Raisin Bank looks to bring market-beating deposit rates

Raisin Bank is eyeing up a launch in Ireland at the end of this month, looking to capture a slice of the €100 billion Irish deposits market by offering market-beating rates to weary Irish savers.

The German bank, which operates a pan-European deposits platform, is set to follow in the footsteps of other European fintech start-ups by moving into Ireland on a digital-only basis.

The platform, which acts as a marketplace for deposit rates and allows savers to shop around a host of European banks for the best rates, is hoping to launch in Ireland by the end of September.

According to Alejandro McCormack, country head for Ireland, Raisin expects to launch its Irish platform, www.raisin.ie, with three/four partner banks initially, with an expectation of ramping up the number of banks on the platform thereafter.

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Rates on offer are expected to be between 0.3 per cent and 1.35 per cent AER, which could be a compelling proposition for Irish savers given that retail rates here are among the lowest in Europe.

“We will be looking to come in with the strongest rate, and the strongest rate over different maturities,” he said.

Figures from the Competition and Consumer Protection Commission (CCPC), for example, show that the best rate currently on offer for an instant access account is just 0.15 per cent, or 0.6 per cent over 12 months if you also hold a current account with KBC Bank, or 0.35 per cent if you don’t.

Achieving an annual rate of 1 per cent then could boost a saver’s income from just €35-€60 a year on a €10,000 lump sum to €100.

Benedikt Voller, head of Europe with Raisin, said that the Irish market appeared particularly attractive to its partner banks because it was "pretty much untouched by foreign competition".

Home market

This means that foreign banks see an opportunity to come into the Irish market and offer deposits at rates which may be less than they offer in their home market but are still more attractive to Irish savers than current rates.

Raisin is expected to accept lump sums from €2,000 to €5,000, depending on the partner bank, up to a maximum of €100,000.

Savings will be protected by the relevant deposit guarantee scheme in the bank's country of origin, which have been harmonised across the European Union at €100,000.

Mr McCormack expects euro zone banks to launch on raisin.ie, which means there will be no currency risk for savers. When it comes to tax on deposit interest, which is set to fall to 33 per cent next year, Irish savers will have to declare this to the Irish Revenue.

Down the line regular savings and corporate deposits could be rolled out in Ireland.

Since its launch in 2013, the Raisin platform has accumulated some €15 billion in deposits, and currently works with more than 80 partner banks across Europe, including the UK, and some 200,000 customers.

These banks include the German GEFA Bank, which is part of Société Générale; J&T Banka from the Czech Republic; and the Austrian Anglo-Austrian Bank. AIB also offers deposits to German savers through Raisin's German marketplace, weltsparen.de

Central Bank rules

While the platform initially launched in the Republic back in 2016 it is understood that it soon fell foul of Central Bank rules, with the regulator stopping its entry into Ireland on the grounds that it needed a licence under the Investment Intermediaries Act to operate here.

However, earlier this year the PayPal and Goldman Sachs-backed marketplace for deposits acquired the German regulated MHB Bank, later renaming it Raisin Bank.

This banking licence allows it to passport its services across the European Economic Area, including Ireland.