With the rise of online banking in Europe, many people have found it convenient to use their smartphones as banks. Some do so because they have had a bad experience with bricks-and-mortar institutions, or because they feel they are being charged exorbitant fees for exchanging currencies and sending money abroad. Others do it simply because their bank refuses to work with foreign stock brokers or cryptocurrency exchanges.
The truth is, you’re probably giving more money to keep your local bank alive than it deserves. The banking world has been resting on its laurels for a long time. They’ve lost touch with today’s marketplace and fallen behind an evolving customer base.
Digital banking options and decentralised payment systems are popping up everywhere, offering investors, travellers, freelancers and small business owners a completely different money experience. As a result, the number of banks to choose from has become overwhelming, leaving many people at a crossroads trying to decide what is best for them. Let’s take a look at some of the digital banks in Europe that have found their way up the ladder.
The best online banks in Europe
Here are the best online banks available in Europe, based on years of research and testing:
- Wise: Best for overall, availability, and trust. Wise (formerly Transferwise) is a popular European digital bank that offers multi-currency accounts, free business accounts, fast customer support and is available worldwide.
- Revolut: Best all-around online bank. Revolut offers free a free multi-currency account, personal Euro IBAN, UK sort code and account number, free virtual cards, commission-free stock trading, and even more features with the paid plan.
- N26: Best for deposit guarantee and safety. N26 is a fully-fledged, licensed digital bank that offers freelancers free retail and business accounts with no hidden fees, including deposit insurance of up to €100,000.
- Vivid Money: Best newcomer. With their free plan, Vivid offers a fee-free euro bank account, free virtual debit cards, and commission-free stock, ETF, and crypto investing.
- Curve: Best for connecting all your cards in one place. While not a bank per se, Curve joins the ranking because it lets you manage all your cards and accounts with one app.
Picking the best digital banks in Europe is a daunting task, especially when you consider all of the factors that go into making such a decision. Which bank has competitive pricing? Is customer service helpfull if I need help with anything? Will they close my account out of the blue? How many products does it offer to meet my needs and goals for banking?
European challenger banks differ in terms of fees, security, and support for different assets and investment services. Let’s take a deep dive into the list of the best digital challenger banks in Europe and explore them one by one to help match you with one that best fits your needs.
1. Wise: Best overall and best multi-currency account
Wise (previously called TransferWise) is the banking provider I have been most impressed with because of their cheap international money transfers, free multi-currency bank accounts, and user-friendly mobile and browser app. Transferwise is available in most European countries and supports over 50+ international currencies.
What’s great about Wise is their borderless multi-currency account. You’ll get your free own local bank details in the US, UK, Europe, and several other countries — independent of your current location. All of these accounts are issued in your name or in the name of your company, which makes Wise a great choice for pretty much everyone who sends or receives money abroad, including investors, students, nomads, and business owners (freelancers and corporations).
Wise also provides physical and virtual Mastercard debit cards to users in the EEA. These cards can be controlled directly in the mobile app and be connected to Google or Apple Pay, as well as to the popular Curve card (another favourite of mine; see below).
Main benefits of Wise:
- Free multi-currency bank account
- Personal local bank details: EU SWIFT/BIC and IBAN number, UK sort code and account number, US Routing number and Account number, +7 others
- Supports 50+ currencies
- Available in 144 countries
- No exchange rate markups
- Low and transparent fees (amount depends on currency pair)
- Free business account (freelancers and corporations)
- Licensed E-money institution regulated by the FCA
- Bank holding the money: Barclays, Wells Fargo
There are ATM fees, but only if you withdraw over 200 EUR per month. However, as TransferWise is not a typical bank, it lacks many of the features such as insurance, premium accounts, as well as crypto support.
It does have a physical card and it supports bank transfers, although it doesn’t work with cash or cheques. Though not available 24/7, its customer service still scores perfectly, with an immediate connection to a support agent.
2. Revolut – Best all-around online bank
Revolut is one of the largest and most popular digital banks in Europe. It’s been around since 2015 and offers a whole range of banking products: Multi-currency accounts, investing, cryptocurrency trading, and even insurance.
They are famous for their extremely competitive exchange rates when dealing in different currencies. With the free plan, you get a personal IBAN account in your name, a multi-currency spending card, disposable virtual debit cards for spending safely online, foreign currency transactions. Best of all, the lowest plan is free to use.
Main benefits of Revolut:
- Free Euro IBAN account
- Free UK sort code and account number
- Free currency conversion
- Spend and transact in 150+ currencies
- No monthly fee as long as you stay within the limits of the monthly spend limit.
- Free disposable virtual debit cards to spend online
- Commission-free stock trading
- Buy crypto and gold in-app
- Premium plans with cashback on spending, travel insurance, unlimited FX, purchase protection, baggage and flight insurance,
Revolut supports spending in over 150 currencies at the real (interbank) exchange rates with no hidden fees. The free plan offers €1,000 free FX per month, while the Premium plan offers unlimited free FX. You can also withdraw cash abroad without extra charges up to €200 per month with the free plan and higher limits with the paid plans.
3. N26: Best “real” bank with deposit guarantee
Berlin-based N26 has been my favourite “real” online bank in Europe since 2018, and not without reason. With N26, you’ll get a 100% free, fully insured EUR bank account in less than 8 minutes with coverage up to €100,000 by the German Deposit Insurance Scheme, a free debit card, free SEPA transfers, and free EUR withdrawals.
N26 offers several different plans for individuals and freelancers, but you can always start with the free plan and decide from there. The free plan comes with zero monthly/yearly costs, no minimum deposit or account balance requirements, plus a free virtual Mastercard debit card that can be connected to Google or Apple Pay.
You can also withdraw cash for free 3 times monthly in the Eurozone and spend in a different currency online with no foreign transactions fees (you get the official Mastercard rate which is usually the best on the market).
However, if you plan on using N26 as your main bank account (which several people do), travel a lot, or do location-independent work, I recommend you explore the paid plans, N26 You and N26 Metal. These offer cheap overseas medical insurance, trip insurance, flight insurance, luggage insurance, and car insurance with excellent coverage. Plus, you can open shared sub-accounts and get discounts when shopping.
Main benefits of N26:
- Has EU banking licence
- Deposit guarantee up to €100,000 (both personal and business)
- Free business account for freelancers with cashback on all purchases
- 3 free ATM withdrawals per month in €
- Free payments in any foreign currency
- Insurance options included in premium versions
- Mastercard 3D Secured
- No minimum deposit or account minimum
- Separate sub-accounts for managing your expenses and saving
- Regulated by BaFin
- Time to open an account: Around 8 minutes
- Bank holding the money: N26 Bank
While N26 doesn’t offer the same multi-currency benefits as Wise, there is no reason not to combine the two, since both are free to open and test out.
4. Vivid Money: Best Newcomer
Vivid Money is a recently launched German-based neobank that gives you a free euro bank account, free virtual debit cards, and offers commission-free stock, ETF, and crypto investing, plus instant peer-to-peer payments.
I’ve been testing the functionalities of Vivid since the beginning of 2021 and watched the bank launch a tremendous number of new features in this short period of time. If Vivid keeps developing at the same pace, they have a bright future ahead of them.
I’m a bit surprised that Vivid hasn’t received more attention in the European banking scene as their app offers so many free features and rewards. My guess is that this has to do with their focus on regional markets rather than Europe in general.
Main benefits of Vivid:
- Free Euro bank account with personal German IBAN
- Hold up to 40 currencies in free separate pockets
- Commission-free investing with no limits
- Up to 20€ cashback per month on the free plan and €100 on paid plan
- Free cash withdrawal globally up to 200€ per month on the free plan
- Deposit guarantee up to 100,000€ on all accounts
Like Nuri, Vivid’s banking system runs on Solarisbank’s infrastructure. This means your money is stored in a fully regulated European bank and protected up to 100.000 € by the German Deposit Guarantee Scheme.
Vivid’s mobile app comes with numerous benefits, including an overview of spending for each currency, budgeting tools, smart savings, separate savings accounts, while the accompanying physical and virtual debit cards come with 3D Secure online payments, and a number of security features.
5. Curve: Consolidate Your Banking into One Place
Curve is a unique banking services provider that was designed to offer its users a unified platform for keeping track of their different accounts, expenses, and much more.
The main selling point of Curve: “One place to spend, send, see and save money.” This makes it a perfect choice for those who have multiple accounts and are struggling to keep them in order.
Special offer: New EU and UK users will receive a free 10 EUR/GBP bonus on their account after activation with the first transaction.
Curve offers a debit MasterCard that you can use to facilitate all current account transactions, but its primary focus is on linking different accounts
Main benefits of Curve:
- Great for collecting all your cards in one single place
- Get up to 1% cashback on Spotify, Uber, Netflix, and other popular services
- Instant notifications on how much you’ve spent
- Authorised in the UK by the Financial Conduct Authority (FCA)
- Trustpilot rating: 4.3
- Time to open an account: A few minutes
Frequently Asked Questions
What Are Digital Banks?
As the name suggests, digital banks are a new type of banks that are out to challenge the long-standing traditions of big credit institutions around the world. The main thing that makes digital banks different from regular banks is that they only exist in digital form, with no physical branches to visit.
As such, digital challenger banks — also known as mobile banks, online banks, or virtual banks — often serve users in numerous countries. Thanks to their borderless nature, many of the digital neobanks operating in Europe can be accessed from anywhere in the Eurozone. Some even welcome customers coming from abroad.
How Do European Challenger Banks Work?
Now that we’ve reached the end of our list of the best digital banks in Europe, it’s time we’ve looked into how these ‘challengers’ actually work.
If you’ve had any experience with challenger banks, you may have noticed that they’re rather similar to traditional banks and other financial institutions in some ways.
This is no coincidence, as many of them were, in fact, modeled after traditional institutions.
That way, they can be user-friendly and their customers can still be familiar with how they work, despite the fact that they represent an entirely new trend.
Of course, there are exceptions — some banks in the digital banking space that differ from familiar financial institutions entirely, and likely, that is exactly what their intention was when they were designed.
Other advantages that challenger banks have over traditional financial institutions include their adaptability and a strong focus on technology.
The two are closely connected, as technology is often their key focus, and the reason for their existence, in the first place.
With the world taking a step back from computers and focusing more on smaller devices such as smartphones and tablets, challenger banks were quick to emerge with a fintech solution.
Meanwhile, traditional banks believed the technological shift to be a passing trend, or at the very least, they lacked the imagination to come up with a solution that would allow them to dominate the online markets.
Consequentially, virtual banks emerged to satisfy the growing demand, which allowed them not only to survive in a highly competitive market but also to become a fierce competition.
Of course, they’re still significantly smaller than traditional banks, but they also have the advantage of not featuring sluggish legacy systems that established banks still suffer from.
In the end, you could say that their “secret” lies in the fact that they’re modern, efficient, technologically focused, and adaptable to modern society’s needs.
What Do the Best European Mobile Banks Offer?
Apart from the greater efficiency and availability, challenger banks also conquer the market due to the fact that they can offer the same services as regular banks. Not only that, but they often do it at a lower price.
Since they do not require physical offices, they can also afford to have fewer staff members. All of this results in significantly lower fees, which ultimately creates a better deal for their clients.
Meanwhile, their services can keep the same quality and diversity. This may differ from one digital bank to another, depending on its focus. However, they all have offers that include:
- Savings and Checking Accounts
- Credit cards
- Merchant accounts
- Investment accounts
- Retirement savings
- Consumer lending
- Mobile banking
- CDs
- Cryptocurrency trading
- Customized financial planning advice
- Greater control over the card, with features such as geo-locking and freezing
- and more.
Apart from that, their services also offer practical benefits, such as:
- Convenience in deposits
- Simple loan applications
- Automation of multiple financial services (such as bill payments)
- Free cash transfers on a local and international level
- The ability to split bills
- Real-time notifications
- Cheap ATM withdrawals
- Inexpensive spending
- Global availability
- Improved customer service
- No minimum deposits
- Easy access to banking services
- Greater transparency regarding fees and charges
- Quick and easy account opening process
- Fast processing
- and more.
Can I Open a European Bank Account Online?
As mentioned above, the ability to easily and quickly open a bank account online comes as one of the greatest advantages of mobile banking.
Despite the fact that our focus remains on European challenger banks, many of them remain capable of providing services to non-European residents, as well.
However, Revolut is our top pick for opening a European bank account for non-residents, given that you live in Australia, Canada, Singapore, Switzerland, or the United States.
Anyone living outside these countries might want to explore TransferWise to get a free, borderless account with a European account number and IBAN.
A free international bank account should be available to anyone, as long as they live in a country that a specific bank covers.
This might mean that not every bank will be available to every non-European, but if you do, in fact, live in Europe, then you should have no problem accessing their financial services through online banking.
Your online bank account will come with everything you may require to spend, save, and keep track of your money. You can do it all from a single app, which is usually very user-friendly and easy to navigate.
Better yet, you’re also likely to receive a free debit card, set daily spending limits, lock or unlock your card, reset your PIN from anywhere and at any time, and more.
Opening an account usually only lasts a couple of minutes, and there are no dozens of forms that you need to sign, wait in line, and suffer similar inconveniences that you likely experienced in traditional banks.
What to Look For In a Top European Mobile Bank
Now that we’ve taken a look at some of the largest and most popular digital banks, we should try to answer some important questions, including what digital banks are, how they work, and other similar matters.
With the banking sector already being highly competitive, challenger banks need to try not only to be better than traditional institutions but also other online banks. However, not all of them provide an identical offer, which is not surprising — after all, they differ in quality, focus, and services that they feature.
As a result, anyone who might be looking to open an account with one of them needs to do proper research before determining whether or not the chosen bank is the right pick for them.
This means reviewing a number of different aspects, such as fees, security, support, premium benefits, their business account, currency exchange fees (for travelers), whether or not they offer cryptocurrency support, and more.
In order to show you the importance of thorough research, as well as how different aspects can impact your satisfaction with your online bank of choice, let’s take a deeper look into these aspects and see why they’re so important.
Fees
Without a doubt, fees are among the most important aspects that you need to look into when choosing a bank. This goes for the challenger and traditional banks alike. Traditional banks tend to charge fees for everything — account opening, payments, withdrawals, switching between currencies, and more.
Challenger banks, on the other hand, handle things quite differently, which is one of the reasons why people prefer them these days. While they’re not entirely fee-less, they still charge significantly lower fees (around 2%, as opposed to 5% or more in many traditional banks), and in some situations, fees are eliminated entirely.
For example, many of the digital banks do not have fees for withdrawing money, or at the very least — they have a limit on free withdrawals, which usually goes between a couple of hundred dollars to $1000. Their international money transfers do come with lower fees, but money transfers to others who use the same bank are often completely free.
Naturally, there are no rules in this area, and it can all differ quite a bit from one bank to another. But, the fact still remains that traditional banks do not offer such benefits, which makes online banks quite preferable, in comparison.
Security
Of course, while you may be interested in lower fees, security remains one thing that will always be absolutely crucial for any client of any bank. After all, the bank needs to be able to look after your money for you. If it cannot do that, its life span will not remain very long.
Now, with these banks all being on the internet — in the domain of hackers, scammers, cyber thieves, and other criminals — banks need to do a lot in order to be able to guarantee the safety of your funds. To do it, banks tend to invest large amounts of money into security, firewalls, anti-virus and anti-malware software, and numerous other detection and prevention measures.
However, no code is perfect, and there is always either a flaw, an oversight, or a new way to bypass security. Banks get targeted, and money gets stolen. What then?
Well, banks have you covered. In fact, they pay for insurance of users’ funds through the Financial Services Compensation Scheme (FSCS), which may differ from one bank to another. Some banks guarantee the protection of 100% of their customers’ funds, such as Monese. Other banks guarantee the safety up to €100,000, with some covering more, and some less than that.
There is also another approach, where banks employ third parties to look after their customers’ funds. These are professional, authorized institutions that specialize in protecting funds as per regulatory requirements. One example of a bank that uses such a solution is Revolut, which is among the best-known services of this kind.
Support
Next, we have customer support. This is one aspect of any online service that is extremely important, and yet, many services fail to recognize that. Of course, this is hardly ever the case with challenger banks. With their entire purpose being to deliver convenience and good quality service, their customer service should, by all intents and purposes, be among the best ones you can find.
Pretty much all digital banks have customer service, and they’re usually quite easy to access, likely via phone, social media, or other methods. Support teams also need to be helpful and efficient, which they usually are. With no physical address to which users can go and request help for their problem, the customer service is pretty much all that users have, and the banks are well aware of that. You can contact them for any kind of help you need, including troubles with your card or account, questions or issues regarding the app, or help with upgrading your account, and more.
This should also be your first stop if you suspect that someone managed to break into your account and steal or spend your money. Because of all of these reasons, customer support needs to be capable and quick to react.
Premium Benefits
Banks provide a number of other benefits, known as premium benefits. Simply put, these include some of the advantages that only their clients get to enjoy, such as specific insurance (as mentioned above), multiple types of current accounts, free abroad transactions, ability to exchange cryptocurrencies, support for multiple virtual cards, spending insight, the ability to take personal loans, access to airport lounges, and alike.
Of course, such benefits differ from one bank to another, and that only serves as yet another reason to carefully examine each of the online banks’ offers before choosing one.
Business accounts
If you require a business account, challenger banks can satisfy such requirements as well. As you likely know, business accounts do not only revolve around storing money and making transfers. They need to be helpful when it comes to easing the administrative burden of your typical day-to-day business. Not to mention helping you manage the finances of your growing business.
Sometimes, you may even require a flexible lending service or a service that would help you invest in different growth plans. Now, depending on the bank, such accounts may be free, or they might include a small monthly fee. They usually have free card payments, bank transfers, and withdrawals. Deposits can be free or have a fixed fee, usually only around a few dollars.
As for other benefits of such accounts, they often offer multi-currency cards, very fast payments, multiple simultaneous payments, categorized transactions, partner discounts, popular software integrations, priority customer support, and more. Some banks also have some unique features for business accounts, such as Starling Bank’s Goals feature, which allows you to create financial savings goals and set a certain amount of money aside in order to achieve that goal.
Currency Exchange Fees When Traveling
Everybody likes traveling, whether for business or pleasure. However, traveling comfortably also includes being able to handle your money without much stress, difficulty, or complications. Virtual banks shine in this area, as they allow you not only to manage your funds from anywhere in the world — as long as you have an internet connection — but they also let you switch between different currencies.
Now, such services are often free of any fees, unless you’re working with large amounts of money. Let’s take Revolut as an example.
With this bank, you can change currencies for free up to £5,000 per rolling month. after that, you will trigger a 0.5% fair usage fee. Of course, you do not have to memorize or keep a note of how much money you’ve exchanged during the current month, as you’re allowed to check your remaining fee-free allowance at any time. Simply go to your Profile section and look at this data up under your current price plan.
However, if you’re using Revolut Premium or Revolut Metal — you get to enjoy unlimited fee-less currency exchange. Other banks offer similar deals, but the fee-free allowances can differ, as well as the fees themselves after you break through the allowed limit.
Crypto Support
Finally, we have cryptocurrency support, which is something of a grey area at the moment. You see, cryptocurrencies are still a very young and very new type of money. Their usage, or even support, varies greatly from country to country, and even then — there are banks that can’t wait to start dealing with them, as well as those who are completely ignoring them.
As cryptos fight for adoption, retail banking itself is undergoing a type of revolution. Many of them understand that cryptocurrencies are quite interesting to younger generations — those who will be their primary customers within a few short years. Furthermore, cryptocurrencies have already proven that they’re here to stay, and they also appeal to the banks’ own digital-first approach.
So, as millennials and Gen-Z become more and more interested in crypto, so do the up-and-coming fintech firms that are working on developing new platforms.
Of course, cryptocurrencies do not require banks to make transactions, store money, and alike. However, it can still be relatively challenging to transfer money from cryptocurrency exchanges to your pocket easily. Businesses that accept cryptos are growing in number, but slowly. Meanwhile, the crypto sector provides many opportunities to earn money and invest in the future, which attracts a lot of people now, many of which cannot easily withdraw their money once they make it through trading.
By providing support for cryptocurrencies and connecting with exchanges, banks can allow people to invest and trade, and then easily withdraw funds once they make a profit. With cryptos being a global phenomenon that even caused entire governments and central banks of numerous nations to pay attention, establishing a strong connection between the new and old financial worlds is imperative, and many challenger banks understand this very well.
How Do Top European Mobile Banks Differ from Traditional Banks?
As you may suspect, online banking comes with numerous advantages over traditional banking. One obvious advantage is that it is available at all times, whereas traditional banks have their working hours, and are usually unavailable over the weekends.
With no physical offices, online banks also have fewer costs to think of, which allows them to reduce their fees and often eliminate them completely for a lot of aspects. Further, online customer services have become rather good over the course of the last decade, and email support and live chats are slowly eliminating phone calls, and visits to the banks’ offices, which are often wasting a lot of time and require additional effort, even when it comes to the simplest of problems.
Online banks also allow customers to immediately open new accounts, apply for a mortgage, view balances, transfer money, and more. Mobile banking has become particularly popular, and with the world being quick at adopting technology, traditional banking is slowly becoming a thing of the past.
How Is My Deposit Secured With European Mobile Banks?
As we briefly mentioned earlier, deposits are secured in numerous challenger banks by advanced security systems, but also by insurance guarantees. Many of the banks offer quite large insurances per customer, which ensures that you will be compensated in case anything goes wrong and your money ends up stolen.
While this is greatly appreciated by individuals, it is even more popular among businesses, which generally work with much larger amounts of money. In the end, a bank is a bank, and as long as it is regulated and has proper licenses, its customers will be looking for greater convenience, which is what challenger banks deliver better than any traditional bank out there.
How Safe Are the Best European Challenger Banks?
While it is comforting to know that you will receive compensation if something happens to your money, it is in everyone’s best interest not to end up in a situation where your money ends up missing in the first place.
Despite the fact that these are online banks, they have to abide by many of the same rules and regulations as regular banks. That means that the security has to be up to a certain standard, and from the customer’s point of view, the only difference is greater flexibility, availability, and extra benefits.
You don’t have to go to their physical office, and you get to enjoy all the same services and features, plus some extra ones. Challenger banks are not extremely innovative, but they do provide convenience, which is one of the most sought-after qualities in the modern world.
Are Digital Banks the Future?
With the world feeling the allure of a cashless society, where all payments are made digitally, the banking industry will undoubtedly change in the future.
In fact, one study concluded that digital neobanks in Europe will serve around 85 million clients in 2023 – around 10% of the total population. At the same time, thousands of local banks branches are closing down, forcing us to access all services online.
While this allure of a cashless world gave a push to the cryptocurrency sector, although this does not mean that digital challenger banks necessarily deal with digital currencies.
Instead, they act similarly to traditional banks, mostly working with fiat (traditional) currencies only, while being regulated and licensed by the appropriate authorities.
