Revolut – a personal finance manager

Managing personal finance takes time and practice. But there are certain paths to make it easier. Lowering fees, especially for currency transactions, automating saving and easy access to capital market investing from the palm of one’s hand is the Revolut’s domain. An app in which you can follow your spending, easily send money to friends, and buy cryptocurrencies. Everything a personal finance manager would do for you.

Who could benefit from Revolut

Revolut is particularly beneficial for expats and frequent travelers. I first heard about Revolut after discussing vacation spending in Switzerland and Germany. During a trip to Ireland, I almost exclusively used a Revolut card for payments.

Why Revolut?

The primary appeal of Revolut is its low fees, especially for currency conversion and ATM withdrawals. Traveling to countries with different currencies can be challenging due to conversion fees and unfavorable exchange rates. Revolut simplifies this process by offering competitive exchange rates and minimal fees, making it a convenient and cost-effective solution for international travelers.

Beyond Currency Conversion

Revolut is more than just a currency converter. It offers a physical card, an IBAN, and browser access to your account, providing a comprehensive financial management solution.

What can it do?

There are more than few things you can do with Revolut – you can pay with their cards (and there is more than one card), there are money transfers (fast between Revolut users, slowish using SEPA), there are savings options (and more planned) and there is investing.

Revolut offers a range of features, including:

• Payments: Use Revolut cards for payments, with multiple card options available.
• Money Transfers: Fast transfers between Revolut users and SEPA transfers.
• Savings: Various savings options with more features planned.
• Investing: Invest in stocks, cryptocurrencies, and commodities.

Revolut cards

Revolut offers few plans for users: Revolut, Revolut Premium, Revolut Metal and Revolut Ultra. Each with different debit card options.

• Standard debit card
  With each and every plan comes an option to get a sleek, carefully designed plastic card – or, to quote someone looking through my wallet, “That’s weird. Really nice card without a picture.” With Revolut Plus, which offers only a few more things than the free plan, you can get to customize the design. With higher plans, you also don’t have to pay for the card delivery, which will otherwise cost you about 4 €.

• Virtual
  With plans Premium and Metal you get “Safer online shopping”. What it really stands for is a Virtual card, that you can use for paying online. As in Mission Impossible, the card destroys itself after use (hey, it’s still virtual, no fire involved). That way your main card and whole account are protected and no one can access your money even after a database leak.

• Metal
  Metal card is paired with the premium Metal plan that’ll set you back ~14€/month but gives you access to more functions like cashback (0.1% in Europe, 1% overseas). There is also travel insurance, purchase insurance, and mobile device insurance. It also comes with several perks such as Freeltics subscription, Financial Times access and others.

• Platinum
  Metal card is something I haven’t had the courage to get yet. It’s paired with the highest plan (Metal) that’ll set you back ~14€/month but gives you access to more perks like cashback (0.1% in Europe, 1% overseas). There is also travel insurance, purchase insurance, and mobile device insurance. The promise of higher interest rates with savings accounts is just a small plus.

Higher the plan, higher the interest rates on savings accounts, so choose carefully.

Revolut vaults

Vaults are generally places to store your valuables. They serve the purpose of digital piggybank (and sometimes spare change jar), where you put money every month or after every Revolut card transaction (I do both in small amounts). You can set up targets and name your vaults according to different goals you want to achieve and save up to – one can be for your vacation, the other for your new car, and the third one just for bad weather, furloughs, or not enough paying customers in a month.

There are three ways to put money into a vault: You set up a monthly transaction (say 10 € on the 5th of every month), you save the rounding difference of every card transaction or you save a one-off amount when you have spare change.

The vaults do not offer an interest rate, however similarly working flexible accounts in GBP, USD and EUR do. Wherever you bank, an offer of a small FX hedge on personal cash is enticing.

Sending money

Banks are supposed to help you send money to someone else. And did understand this crucial truth. They provide account holders with IBAN numbered accounts so customers can use conservative ways of dealing with money or they let you send money to your phone contacts (m-PESA in Africa might have been an inspiration). Also a direct competition to Venmo and others.

Investing

Ease of investing is definitely a plus, which could sell someone to the idea of using Revolut as their primary financial platform, but it’s fair to say they are not an expert tool for investments. For now, there are five asset classes to invest in: stocks, bonds, cryptocurrencies, CfDs, and commodities.

This universe is currently quite limited. There are about 2200+ stocks (curtesy of Globe Funder) and while this list is expanded on occasions, it’s not exactly all that one could wish for. Try finding nice European companies like Nestle, Luxottica, or Vivendi, you’ll probably have no luck.

Almost the same could be said about cryptocurrencies. While you could buy Bitcoin, Litecoin, Bitcoin Cash, or Ethereum (and a couple of others), some of the smaller ones are missing. You also can’t send cryptocurrencies to any other account, they are meant only as an investment.

Lastly, there is a new support for certain commodities. Again, as with cryptocurrencies, nothing else to do with them than buy and sell silver and gold or platinum and palladium. It might be noted, though, that’s all most people do on more sophisticated investment platforms anyway.

So, is it a bank?

Yes. Revolut is a bank. They hold a Latvian and UK banking license. That means that your money in your regular account is a subject to Bank deposit guarantee scheme up to 85 000 GBP or 100 000 EUR. That means in case of a bankruptcy or any other liquidity event, your money should be accessible at least to that amount. In a bank bankruptcy, you would have to wait for the rest until the case would be settled. Same with Revolut as with other banks.

This means that they do not participate in any deposit guarantee scheme, but are legally required not to touch your money, so to speak – bank or credit union would be able to lend it to other customers. Revolut also holds a European banking license and is in process of implementing all requirements to actually become functional bank. That is currently true in only a few countries.

Why switch from your bank to Revolut

I would not recommend to anyone switching entirely from their bank to Revolut, it is an excellent primary payment card provider, especially when travelling abroad one could rely on reasonable currency exchange. I use them for almost all transactions in foreign currency if the payment receiver does support them. (My stockbroker Degiro – for some reason – does not, crowd financing Twino is OK with the payment)

Their app is also pleasant to use as an analytics tool. If a relevant portion of your spending is occurring through a Revolut card, their insight is automatic enough to help you make better plans regarding your spending. And maybe cut it in some relevant places.

Bonus: Revolut Business

We discussed the consumer perspective on Revolut, but they do offer a Business account for the entrepreneurial amongst us. Their offers are aimed at companies and businesses registered in the EU, Switzerland, UK, or USA. They include metal cards (at some plans at least), virtual cards, no-fee currency exchange up to a limit (and after that moderately low fee), the ability to hold up to 28 currencies in an account, cryptocurrency trading and fx forwards to hedge your conversion rates. They developed Business API for integration with your software and also provide Marketplace, where you can find connectors to different apps (accounting software Xero, communication platform Slack or Zapier, the ultimate integrator for many apps). And you can use Revolut Pay, Payment Gateway and others for

I have not tested their business offering yet and include it more for completeness than for any other reason. But it looks promising and even if it might not be the best solution for someone now, they do seem to concentrate on adding more features and more value to their business partners. Currently I am happy with my Pro account in my personal Revolut, which is aimed at freelancers and not companies.