The Starling euro account was launched early in 2019. Since then over 25,000 have opened an account.
It offered fee free transfers and deposits between pounds and euros, and allowed holders to make payments in euros without any additional charges. That is now set to change with the introduction of a 0.4 per cent currency conversion fee.
Starling’s GBP current account charges users £5.50 for a SWIFT payment, plus additional fees of roughly 4 per cent; or a low cost payment of around 30 pence plus additional fees. For example a SWIFT payment of £1000 sent directly to a third party in euros would cost £45.32. The low cost option would total £40.14
The introduction of the Euro account saw holders able to dodge these fees, seamlessly transferring money from their Starling GBP account to their Starling euro account, then making the payment fee free.
Now (from 1st September 2019), Starling has introduced a new 0.4 per cent currency conversion fee. Sending money from the Euro account to third parties in Euros will still be free, but moving money from the euro account to the GBP account and visa-versa will incur a charge.
Taking the £1000 from our example above, and moving it into the Starling euro account, will now cost £4. While not the end the world, it will come as an annoyance to those that get paid in one currency but spend in another.
Beat the hike
There is however a way to avoid the fee, but it is a little more involved. The Revolut card allows its holders to transfer money in pounds and euros (amongst other currencies) fee free.
To avoid the Starling conversion fee, you could transfer GBP from your Starling current account to Revolut, then transfer euros back from Revolut to your Starling euro account, or the other way around.
It sounds like a lot of work to save £4 per £1000, but we are a money saving website after all, and it really only takes a few minutes. Where this method really comes into its own is with larger transfers, though it’s worth bearing in mind that the free Revolut card has a transfer limit of £1,000 per month, after that there is a 0.5% so it would be cheaper to exchange within the Starling app. If however, you are regularly making transfer you can increase this limit by opting for Revolut Premium at £8.99 a month. It only makes sense though where the fees would be more than the subscription.