Revolut Trading Review 2022 | is it Safe for Irish Investors?

  • By: Walter Dunphy ACCA
  • Date: February 12, 2022
  • Time to read: 6 min.

“I’ll Revolut you” has become part of the Irish lexicon since Fintech company Revolut entered the Irish market and disrupted the banking industry. A knock-on effect of the tremendous growth of Revolut has been that more people than ever in Ireland had easy access to the global stock markets and cryptocurrencies. This has introduced many people to investing who may have never considered it previously.

As you may have never invested before, we will take you through everything you should be aware of when using Revolut for investing in Ireland. Including what you are getting with it and what you are missing out on.

HIGHLIGHTS AND LOWLIGHTS

HIGHLIGHTS LOWLIGHTS
Beginner friendly, easy to use Limited Choice – No ETFs, Bonds, Options, Futures, CFDs, Spreadbetting
Your trading account is linked to a bank accountYou are not covered by an investor compensation scheme
You can instantly transfer between your current account and trading account Basic charting
Voting at Annual General Meetings of Stock you own Monthly membership is required to get low fees
Fractional share investing
Great Customer Service

Let’s run through the key features

When you are trading with Revolut from Ireland you have access to 1,000+ US stocks listed on the Nasdaq and New York Stock Exchange as well as 50+ cryptocurrencies and Commodities such as Gold and Silver. Most investors are quite happy to stick with investing in US stocks, but if you are looking to invest in Irish or UK companies then you will have to go with trading platforms such as Degiro or Trading 212.

When searching for stocks to invest in, you can easily find the most popular/ most traded stock picks based on other users preferences and also several collections for each industry ( e.g Tech, Energy).

The Revolut trading platform can be accessed via the mobile app or through the web. A big plus for Revolut is its convenience, as you have your personal current account and trading account all in one place it makes it very easy to transfer funds over and back in an instant. Any excess cash that you won’t be needing for the next few months can be transferred over and invested to hopefully grow in the meantime until you need it.

Another great feature for beginners is that Revolut offers fractional share investing, which means you can invest in companies with high ticket share prices such as Tesla and Amazon with as little as €1.

Revolut Stock info features

The platform has additional features that allow you to do some high-level research on the companies you want to invest in such as charts, fundamental indicators, financials, stock-specific news and analyst rating ( see above screengrabs for examples of these).

Revolut does not currently offer any ETFs on their platform in Europe, this may change soon as they are will be offering ETFs to US customers when they launch there. ETFs are a staple and less risky method of investing, if Revolut can add this in future it will increase its popularity even further. If you are a more advanced investor looking to invest more complex instruments such as Options, Futures, Bonds and CFDs you may need to look elsewhere.

If dividend investing is what you are into, then be assured you will get paid out on any dividend distributions from any dividend-paying companies that you own. When you are setting up your account make sure to correctly fill out the W8-BEN form, this will reduce how much tax is deducted from your dividend payments from 30% to 15% for Irish investors. This is covered in more detail in another blog post (linked at the bottom of this page).

When executing a trade on Revolut there are three different order types that you can use – Market, Limit and Stop Order.

  • Market Order: Buy/Sell the stock at the best available price on the market at the current time.
  • Limit Order: Buy/Sell sets the minimum price you are willing to accept for your trade.
  • Stop Order: Buy/sell market order will only be triggered when a stop price has been surpassed.

Although the product offering is basic on Revolut, what they do offer is very suitable for beginners, customers with even zero financial experience will be able to invest with ease with no complications.

Crypto on Revolut

Although buying crypto is convenient on Revolut there are some downsides compared to buying crypto with a regular Crypto Broker such as Coinbase, Gemini, Binance etc.

Firstly you cannot move the cryptocurrency from Revolut to a crypto wallet, so you do not have custody or control of your own private keys. This will mean you will not be able to use your crypto in such things in Defi. You can however send Crypto to other Revolut customers.

Revolut has been beta testing the ability for customers to send their crypto to an actual crypto wallet with UK customers (Bitcoin only), but at the time of writing this is not available for Irish customers.

We have dedicated a full blog post to trading Crypto on Revolut that will cover this in more detail.

What are the fees?

The below table summarises the fees for stocks, crypto and commodities.

Asset TYPE STANDARD PLUS PREMIUM METAL
Membership Fee Free €2.99 p/m €7.99 p/m €13.99 p/m
Stocks
# FREE TRADES 1 free trade p/m 3 free trade p/m 5 free trade p/m Unlimited
Commissions (when over free trade limit) 0.25% or €1.00* 0.25% or €1.00* 0.25% or €1.00* n/a
Custody Fees 0.12% 0.12% 0.12% 0.12%
Crypto
Flat % fee buy/sell 2.50% 2.50% 1.50% 1.50%
Commodities
Flat % fee buy/sell 1.50% 1.50% 0.50% 0.50%

*greater of 0.25% or €1 – This fee is charged in USD using the FX rate at the time of receiving the order.

Custody Fees: these fees are charged monthly (annual rate of 0.12%) on the total market value of assets you hold on the account.

Is it Safe?

One of the biggest questions you rightly should have when choosing a trading platform is how safe it is.

Revolut provides ‘execution-only order transmission services’ – what this means is when you place an order with Revolut they will send these to a third party who will execute these trades and keep custody of your investments (DriveWealth LLC based in the United States).

As Drivewealth is not a registered broker in the EU your investments are not protected under the usual Investor protection schemes, which you would be if you are trading with Degiro, Trading 212 and Etoro which cover your investments up to €20k in the event they go bankrupt.

Drivewealth is regulated by the Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA) – therefore Revolut as a creditor of Drivewealth will have certain entitlements in the event Drive Wealth were to get into financial difficulty. This is not the ideal situation for Revolut customers but it is unlikely an event such as this will happen.

The trading license Revolut are operating under in Europe is a Category B securities broker license.

December 1, 2021 the Bank of Lithuania granted UAB “Revolut Securities” category B securities broker license. The license allows reception and transmission of client orders, safeguarding of client funds and securities, provision of investment management and investment advisory services.

Source: https://ecovis.lt/revolut-got-brokerage-licence-forinvestment-management-in-europe/

Revolut recently has been issued a banking license in Lithuania – up until then it was operating under an emoney license. This results in far more assurance for the customer cash balances on Revolut. Deposits held within Revolut Bank are covered by a deposit guarantee protection of up to €100,000 under the Lithuanian Deposit Guarantee Scheme.

The Final Verdict

Revolut is a great gateway to investing and they are constantly innovating and making their offering better and better. If you already use Revolut for banking transactions then you will be able to give it a test run to see if it meets your needs. It should offer plenty for anyone new to investing.

For the more advanced investors and those investing with large sums of money, you may have to look elsewhere as Revolut might have everything you need. Although there is currently no investor protection scheme this looks like it will be in place for customers sometime in the near future. Customers who use brokerages such as Degiro, Etoro and Trading 212 have their investments covered up to €20k in the event that the companies should fail.

MORE READING ON REVOLUT….

Disclaimer: this blog post is for informational and educational purposes only and should not be construed as financial advice.

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