If you want to earn more interest on your savings, it pays to shop around. Raisin Bank is an online marketplace that allows users to access and manage savings accounts from various banks across Europe.
Rather than limit ourselves to our local domestic banks, it means savers here can use it to access possibly higher interest rate savings products abroad.
“We connect savers with banks across Europe,” says Eoghan O’Hara, Raisin’s Ireland country head. “If you’re in Ireland or another country we operate in, you can easily access savings accounts from banks across Europe, without the hassle of opening a current account.”
“At Raisin, we empower consumers to make better financial choices by giving them real alternatives to the status quo,” says Eoghan O’Hara. “We offer an easy way to grow your savings without the hassle of switching your current account or changing where your salary is paid.”
Raisin’s platform features 27 banks from across Europe, offering around 130 savings products – from overnight accounts to fixed terms ranging from three months to five years.
“It’s about giving people choice and flexibility to structure their savings in a way that suits them,” O’Hara explains. “Especially now, with European Central Bank rates falling, it’s more important than ever to make sure your money is working harder. Our partner banks have consistently offered competitive rates, regardless of what the ECB is doing.”
Raisin Bank does not offer credit products or lending, only savings.
It’s a topic too many of us give too little thought to, he reckons. Recent research from the Central Bank backs this up. It found that almost 90 per cent of deposits here are in “overnight” or current accounts, compared with 55 per cent in the euro area. That’s a situation that costs Irish households an estimated €800 million in lost interest. It’s a big cultural difference which could be impacting our long term financial health.
“If you look at the European average, 55 per cent of their savings are in an interest bearing account. In Ireland it’s just 10 per cent,” says O’Hara. “It could be just a lack of awareness of the products available to them, or people not taking the time to actually sit down and think about their finances. From what we see, Irish people like to have their money to hand, even if they don’t necessarily need to have it to hand.”
Split your savings
It’s better to think about how much you need immediately and put the rest into an interest bearing account.
“Of course, keep money you are definitely going to need and an emergency fund in your current account or a demand deposit account. But use a ladder strategy for the rest. That might mean putting another chunk of your savings into a three-month savings account that you are getting interest on at a fixed rate. And then, for the money you can really live without – your nest egg – why not put that away for three, four or five years and make a guaranteed return on it?” says O’Hara.
With targeted inflation at two per cent, keeping savings in your current account means its value is simply being eroded.
With all Raisin Bank fixed rate deposits savers get an initial 14-day cooling off period, in case you change your mind. After that, you will incur a penalty for breaking a fixed rate agreement. “Each of our banks have their own policies on that,” he says, another reason to shop around.
Your one Raisin Bank account gives you access to all 27 banks on the platform, which makes it very simple to use.
Each customer gets their own German Iban, reflecting the fact that Raisin is a German bank.
“Customers can transfer their funds from whatever Irish bank they are with, into their Raisin account, and from there choose which bank they’d like to save with. We go through the signing up process with them once, which then lets them shop around and have access to all the various products on the platform,” he explains.
‘There are no fees to customers at any point. The interest rate you see advertised is the interest rate you get and those rates are set by the banks, not by Raisin’
“We then cap investment with any one bank in line with the deposit guarantee schemes, which is €100,000 per deposit, per bank, in all EU and European Economic Area states, the exact same protections as in Ireland,” he adds.
“If you have €100,000 with one bank, we won’t let you go above that. But if you’re lucky enough to have more money than that, we can let you spread it in different banks, at up to €100,000 per bank.”
“When it comes to how deposit interest is taxed across Europe, it’s important to understand the implications,” O’Hara added. “Some of our partner banks may withhold tax in their own country, but in many cases, this can be offset against your tax liability at home. Any interest earned must still be declared to Revenue, but we provide clear, helpful guides on our website to make the process easier.”
All banks on the Raisin platform are fully regulated institutions in their home country and have been passported into the Central Bank of Ireland register, which means they are permitted to take deposits.
“We put all our partner banks through a stress test and all have a presence in their home countries. We only work with fully regulated banks which operate under EU and European Economic Area law,” says O’Hara.
There are no fees to customers. Instead Raisin charges banks a fee to be on its platform.
“There are no fees to customers at any point. The interest rate you see advertised is the interest rate you get and those rates are set by the banks, not by Raisin,” he explains.
“I always tell people to try out the system by opening a demand deposit account with just one euro and then, if you like the system, crack on.”
Already more than one million customers across Europe, the US and UK, have done just that.
“Remember, banks aren’t keeping your money hostage,” he says. “It’s up to the saver to look around for savings rates.”
