Digital banking giant Revolut is slashing its instant-access savings rates, dealing a blow to its 2.8 million Irish customers. Effective November 28, the rates will be reduced by up to 0.4 percentage points.
Revolut’s Savings Rate Reduction Explained
Earlier this year, Revolut made waves by introducing a competitive 2% instant-access savings rate, prompting rivals like Bank of Ireland to raise their own deposit accounts. Dutch challenger bank Bunq followed suit, offering a 2.46% rate for three months.
However, changing economic conditions have forced Revolut’s hand. The European Central Bank has implemented three interest rate cuts this year, with a fourth anticipated in December. This downward trend in rates is impacting savings accounts across the Eurozone.
Under the new rates, existing Revolut Plus and Standard account holders will see their savings rates drop from 2% to 1.7%. Premium account holders will experience a reduction from 2.5% to 2.1%. Notably, Metal and Ultra accounts, offering 3% and 3.49% respectively, will retain their current rates.
This isn’t the first time a challenger bank has reduced savings rates. In August, German rival N26 cut its rates by up to 1.1 percentage points.
Impact on Irish Savers
Daragh Cassidy, of price comparison site Bonkers.ie, warns that Revolut’s move signals a broader trend. “Strong competition from providers like Bunq, Raisin, and Revolut had kept rates in Ireland relatively competitive, but this wasn’t sustainable. Revolut’s reduction, following N26’s earlier cuts, suggests other providers will likely follow suit,” he stated.
Cassidy urges Irish households, who collectively hold nearly €160 billion in deposits, to lock in higher rates while they are still available. Recent surveys reveal that while the average Irish person holds €6,500 in savings, 53% have less than €3,000, highlighting the urgency for individuals to maximize their savings potential.
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