolut account. We will see how they evolve in the future.
What do you think about this news? Do you already use Revolut?