ieExplains: What is Raisin Bank and is it safe?

Is Raisin Bank's new starter account offering 3.1% interest too good to be true?

Founded in 2012, Raisin Bank is a German online financial platform that established itself in Ireland in 2019. (Photo illustration by Alexander Pohl/NurPhoto via Getty Images)

German-registered fintech platform Raisin Bank has launched its new Raisin Starter Account in Ireland which it says gives new customers more competitive rates than those currently on offer across the Irish market. 

The account offers a fixed interest rate of 3.10% AER for three months on deposits between €1 and €100,000. 

But what is Raisin Bank and is it a safe place to keep your deposits?

What is Raisin Bank?

Founded in 2012, Raisin Bank is a German online financial platform that established itself in Ireland in 2019. 

The platform offers access to savings accounts across the EU, UK and US, with a list of the rates from various banks displayed to users on its website. 

It's latest product offering, the Raisin Starter Account, is targeted at new customers in Ireland and is offered by Raisin itself, instead of a third-party. 

The product offers a three-month introductory fixed interest rate. Funds are available throughout the three-month period and top-ups and withdrawals can be made. 

Is Raisin Bank safe?

Raisin Bank is listed on the Central Bank's register of credit institutions as one that is authorised in other Member States of the European Economic Area to carry on business in the State, without receiving further authorisation from the Central Bank of Ireland.

Customer deposits for its new starter account are covered by the German statutory deposit guarantee scheme, in accordance with EU law. 

If customers are using Raisin to access products offered in other countries, it is important they research each product carefully.

Is the new Raisin Starter Account worth it?

The starter account is an introductory offer by the platform and is part of a bid to expand the company's customer base in Ireland. 

The offer is being advertised as a way for Irish customers to earn up to €775 in interest over three months, without needing to meet strict criteria or go through onerous account opening processes.

Given the low deposit rates on offer across Ireland's pillar bank, the accounts 3.1% AER is competitive.

However, and most importantly, once the three-month period has ended, the interest rate will revert to 0%.

Customers can then choose to withdraw their funds or transfer them automatically to another demand deposit with one of Raisin’s partner banks.

In addition, while Irish customers are not subject to any tax in Germany on interest earned from Raisin Bank, Irish customers remain subject to taxation on interest income in Ireland.

As a private investor, it remains the customer's responsibility to declare any interest income earned outside of Ireland in your tax return to Revenue.