How safe are the USD and EUR funds in Revolut?


#1
  1. If I deposit some USD, I see I’m getting an IBAN at Lloyds, which I understand it’s a common (not personal) account. How safe is this? Are the money covered by some sort of insurance?

  2. If I deposit some EUR, I see I’m getting a GB IBAN, which I understand it’s a personalized account. How safe is this? Are the money covered by some sort of insurance?

Thanks!


#2

In some cases, you’re protected better with e-money companies, in some cases worse.

No insurance, but other than banks, e-money companies don’t have access to customer’s funds.


#3

Have read here

https://www.revolut.com/help/more/security/is-my-money-safe


#4

Thanks, I have already read that, but I was looking for more details before topping up.


#5

If you really want to go into it, here’s a research paper by BBVA about it.<


#6

Thanks, that looks quite comprehensive, but it’s more of a general overview. Revolut should release a document providing all the safety and security details regarding keeping your money with them.


#7

This is going to change relatively soon once the banking licenses are granted. So I would not expect something more detailed than they already have said about it.


#8

Yeah, hope they get the license soon.


#9

I am not sure whether a banking license makes funds held by Revolut ‘safer’. A banking license effectively allows the banking institution to lend out a portion of the deposits. In order to safeguard against this risk, there is a deposit guarantee scheme. An e-payment institution does not lend out the money (they are not permitted to), therefore it is not exposed to that risk.

What I would say is that you should exercise prudent caution, but for everyday payments, for which it was designed, yes, we as consumers should consider it as ‘safe’.


#10

I much prefer the risks of being a bank and having the deposit guarantee scheme. Being an e-money institution, you have the risk of the “Tier 1” bank they store the funds in going bust and the money is lost.

I’m not saying it’s likely, but it’s a risk


#11

So would you deposit more than 1000 USD/EUR/GBP in Revolut or do you think it’s not safe enough yet?


#12

This is far from my area, but are you sure that monies held in a custodian segregated bank account would not fall under the deposit guarantee scheme in case of insolvency of the custodian bank? (I don’t know the answer to this)


#13

Personally, I do hold more than 1k in Revolut. But it depends on personal circumstances, i.e. what is your total cash position in Revolut? “Don’t put everything in one pot”.


#14

I am sure, the protection is actually pretty restrictive in whom it covers. For individuals there are a lot of financial products not covered, including some savings products and for businesses only covers small businesses.

Basically, if say Lloyds Bank were to to bust, you and everyone of us are not Lloyds client, Revolut is, and as such there is no deposit coverage for the funds


#15

I dont want to tell anyone how to manage their money. With that said, the world economy is in a good place and so are the banks and Revolut is probably only months away from becoming a full bank anyway…