Better alternatives to saving accounts in Europe

[oneofthesheep]

Hi all, I'm 28 and I'm based in Ireland. Interests on saving accounts offered by banks are generally very low here. To give you an idea, unless you go with a fixed term deposit account which locks your money for 6 to 24 months, interests can be as low as 0.1%-0.25%.

Considering that I'm planning to relocate in 1-2 years to a different European country, do you know if there are better saving accounts that can be opened without geographic restrictions (e.g. being a resident in a specific country) and without having to lock your deposit for a fixed duration of time?

Thanks!

 

[snoopy90]

@oneofthesheep A simple option is to just throw it on a money market fund or ETF, such as $XEON, or a term bond ETF if you have a specific date in mind (iShares' iBonds).

 

[oneofthesheep]

@snoopy90 Great suggestions. I already have a fairly big portion of my net worth already invested in ETFs for the long term (10+ years) and I'm currently studying bonds to understand what would be the best solution for me. After some research I would have opted for a short-term (3/5 years) government bond, but I'm still open to consider ETFs bonds. Do you have any preference/thoughts between the two?

 

[snoopy90]

@oneofthesheep Personally, if I were holding euros, I'd buy those iBonds corp ETFs and either a lone gov bond or treasury, whatever is cheapest locally and available on a 50-50 allocation. This is a good mixture of public/private and the ETF is likely to remain liquid if I needed some of the money ahead of time.

If I were holding USD though, options are better. Fed treasuries are effectively risk free and there is an iBonds ETF as well for them, I believe without corporate risk.

The market could use some decent term gov bond ETFs in euros, though.

 

[oneofthesheep]

@snoopy90 Makes sense and agree with your last sentence! Are the iBonds ETF in EUR edged against USD?

 

[snoopy90]

@oneofthesheep The euro ones? I don't know off hand, on mobile atm. Valid concern, though.

Another option could be an ultra short-term bond ETF or fund. A little better than an MMF, no real liquidity issues, and unlikely to see much volatility, but subject to interest rates changing. I'd expect these to be hedged.

 

[lisek]

@oneofthesheep Checkout the neobrokers. I am using Trading 212, Trade republic is also a good option. Revolut does not give good rates unless you pay for Ultra.

Trading 212 pays 4% for EUR, 5% for USD and other currency. Trade Republics pays 4% on EUR.

Good luck!

 

[eastcascade]

@lisek T212 offer is a QMMF bubble wrapped product. Hence, no deposit protection, capital at risk and different tax rates may apply (investment rather than deposit interest). Considerations.

 

[oneofthesheep]

@eastcascade Thanks for sharing! All input, is good input

 

[oneofthesheep]

@lisek Thanks for the comparison! It's a shame that Revolut doesn't offer a more competitive option compared to the others, given that's so widely used, especially in Ireland, and I've also heard great things about Trade Republic. I'll definitely look more into them, thanks!

 

[scottcuster]

@oneofthesheep Check raisin for options in different European countries.

I assume you've done your due diligence in finding the best options in Ireland - sometimes banka give you higher interest if you're a new client or receive your salary in the account and such things, take advantage of those offers.

Trade Republic, Revolut and Trading212 should all be available to you and give ~4% interest on savings in EUR.

 

[oneofthesheep]

@scottcuster Raisin seemed like a great option in the beginning! Unfortunately you can only use the service as long as you're an Irish resident. Since I'm planning to move in a relatively short time-frame, I thought it might not be worth opening an account. Are you aware of anything like Raisin that doesn't require you to be resident in any specific country?

All the other options you mentioned, make lot of sense and reinforce other suggestions I gathered in these days from friends and colleagues, so thanks!

 

[scottcuster]

@oneofthesheep Raisin is available in many European countries.

If you choose a non Irish service provider you can just inform them of your new tax residence and that's it.

You can of course also switch to a different account when you move. Independently of moving, conditions change all the time so changing accounts is a normal thing to do for optimization.

 

[oneofthesheep]

@scottcuster Oh I didn't know, I'll have another look at the terms and conditions then! Thanks!

 

[betzoor422513]

@oneofthesheep You could use BUNQ. Currently 2,46% paid weekly. Can have two withdrawals a month before loosing interest.

 

[eastcascade]

@betzoor422513 2.46% is not great when you can get 4.00% with Trade Republic, ~4.10% with Raisin and 3.25% with Lightyear and about 3.80% with a QMMF such as XEON.

 

[betzoor422513]

@eastcascade It is not a fixed term deposit. Just a savings account. Meaning money can be withdrawn whenever you want.

 

[eastcascade]

@betzoor422513 Ditto with Trade Republic, Lightyear and XEON. But they pay more.

 

[betzoor422513]

@eastcascade Only knew of TR. hadn’t heard of the others before. Oh well, OP asked a suggestion, I gave one that I knew of

 

[oneofthesheep]

@betzoor422513 I didn't know BUNQ, I'll have a look, thanks for suggesting!