Are your bank’s savings accounts returning close to zero returns? Are you concerned about your money sitting idle at the bank while other people put their money to better use? Let me then introduce you to Iban wallet, a new kind of online investment platform where you can earn between a projected 2.5% and 6% yearly on the money deposited.
❔ What is Iban Wallet?
Iban Wallet is a European fintech company that provides an online investment platform that allows users to invest in several products with different interest rates and terms by offering a hassle-free, passive management experience. Iban’s projected returns range from 2.5% to 6%.
Iban is a global online marketplace for investment. They provide investors with a transparent way to get a return on their funds. Their mission is to facilitate the free and efficient movement of capital. With Iban, investors can invest in different types of asset-backed investment products with different terms and returns.
Iban acts as an intermediary to the lending process, providing the tools and security for all involved. Borrowers can easily apply for a loan, supported by their credit information and collateral. Loan originators working with Iban will select only the best applicants and present these loans to Iban. Instead of allowing you to invest in a specific loan, they do the hard work for you and aggregate many loans together – you have access to a much simpler approach: an iban account.
👥 How do users become investors with Iban wallet?
This platform boasts a sleek design and seamless experience across all devices (web, android, and iOS). Iban wallet has country-specific websites with an experience tailored to the user’s nationality and account currency. Customer support is offered in more than 3 languages and they are aiming to expand to even more.
Creating an account in less than 5 minutes:
Requirements: to be at least 18 years old and be a resident in one of the countries in which Iban offers its services.
Adding funds to your account:
The minimum investment amount is as little as 1€/$ !
To fund the account the investor can either use debit/credit card (only needs to insert card details) or choose a SEPA transfer.
Iban currently offers accounts in EUR, USD, and MXN.
- Platform experience:
The investor can select one of the four products available. These accounts have different expected projected interest rates (up to 6% AER), minimum investment amounts and terms.
As is customary with online investment platforms, movements from and to an Iban Account can only occur if the Iban Account and the bank account share the same holder name.
This means, for example, that the user cannot receive or transfer from another person directly in an Iban Account. They would have to receive that amount to their own bank account, and then invest it themselves with Iban Wallet.
How is Iban Wallet Different Than Others?
On the surface, the model seems quite similar to P2P lending.
Lenders provide funds, the platform intermediates the process, transferring the funds to loan originators that underwrite loans and issue them to borrowers.
Did you spot the difference already? It’s easy to miss.
Let’s say this again: loan originators underwrite loans and issue them to borrowers.
When you or anyone invests through Iban Wallet, the loans have already been issued. The loan originators are already contractually bound to the loans, they are not waiting for enough capital to be raised to fund a specific project.
Moreover, each investment is diversified and associated with several aggregated loans.
While this may result on a lower interest rate than one might find on P2P platforms, it also enables Iban Wallet to offer a higher degree of liquidity to investors, as they are able to request a withdrawal of their funds at any time (keep in mind that an early cancelation fee may apply if funds are withdrawn before their term on some products).
And that explains where the loan originators’ motivation lies: they typically charge higher interest rates to borrowers than the ones available through Iban Wallet. It’s in this differential of interest rates that marketing and operational costs are covered, as well as their profit margin.
💶 What are the fees?
There are no fees for you as a user, including transfers and withdrawals. This is great news, as we are seeing lots of banks nowadays trying to fleece their clients with monthly fees, set up fees and penalties for closing their account. You’ll get none of that crap with Iban wallet.
🤺 How is the user protected?
Iban wallet protects users’ funds via 3 methods:
- Your funds are deposited in an Electronic Money Institution (EMI) regulated by the European Central Bank.
- All investments are backed by collateral (asset/property).
- All loans are protected by a Buyback Guarantee and a Safeguard Trust.
Let’s get deeper:
We can start with the concept of diversification – Iban wallet works with an extensive pool of
loan originators from various geographies, who offer multiple types of loans, return rates and
deposit terms. Iban also checks, through an extensive due diligence process that every loan originator follow strict risk standards.
On top of that, when you invest with Iban, all of the funds are automatically deposited in an EMI (Electronic Money Institution) which complies with the corresponding European Regulations.
Another way to mitigate risk is by reinforcing and building new investor protections. All of the loans Iban invests in are asset-backed. What does this mean? It means that Iban only invests in loans that have collateral – if the borrower were to fail the repayment of the loan they hold, the loan originator would redeem the property (collateral) in order to settle the debt.
Furthermore, every Iban loan is covered with a buyback guarantee, therefore, should a borrower incur a delay of 90 or more days, the loan originator would be obliged to repurchase the loan from the investor at the nominal value of the principal and the accrued interest income till the date of repurchase.
On top of the above-mentioned security layers, Iban wallet also offers the safeguard trust – a provision of funds set aside on a monthly basis which would be used to cover losses that the other protections in place were not to be able to fully mitigate.
Let’s talk about risk management
Having taken a general look at the basic user protection practices in place, let’s dig deeper into risk and see how this platform handles risk.
The first action happens on the loan originator level. Although each loan originator has its own set of subscription and credit scoring policies, they are supervised by Iban Wallet so as to ensure that they partner only with entities observing consistent credit scoring models. Iban’s monitoring of loan originators’ metrics is ongoing, and not just carried out at the beginning of the business relationship.
Next, we move on to the structure of the products themselves. As you may have noticed by firsthand experience, with Iban Wallet users don’t select any specific loan on which to invest. This is not only because this is handled automatically, but also because all investments are tied to the performance of an aggregated bundle of loans. By doing this, it is possible to get further diversification to account for any eventual default.
And speaking of defaults, we arrive at our third measure: all loans in which users invest through Iban Wallet are asset-backed. Meaning that there is always collateral involved; physical property that can be sold to cover that default.
🗄️ What types of accounts are offered?
Accounts are invested in asset-backed loans, have a Buyback Guarantee and a Safeguard Trust which has covered all bad loans since it launched. The Buyback Guarantee allows Iban wallet to offer a projected interest rate making their accounts the perfect products to grow your savings.
As mentioned earlier, you can start investing by just putting €1, so you can feel free to test out these accounts with small amounts. Interest is aimed to be accrued every day and there is no minimum term for the Iban account, so nobody is going to stop you from taking out your money when you desire to do so.
So let’s take a look at the options offered:
The basic account is called Iban Account and is the one that’s recommended to start off with for the first few days and weeks while you test out the waters. If you’re happy with how everything works, you can put in more money and access better returns, like those offered by the One, Market, and Dynamic accounts.
As you can see, with the latter three accounts you get projected higher returns. You will, however, have to agree to a minimum term (1, 3, or 5 years respectively). I think that’s fine. If you have a net worth in the six or seven figures, you can easily afford to park €50,000 or more of that into an account for 5 years when in return you’re getting 6%. If your cash net worth is more like €80,000, then I would suggest sticking to the One or Market accounts.
When you put your money in Iban, it’s best to adopt a long-term perspective. This is no get-rich-quick scheme and it’s very clear on the website that investor protection and sustainable returns are what Iban wallet is after, for everyone’s benefit.
New in 2020 are the short term accounts:
- Iban 30
- Iban 90
- Iban 180
The team at Iban has taken investor feedback and given us a solution for those of us who are not able or willing to commit to an investment for 1 year or more, especially in these shaky times we are going through.
So for these new accounts, we can invest for 30, 90 or 180 days respectively. The longer we commit the better return we get, as always. The other great feature is that there is no minimum investment amount required, so you can start with just €1.
📱 Iban wallet Mobile Application
The Iban wallet mobile app is an easy way to manage your investment and keep on top of things without needing to login to the website. It’s much more convenient in my opinion and a plus for this investment platform.
It is available for both Apple and Android devices, so nobody is left out.
⚖️ Pros and Cons of Investing with Iban wallet
Now that we’ve discussed Iban wallet, at some length, let’s summarise the pros and cons of investing your money with Iban Wallet.
- Low investment requirement – start with €1 with no term limit
- Strong investor protection
- Great app for both Android and iOS
- Daily interest
- High liquidity
🤔 My Thoughts on Iban wallet
I think Iban Wallet need to improve their wording and make a clear distinction between the basic Iban account and the rest of their investment options. There are some restrictions on the other accounts that should be made clearer from the start. For example, on all accounts apart from the Iban account, you have an early termination fee of 2.5% (exceed the accrued interest at the time of the cancellation, so you always keep your initial investment).
Having said that, I think this platform is an excellent alternative to keeping money in the traditional bank accounts which don’t give us any interest anymore, and on top of that charge fees like monthly fees, set up fees, closing fees and transfer fees.
Banks are no longer the safe havens they once were; we’ve all seen how many of them went into trouble during the past financial crisis. They are still safe places to store money, but nowadays I try to diversify as much as possible, especially now that I’m young and I am chasing returns rather than just parking my money somewhere and letting it be devalued through the effects of inflation.
That’s why I think that it’s a great idea to put money into a platform like Iban wallet, which is a slightly riskier place to put your cash compared to a bank, but on the other hand, it gives much higher returns.
When you invest with Iban, they take the role of expert and manage your investments for you, selecting the best market opportunities, which often adds far greater protection than when the investor chooses individually the loans to invest in.
On top of this, they secure your funds with multiple protection layers, such as asset-backed loans, underwriting policies and buyback guarantees. However, they offer an extra protection layer – the safeguard trust – a provision of funds set aside on a monthly basis which could be used to cover any losses that the other protections in place aren’t able to fully mitigate.
Remember that with investments, one of the fundamental principles is diversification. Iban wallet allows you to have passive portfolio management as opposed to risky, variable returns and active management portfolios.
📣 Campaign of the Month
This means that instead of the usual 2.5%, you are now able to get a 4% projected interest rate with no minimum deposit required and with all the benefits and flexibility this account brings.
Here are the full conditions:
The bonus will be attributed as soon as your deposit is confirmed on your Iban account. It can be applied instantly for deposits made with debit/credit card, or take up to 3-business days for bank transfers.
Make sure to insert the code when topping up your account. When selecting the amount to deposit, you should see a field “Promo code” right below.
To recap, some of the benefits of investing with Iban:
- Interest updated daily and directly in their account;
- Chance to start with only €1;
- The ability to request a withdrawal at any time;
- No service fees or commissions of any kind.
Have you invested with Iban Wallet? How is it going for you?
I like what Iban wallet are doing. They have created a different take on P2P lending and packaged it in a format that most people are more used to, that of savings accounts. It’s important to understand that these are different savings accounts than those that your bank provides, and that the risk is higher. However, the returns are also correspondingly much higher, and I feel that it’s a good trade-off.
- Very innovative platform
- Good support
- Excellent website
- Different risk profiles catered for
- Platform is quite new