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Why is a digital bank better than a traditional one?

Technology and the internet make the world change fast! It has already changed the way people work: remote working is much more common than a few years ago and many people have become digital nomads, meaning they travel and work around the world. This new way of working has in its turn created new needs when it comes to payments and bank transfers.

If you are a freelancer, a remote employee or somebody who simply makes international transfers from time to time, you may have noticed that receiving money at a traditional bank or making international money transfers may cost you a lot of money at the end of the day. Why? Because there are not only bank fees involved, but also the currency exchange rates that take a toll on your deposits and transfers.

Why is a digital bank better than a traditional one? The best deals for  anyone who makes financial transactions abroad

Banking services for international freelancers
Image by Freepik

You should, therefore, seriously consider trustworthy alternatives, like digital banks and money transfer apps that can offer you easy and cheap transactions in foreign currency and that convert currency at the best possible rates in order to have better budget control while working abroad

1. The perks of money transfer apps and digital banks

If you are a freelancer or a digital nomad you may have clients situated all over the world. This means that you may get paid in different currencies via different banks, which might translate in expensive fees and which might lower your actual income. To avoid losing money every time you get paid, you can choose a secure online-only bank, like Monese or Revolut, and take advantage of the following perks that come with your choice:

  • Because digital banks don’t have significant infrastructure and overhead costs, you will receive higher interest on your savings.
  • A bank with only digital presence will also offer lower service and maintenance fees compared to a traditional bank.
  • You will most probably receive better online services than with traditional banks – and this is important especially if you are travelling. You don’t need the physical store in the city you happen to be at – the most convenient for you will be to solve everything easily online!
  • Most digital banks offer unlimited or a big enough amount of transfers at no cost.
  • You can receive and transfer money abroad in various currencies and keep the money in the currency you wish! This is extremely convenient if you are paid by clients coming from various countries or if you travel between countries all the time.
  • Your transactions are usually done a lot faster than with traditional banks.

But let’s make a brief comparison of Monese and Revolut, two popular digital banks you can find on AppJobs.)

2. Revolut VS Monese

  • You can use a card with Revolut for your transactions at the interbank rate in 150 currencies for free in 120 countries. You can freeze a card if you lose it and unfreeze it if you find it, very easily online.
  • You can make international money transfers to 25 countries at the interbank exchange rate up to £5000 a month for free. Over this amount, you are charged with 0.5%.
  • You can perform withdrawals from physical ATMs for free up to £200 per month. After this limit, there is a 2% fee.
  • The Standard membership with Revolut is for free. There are also the Revolut Premium plan for £6.99/month or £72/year and the Revolut Metal plan for £12.99/month or £120/year.
  • Revolut also offers you features like analytics for your spending habits, categorised by type of transaction, merchant or by country and can also help you set weekly budget goals.
  • Revolut offers you access to cryptocurrency exchange.
  • You can hold a physical balance on the app in 16 currencies.

Monese - AppJobs

Monese

  • You can use the Monese card abroad with a 2% fee for every card transaction.
  • You can make international money transfers with a fee of 0.5% to 0.75% of the transfer amount at existing interbank rates. You are informed about the rate that will apply on your transfer before you finalize the transaction. There is always a minimum fee of £2 per transaction.
  • There are no membership fees for Starter members. Plus members pay £4.95/month and Premium members £14.95/month.
  • As a Starter member, you can make ATM cash withdrawals with £1/1€ each. As a Plus member you can make 6 free ATM cash withdrawals/month (£1/1€ from there on) and as a Premium member you can make unlimited free ATM cash withdrawals.
  • You can hold a physical balance on the app in two currencies, GBP and Euro.

3. Another alternative for money transfers: Transferwise

For low cost and fair money transfers, you can also check out Transferwise. It will give you the best exchange rates. The exchange rate is guaranteed as long as TransferWise receives your money within 72 hours. You can make your transactions fast and easy and you can feel safe with bank-level security (without the traditional bank).

Do you have more questions? Find us on Facebook and join our Freelancers’ group or the AppJobbers’ groups to connect with other freelancers and share your personal experiences!

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Paulina Bajorowicz joined Appjobs in November 2018 and she is now the Content Marketing Specialist. She manages Appjobs blog and social media channels, coordinates outreach activities and cooperates with journalists and content creators around the gig economy.