Yes, BREXIT has moved the UK just a little further away its continental cousins, but there are still many reasons why you could want a euro currency account.
Perhaps you travel a lot to Eurozone countries, send money to friends or family abroad, earn money in Euros or have European clients.
Whatever your situation, if you often find yourself spending or receiving money in Euros then you could benefit from holding a Euro currency bank account. The trouble is how do you find one that’s right for you?
Most of the traditional ‘high-street’ banks offer banking in Euros, but it’s often antiquated and costly. In this article we take a look at some of the other options. If you are just travelling then take a look at our guide to the best credit and debit cards for travel.
Starling Euro account
The Starling Euro account launched at the start of 2019 as a fee-free account allowing its holders to send and receive payments in euros, and make seamless fee free transfers between sterling and euro currencies.
Since then the account has added debit card functionality through the existing current account card. Allowing current account holders to quickly convert their existing Starling debit card into a euro debit card with only a few taps.
It works by letting the card detect the currency being used, and automatically switching between either Pounds or Euros.
“A single card that can buy things in both Euros and Pounds is long overdue and something that we know our customers will value both in their personal and business lives,”Starling’s CEO Anne Boden.
Unfortunately, towards the end of 2019 Starling introduced a fee 0.4% for converting between pounds and euros. Previously it was possible to move money from a Starling current account to the Euro account without any fees or commission.
There are ways to avoid this, and for small amounts the fee isn’t likely to cause any hardship, but it’s annoying nonetheless.
Negative interest rates: A number of eurozone countries have had negative interest rates for some time now. This is normally unheard of in the UK, however, Starling has opted to charge a -0.5% AER interest rate on its Euro account for balances over €50,000. For example, a balance of €50,000 would not pay interest, but a balance of €51,000, you would pay 0.5% interest on everything above €50,000. In this case on the extra €1,000.
In order to open a Euro account you must hold a regular Starling current account. Fortunately the application process is quick and easy via the Starling app.
It’s a little extra burden for those that are happy with their current bank account, but there is no need to switch or even use the sterling based Starling current account. It just needs to be opened in order to get access to the Euro version.
Although Revolut is now a bank in its own right (In the EU), it is better known as a versatile multi-currency tool which can be used to hold, convert and send funds all at the interbank exchange rate.
There are no fees for usage up to £5,000 and 0.5% thereafter. Though fee-free ATM withdrawals are limited to £200 per 30 days. If you need to exchange large amounts from one currency to another, it makes sense to forego the 0.50% free and instead sign up to the Premium service (then cancel once the month is up). On a £10,000 exchange, this would save around £18 assuming you hadn’t already used £5,000 free allowance, or over £40 if you had.
Another benefit of Revolut that is worth point out, is that it is the only account in our list that can both send and receive SEPA instant payments. SEPA instant is similar to the UK’s Faster payments. It means payments sent to, or from participating banks show up in near real time. Compared to a day or two for regular SEPA payments.
Whilst on the subject of payments, another feather in the cap for Revolut is the payments confirmation statement. Many organisations abroad will ask for confirmation of payment when sending large sums, or initiating contracts. Starling offers this only on its GBP account. Revolut offers this for all transfers and also shows the payment status too. You’ll find this extremely useful when dealing with Spanish agencies.
What to watch out for
We mentioned that Revolut is a bank. Although a UK headquartered company Its banking licence is via Lithuania. As such Revolut is not covered by the UK’s FSCS, but by it’s Lithuanian equivalent the DPS up to €100,000.
That’s worth pointing out, because Revolut has deposits greater than that of the Lithuania’s GDP, so in the highly unlikely even that the bank was to have a problem it’s unlikely Lithuania could afford to reimburse its customers.
Instead it seems Revolut is relying on European Deposit Insurance Scheme” (EDIS) but this scheme still hasn’t been signed off by the powers that be in the EU. That being said, in the UK, Revolut is an e-money provider. UK rules mean e-money providers must ring-fence customer deposits here in the UK. In this case deposits are held with Lloyds.
It’s not a reason to avoid Revolut, but certainly something to keep an eye-on especially if leaving substantial deposits in the account for any length of time.
There’s no special eligibility criteria other than the beyond having a UK address. On signing up, you get a UK account number and sort code, plus an IBAN and SWIFT code for foreign receipts/payments.
Similar to Revolut, Wise is not a dedicated euro account, but a multi-currency account aimed at expats, travellers, and freelancers.
It is a little different though in what it offers. With free bank details for the Eurozone, as well as the UK, US, Australia, New Zealand and Poland:
- European IBAN
- British account number and sort code
- US account number and routing number
- Australian account number and BSB code
- New Zealand account number
- Polish account number
ATM withdrawals are free up to £200 per 30 days. This matches Revolut and UK digital bank Monzo. Starling has no such limitations.
There is also a small conversion fee when you convert your money, typically between 0.35% and 2%.
There are however a number of things to watch out for. Firstly, there is no SWIFT support for incoming payments in Euros. That means accepting payments in Euros outside of the SEPA (the Single Euro Payments Area) is problematic. Though one would imagine the whole reason for Euro account is to accept payments from the Eurozone, and hence in daily use you are unlikely to have a problem. SWIFT payments are available for sending money to non-SEPA institutions.
Again, like Revolut, Wise doesn’t have with FSCS protection (though it is regulated by the FCA), but instead keeps all client funds in a Barclays bank account. As such, even if Wise went under, your money would be safe. However, if Barclay’s itself ceased to exist, your funds would be at risk.
It is also worth pointing out that the Wise account has had issues in the past with ‘micro deposits.’ These are small deposits made by companies to check your identity and other details. For example Netflix, Amazon, and Google all use micro deposits when sign up and using their services.
There’s no fee to open the account, but you will need to be over 18 and have proof of address and ID.
As traditional high-street banks go, Barclays has one of the lowest cost Euro accounts on the market and has eliminated many of fees present with other traditional banks.
Paying money into your Euro account is free for cash in the same currency. Free from your Sterling account if it’s in the same name. ATM withdrawals are free, as are international payments.
If you receive payments into your Euro account from outside of Europe, then there is a £6 charge. Cheques are also costly (but thankfully seldom used these days), and of course any telephone transfers are going to set you back, up to £25 in this case. But here’s the biggest drawback. There’s no ATM card. Rendering this account useless for travellers, but possibly still of value to those receiving money in Euros but spending in Sterling.
Unfortunately there’s another setback here. Unlike those listed above the account can only be opened via a physical Barclay’s branch (remember those?), or via telephone. You must be aged at least 18 years old, resident in the UK and you will need a Barclays sterling current account. Barclays Basic Current Account Holders are not eligible to open a currency account.
N26 is a Germany based digital account that previously operated in the UK. It would have been amongst our top picks but it withdrew from the UK market in part due to Brexit, more likely due to the huge competition in the UK market.
Despite that, the digital account is still one of the best for Expats, or those that are able to sign up using a foreign address (though the address isn’t checked). Since it’s unavailable to the majority of the UK population though, we’ll just direct you to their website below for more information.