In this article, we’re taking a detour from traditional banking to help you find and open the best international digital bank account.
Now, we’re not the biggest fans of digital platforms and EMIs. But, it’s not because we dislike innovation or have some weird obsession with traditional banking.
Instead, we have concerns over security, financial stability, and customer service. Unfortunately, when it comes to digital banking, these critical features often take a back seat to rapid customer acquisition.
Of course, if you’re looking to open a bank account in Europe as a non-resident and are considering taking the traditional banking route, there are options for you.
- It is 100% possible for foreign non-residents to open international accounts digitally
- International digital accounts should not be a replacement for traditional accounts
- Foreign non-residents can choose from a variety of digital platforms
- Digital account options available to you highly depend on your residency, your banking objectives, and how you will use your account
- Having a digital account can save you money from paying unnecessary fees on international transfers
Nevertheless, most people can benefit from having an international digital account. And, certain digital banking options are worth including in your banking stack.
Now, if this is your first time visiting GlobalBanks, don’t forget to download your free copy of the Non-Resident Banking Starter Guide before moving on. It provides even more details on how to open international bank accounts and prepare your banking stack.
In this article we will break down your options, some key questions to ask, and how to determine which digital bank will serve you best. We’ll also share a few of the overlooked risks to consider before opening as well as a few alternative options.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- Benefits of Opening an International Digital Bank Account
- How to Use Foreign Digital Bank Accounts
- How to Choose the Right Banks
- A Final Note on Opening Bank Accounts
- Ready to Explore Your Options?
Benefits of Opening an International Digital Bank Account
In past articles, we’ve talked about the risks associated with international digital accounts. Those still hold true.
In fact, we do not recommend international digital accounts as a replacement for traditional bank accounts. Instead, we see a pairing of digital and traditional bank accounts as the best way to optimize your banking stack.
With this in mind, here are some of the top benefits that you can unlock by opening digital international bank accounts:
1. Low-Cost Foreign Transaction Fees
One of the major benefits of using a digital foreign bank account is it can save you money. This is because certain digital international platforms offer better currency conversion rates and lower fees on international transfers than a traditional bank would offer.
In fact, depending on the number of international transfers you make and which currencies you’re transacting in, and how horrible your current bank account monthly fees are, having the right mix of digital banking solutions (in addition to traditional bank options) could help you save a significant amount of money each month.
The key, of course, is knowing where you’re getting burned on fees in the first place and then figuring out which digital platform options will work best for your situation and help you to reduce costs and save money.
2. Limited Financial Requirements
Unlike a traditional bank, most international digital accounts don’t require a minimum deposit when opening a new account. And, if they do require a minimum, it’s often very low. That’s because many digital platforms are venture-backed and focused on customer acquisition and growth, not profits.
So, they’re focused on making it as easy and attractive as possible for customers to open accounts. And, that means the barrier to entry is low and you don’t need a lot of money to get in or maintain an account.
For this reason, if you have limited cash to begin with, opening accounts with a digital bank might be something to consider.
3. Better Online & Mobile Platforms
Even the biggest supporters of traditional banks have a hard time arguing this point. Digital banks have better online platforms. They’re focused on improving the user experience. That means digital accounts are often simpler and easier to use.
While a user interface and aesthetic attractiveness might feel cosmetic and seem unimportant on the surface, it can sometimes make managing the account online (or via mobile) easier and less of a headache.
4. Easy to Access Debit Cards
Unlike a traditional bank, digital international platforms often offer debit cards at the time of opening. Since you’re opening online, these cards are then sent to your place of residence (or business) after the account is opened.
As a bonus, sometimes, debit cards associated with certain digital accounts can be used internationally without incurring high foreign currency charges. This can be useful for avid travelers or people who live in multiple jurisdictions.
But, it all depends on which digital bank you choose and their specific card offering.
5. Residence-Based Account Opening
In most instances, digital accounts can be opened relatively quickly online by verifying a few details and uploading copies of certain official documents.
Quick onboarding is one of the most significant advantages of digital banks, but it comes with a snag. Opening accounts with certain banks can be very challenging if you are not a resident of a specific country or region.
So, if you have the wrong residency, you might have to find a different digital bank, acquire another residency, or get an address in an acceptable country to get in. And, if neither of those options is possible (as is common for members of the Unlucky Passport Club), then sometimes a traditional bank is your only option.
How to Use Foreign Digital Bank Accounts
Like traditional bank accounts, knowing how you plan to use your foreign digital account after it’s open is an important consideration before applying. Knowing what your banking priorities are and how you’ll use the account in the future will help you zero in on the specific benefits you need and which options are best.
With this in mind, below we’ll share a few common ways foreign digital platforms can be used. We’ll also touch on some of the shortcomings of digital platforms and identify a few situations where a traditional bank might be a better option.
Use for Transactional Banking
As mentioned, a digital bank can offer less expensive international transfers, making them the perfect tool to facilitate transactional banking. Whether you have a business or just need to send and receive transfers regularly, these digital accounts can help you save significant amounts of money every month.
Use to Support Payment Processing
While most digital platforms would not be considered an alternative to payment processors, some quasi-digital platforms (e.g., PayPal) do enable you to manage funds while also receiving payments. Likewise, more mainstream digital options can connect to payment processing platforms, making them a viable option to support your business.
Do Not Use for Large Deposits
As we have stressed many times, you should not use digital accounts to hold large deposits. In most instances, a digital bank does not hold to the same standard as a traditional bank. This means, they do not have deposit insurance and accounts can be shut down without warning. These factors obviously present risks to both you or your business and could result in being cut off from your money indefinitely without notice.
Do Not Use for Higher Interest Rates
Similar to the last point, you should not use digital accounts to access interest-bearing deposits. The same risks of account closure and lax regulations apply. But the real reason for this is because of the extremely low rates that digital banks offer if they offer any interest at all. In most cases, you will be far better off considering alternatives at a traditional bank, even in the lowest interest rate environments.
Do Not Use for High-Risk Businesses (Maybe…)
Many owners of high-risk businesses look at opening digital international accounts as a viable alternative to traditional bank accounts. Well, that depends. In fact, it’s not as cut and dry as saying “yes” or “no”.
You see, in most cases, when opening a business bank account digitally, you sign a user agreement confirming that your business does not participate in high-risk industries. If you end up opening an account, and the digital bank determines that you are involved in a high-risk industry, your account will be shut down.
But in other cases, certain EMIs are actually set up to support high-risk businesses and they either turn a blind eye or don’t ask. The UK and all of its Russian-backed EMIs are good examples of this.
How to Choose the Right Banks
How do you determine which bank is right for you? First, you’ll need to identify which specific services you need, which country (or countries) you want to bank in (or transact with), and then determine whether or not you can actually open an account based on your current residency and address.
For anyone with residency in the EU, UK, or US, you’ll likely have a wide range of options available to you. However, a common stumbling block is providing proof of residency. This is especially true for digital nomads and expats without permanent residency. In addition to proving tax residency, you will also need to provide an address and a phone number from the region.
Assuming you do have residency, an address, and a phone number in one of these regions, then you’ll need to determine which of the following items are most important to you:
- Low-cost transfers
- Send and receive international transfers
- Online payment processing
- Connection to other payment processors
- Connection to traditional bank accounts
- Available currencies
- Here is a quick snapshot of several popular digital banking options and how they stack up against the above metrics:
Mercury Bank: US Business Bank Account for US LLCs
Mercury is a US-based digital banking start-up that has partnered with a US bank. They cater to US companies (typically small businesses focused on startups) in need of US bank accounts.
Like most digital banks, now that Mercury has been in operation for a few years, their opening process and compliance procedures have become more tedious. This has resulted in account opening taking longer and requiring additional verifications. This is something to keep in mind when applying for and opening accounts.
That said, if you’re looking into opening accounts for US LLCs, Mercury is a good option. But, as is the case with other digital banks, you should use them for transactional banking.
Alternatively, if your business is more substantive or you have larger deposits, you should consider pairing a Mercury account with a traditional account.
Having backup accounts is an easy way to hedge against future account freezes. Likewise, it protects you from ever-changing compliance procedures that can leave you financially stranded. By not putting all your eggs in one basket (aka using one bank for everything), you can ensure that you’ll always have direct access to your money no matter what happens.
If you want to know more about opening US bank accounts for US LLCs without physically traveling to the US, we can help. We help foreign non-residents find and open accounts at top US banks, international banks, regional banks, and even the best digital platform options. To learn more, just click here.
Revolut: Digital Bank Accounts in the EU, UK, & US
Revolut has been pushing the boundaries of digital banking since 2015. Initially starting as a prepaid travel card provider, the company is now an EMI that offers a range of products and services to EU, UK, and US customers.
In addition to standard features, Revolut also allows you to send money abroad in 30 different currencies. Not to mention, you have the decision to choose between free checking accounts, paid premium accounts, and more expensive metal accounts.
However, if you want to open accounts with Revolut you must be a resident and have an acceptable address and phone number in one of the jurisdictions they serve.
Additionally, while Revolut makes it clear that they are not a bank, they do have a European banking license, issued in Lithuania. And in the future, they plan to obtain a UK banking license as well.
Bottom line: Revolut can offer value to you or your business–if you can get in and live in the right country. Revolut is useful for those dealing with frequent transfers, multiple currencies, and who want lower FX rates.
Monzo: UK Digital Bank & Limited International Functionality
Monzo is a UK bank that caters to both individuals and businesses. Unlike many digital banks, Monzo actually has a banking license and offers deposit guarantees. They offer a range of accounts and allow for the set up of recurring payments.
But like many digital banking solutions, you need to be a resident in their operating region (the UK) in order to be eligible for an account. Another shortcoming of Monzo is that it can’t accept inbound international transfers. However, you can connect your Monzo account to Transferwise to facilitate international transactions.
So, if you’re looking for a digital account with an IBAN or you need to send and receive money internationally, this option won’t work for you.
If you are interested in opening an account in the UK for yourself or your business, there are options available, including remote account opening for foreign non-residents. To find out how you can get access to these options, just click here.
N26: EU Banking for Those in the EU
N26 is one of the more popular options in Europe. A major reason for this is that N26 provides a free account, gives you five free ATM withdrawals per month, and has no foreign transaction fees. But, naturally, anything “free” does come with some limitations.
If you want to send transfers outside of Europe, N26 won’t be much help. That’s because the platform only supports transfers through the SEPA network. Of course, if you only use it for European transactions, then N26 is a great option. And, if you need to send and receive transfers internationally, you can always pair an N26 account with Transfewise.
Alternatively, you could consider opening an account in the EU at a traditional bank for yourself or your business. This can be done remotely, regardless of your residence or nationality. You just need to know which banks to target and which branches and bankers to approach. Click here to learn how you can get started now.
Transferwise: International Transfers in 20 Foreign Currencies
Transferwise is an online money transfer service that connects with your bank account. It has a range of benefits that we think most businesses and individuals should strongly consider adding to their banking stack. It’s like a free “add-on” that makes banking better and gives you instant access to convenient, low-cost transfers.
While Tranferwise isn’t a digital bank in the traditional sense, it does have the “Transferwise Borderless Account”. This is a multi-currency account that comes with a debit card.
Of course, the vast majority of Transferwise benefits center around the fact that its users can easily (and affordably) send and receive international transfers. For example, Transferwise allows you to send international transfers in more than 20 currencies. Plus, you can send domestic transfers in more than 30 currencies.
For these reasons, Transferwise is a great tool that almost anyone can use to optimize banking and save on transfers. But, it’s not a replacement for a bank account and does have some limitations. And, while it’s an excellent tool for supporting international transfers, we wouldn’t recommend keeping significant wealth or large deposits here.
With this in mind, a better option would be opening an international account with a traditional bank. That way you get the benefits of a secure bank account, paired with the cost savings and efficiency of Transferwise.
If you want access to actionable information, tools, and the support you need to unlock the international bank world and build the most optimal banking stack for your situation, we can help. When you join GlobalBanks Insider, you get instant access to banks, direct banker contacts, account opening strategies, and much more.
A Final Note on Opening Bank Accounts
If you’re dead set on opening a digital account, the above options might serve your needs. But, which options you can realistically access will ultimately depend on your residency, how you plan to use the account, and what your objectives are.
Before applying, make sure you clearly understand the limitations of each platform. Also, make sure you review the account opening quirks and requirements for each.
Likewise, you need to protect yourself from constant account freezes, algorithmic compliance, regulatory issues, and lagging customer support. You can do this by having a well-thought-out banking stack, including a mix of digital and traditional banking options. This can include financially sound banks and backup accounts. Of course, you can also use fintech solutions and a range of credit cards. Plus, you should consider using strategic tools like Transferwise for increased efficiency and cost savings whenever possible.
Ready to Explore Your Options?
If you’re ready to explore your options, you can obviously use the information above to get started.
But, if you want to know which digital platforms will accept you, which account opening strategies to use for your situation, and which digital banking solutions and strategies are best for you, we can help.
If you’re ready to take action and start opening international accounts now, you can access GlobalBanks IQ, our dedicated international banking intelligence platform.
GlobalBanks IQ gives you everything you need to start finding and opening accounts for you or your business today.
When you join GlobalBanks IQ, you immediately unlock the GlobalBanks Database of international banks — home to 250+ banks in 50+ countries.
And, you get access to our library of premium (members-only) reports, including proven account opening strategies, country-specific banking options, and lists of banks for specific client types.
Plus, you unlock our account opening checklists, dedicated account opening alerts, and much more.
To get started, click here to see if GlobalBanks IQ is the right choice for you to start accessing the benefits of international banking today.