Starling Bank launches a current account that lets you send and receive euros for free – with no monthly fee
- The digital-only bank’s euro account launches this week
- It is open to those who have a current account, but will launch in phases
- Starling says you will be able to use it with a debit card ‘later this year’
Digital-only bank Starling has unveiled its latest challenge to the high street giants by launching an account that allows customers to hold, send and receive euros for free.
The Starling Euro Account is open to those who have a current account with the bank, and will be fee-free.
It is being rolled out on a phased basis, with priority going to the first 5,000 people who signed up to the waiting list.
Transfers into the account will be made at a real market exchange rate with no mark-up, and customers’ existing debit cards will be enabled to work with the Euro Account ‘later this year’.
Digital-only challenger Starling has launched an account it claims will let its customers transfer money into euros with no charges and has no monthly fees
Can it be beaten?
When it comes to the cost of sending money abroad, Starling’s pledge of no fees and a real market exchange rate lands it comfortably at the top of the chart when it comes to the cheapest way to send euros abroad.
The exchange rate is currently €1.14 to the £1, so sending £1,000 this way would give you €1,140, provided Starling doesn’t introduce any fees or alter the exchange rate as they claim.
The next cheapest option is sending money by bank transfer through Western Union, which comes with no fees either but does slightly diminish the exchange rate.
Sending £1,000 this way means your recipient, whether that’s you or a European-based friend or family member, would get €1,137.10.
COULD YOU SAVE WITH STARLING?
Theresa May could do worse than to send £39bn to Brussels via the Starling euro account
According to Starling, there’s no upper limit to how much you could hold in its new Euro Account.
It’s protected by the FSCS up to £85,000, a threshold that is spread across all your Starling accounts. If you had £15,000 in your personal current account, up to £75,000 worth of euro deposits would be covered.
This means that if she wanted, Theresa May could send the £39billion Brexit divorce payment to Brussels without losing out on the exchange rate or incurring a fee.
A spokesperson for the bank said: ‘We would be delighted to open an account for the Prime Minister and help process all her payments, not just that one.’
TransferWise offers a ‘guaranteed rate’ for 24 hours that is close to €1.14, but levies a 0.35 per cent fee +80p on transactions meaning your recipient will end up with around €2 less than if you’d used Western Union.
It is able to offer such a good rate because it isn’t, contrary to its name, transferring one currency into another.
Instead it has reserves of multiple currencies, meaning you pay into one and receive money from another.
In contrast, most of the high street banks aren’t very competitive compared to either an old-fashioned wire transfer or either of the smartphone start-ups.
Barclays is the next closest and doesn’t charge a fee on sending money either in euros or dollars, but its rate is much lower at just over €1.10, meaning you’re losing around €32 on a £1,000 transfer compared to Starling’s offer.
Nationwide charges a flat fee of £9 if you’re sending money in euros and also has a reduced rate, but it’s slightly better than Barclays at €1.1168.
This would leave you with €33.25 less than Starling’s service.
But none can match the rates of the top three, offering exchanges of €1.1165 for RBS and NatWest, €1.10 for Lloyds, and €1.09 for HSBC.
If you are transferring £1,000 into euros with any of them, you’ll get €1,091.94, €1,090.65, and €1,094.40, respectively. That means you’re losing out on at least €50 in all three cases, compared to the challenger’s offer on paper.
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