Full Review of N26 and Why It Is Europe’s Best Bank

There is one product in the consumer banking universe that I discovered around 2016 and it has not ceased to amaze me ever since. N26 made my life so much easier and saved me hundreds of Euros in transaction, conversion and BS fees your normal bank charges every day. Usually customers are not informed enough about the options that they have and sometimes the barrier to switch from the account you always had is just too high. While I understand that, I also know that this is the reason why banks can charge those ridiculous fees in the first place, making them rich and allowing them to have a mediocre product on the market. So if you like high fees, old technology, low transparency and poor service when something fails (especially while abroad) you should stop reading here!

What is N26?

N26 is the most valuable German start-up in 2019, so if you haven’t heard about them yet, here is a small summary. N26 is now a fully licensed bank that found a perfect balance between great functionality, modern and beautiful design and technology. They allow you to withdraw money worldwide, send money to your friends instantly, pay contactless without fees in foreign currency and benefit from the best FX-rates out there.

FREE ATM withdrawals. Worldwide.

When people travel abroad they usually face two options to get foreign currency:

  • Withdraw large amounts of cash at home and exchange that money either at home or at local banks abroad. This certainly is an option but carrying several hundred Euros of cash in countries with an above average crime rate might not always be the best idea.
  • Just get cash with your debit/credit card when you are abroad. This is also an option but over the years banks have perfected their system to rip you off in multiple ways. Foreign currency exchange fee, ATM withdrawal fee (from your bank), ATM withdrawal fee (from the ATM operator), etc. 

With the power traditional banks have over you they can invent and justify all the fees they want, someone has to pay their employees right? If you like it or not, with these two options you end up paying 5% to handle cash abroad. So everything is basically 5% more expensive. Spending 1000€ will cost an additional 50€. Do that 6 times a year and you lose 300€ and you get nothing in return. For the basic N26 account you get 5 withdrawals a month for free (in EUR). Other currencies are charged with only 1.7%. N26 Black will give you 0% and absolutely free withdrawals here.

N26 is partnering with TransferWise to offer foreign currency withdrawals around the globe for free. So what? For you this means you can withdraw cash at the real exchange rate, which is the exchange rate that banks use when sending money back and forth between each other. (Why are they only screwing customers and not other banks along the way?) But anyway, it’s the most accurate and for you the most favorable exchange rate you can possibly get. For you this is available at any ATM accepting MasterCard, from a worldwide perspective that is a lot of ATMs. Speaking of those places that accept MasterCard, you might think about skipping the cumbersome cash and pay with your N26 Card straight away because they won’t charge you a fee on foreign purchases and still give you the same rate. So you will pay exactly the same amount as your local friends with their local cards. Everywhere in the world, isn’t that just amazing?

More features for a banking experience of the 21st century

All of those features are nice but the N26 team has worked on it’s great app and included so many great features. Here is a list of the most important ones: 

  • Notifications In real-time.Whenever money moves in or out of your account, whether it is a transfer you’ve approved or a pre-authorized payment, you’ll get a notification on your phone.
  • PIN resets.Resetting your PIN at any time is as simple as logging into the app and changing it. No calling N26, no trips to the ATM. 30 seconds and done. The way it’s supposed to be.
  • Locking your card.Just like resetting your PIN, locking your card to block it for a period of time is simple. Log in and press the right button. Easy.
  • Payments abroad, online payments and cash withdrawals. For your security, you can turn these on and off at any time.
  • Spending and withdrawal limits. Another security feature that you can set and change in the app at any time.
  • Transaction categories. When a banking app is made by coders, as opposed to tech by bankers you get things like this. Every transaction is labelled and sorted in a category like “Bars & Restaurants” or “Travel & Holidays”. Makes life easy by keeping track of your expenses this way.
  • Apple Pay/Google Pay. Apple Pay is (finally) live in Germany and N26 is an early adopter. Add your N26 and pay anywhere in Germany that accepts Apple Pay, the same goes for Google Pay.

How to handle cash?

Cash26 is only available in Germany as of 2019 so I won’t spend much time on it. The idea however is smart and it is worth mentioning for those who are not ready to go 100% cashless just yet. Any time you visit one of N26’s 7,000+ retail partners across Germany (DM, Rossmann, REWE, petrol stations,…), you can select to either withdraw or deposit cash from the app. No need to buy anything. There is just a barcode that’s generated, it get’s scanned by the cashier and then they serve as an ATM. Giving you cash or accepting it as a deposit into your account. Again, once you tried it you’ll see just how easy and smooth it is. Cash26 withdrawals are always free, while for deposits the first €100 per month is free, for anything above there is a 1.5% fee.

How to send cash instantly – N26 MoneyBeam

N26 has built their own rival to PayPal or Venmo. It’s called MoneyBeam and allows you to send money to other people without knowing their bank details. Just knowing their phone number or email address will suffice. Of course some of your friends are N26 users and some are not. If the recipient is a fellow N26 user, they’ll receive the money immediately. Hit send and see a notification on your friend’s screen pop up. If they’re not using N26 yet, you haven’t been convincing enough yet and should work on your sales pitch. Just kidding, but they get a link to put in their details and it will take 1-2 business days for the money to arrive. So no hassle at the dinner table when spitting the bill. You can send the money you own down their way, they just need to accept it. If they don’t accept the MoneyBeam within 7 days, the transfer will be returned to your account. Of course, MoneyBeam is 100% free to both groups of friends.

How to invest money using Invest26

I am not using INVEST26 myself, there are better options like DeGiro for this. But again, it is a nice feature they built in and it is worth mentioning. If investing seems to complex for you initially this is a great way to start and you don’t need to leave the app. You can invest money straight into an investment fund with a few taps. This is interesting for two reasons. First, it’s dummy proof and set up in a way that you just need your N26 account for investing and getting the returns. You won’t need an additional investing account. Second, the close integration allows you to deposit and withdraw money at any time with no delays. Usually this is not so easy at other places like a brick and mortar bank where you would probably need to make an appointment first. I don’t recommend jumping in and out of investments every day though. To keep a peaceful mind your investments should have a long term horizon. N26 tries to help and visualize your opportunities with little diagram that shows what you can expect from your investment depending on whether you choose their pre-set boldbalancedor cautiousplan.

N26 Black and N26 Metal – is it worth it?

As mentioned before N26 Black will waive the 1.7% fee for foreign currency withdrawals. But it also comes with some pretty impressive insurance coverage:

-Medical expenses up to an unlimited amount if you have a medical emergency while abroad (No deductible).

-Expenses you incur due to a flight delay of 4 hours or longer, up to a maximum of €400 (No deductible).

-Expenses you incur if your luggage arrives more than 6 hours late, up to a maximum of €400 (No deductible).

-Reimbursement for a stolen mobile phone that was purchased with your N26 Black account, up to a maximum of €300 (€50 deductible).

  • Reimbursement for stolen cash if you get mugged up to 4 hours after withdrawing with your N26 Black card, up to a maximum of €500 (No deductible).
  • Extended warranty of up to one additional year on items purchased directly with your card and all payment methods associated with your card, such as a linked PayPal account, up to a maximum of €500 (€50 deductible)
  • Travel cancellation insurance on every trip before the trip commences, up to a maximum of €5,000 per trip (10-20% deductible).
  • Car rental insurance and public transportation accident insurance.

Unlimited medical insurance policies are almost unheard of, and they never come without a hefty, hefty price tag, except with N26: here it is alongside everything else for €9.90 per month. And in case you don’t already see the value in all of this, hear this: medical expenses, flight delays and luggage delays are covered for the first 90 days of your trip. Most credit cards cover up to maximum of 30 days if you have a premium card, so 90 days is an absolutely incredible coverage period.

From a purely quantitative standpoint, there is a clear breaking point: when you withdraw €582 of a foreign currency in a given month. Why €582? It’s simple. N26 Black saves money for everyone withdrawing €582 or more of a foreign currency in any given month. If you are a regular N26 user, you pay 1.7% on foreign cash withdrawals, which is a withdrawal of any currency other than Euros. If you’re an N26 Black user, you don’t pay any fee for those foreign withdrawals, but you do pay €9.90/month. So, if we divide €9.90 by 1.7%, you get €582, the monthly breakeven point that makes it financially worth it to you to get N26 Black. Of course, there are a lot of other factors that play in here as well, most notably the travel, medical and purchase insurance coverage that comes with N26 Black. That’s a bit tougher to quantify, though, since you can’t predict when you’ll need to use it, so this €582 breakeven point is a good reference.

N26 Metal, the bank’s ultra-premium offering, was launched in late 2017. All things considered, it’s fairly similar to the Black with a few additional perks, my two favorites being dedicated customer support for Metal members and partner offerings for special discounts with companies like WeWork, Hotels.com, IHG, Outfittery and more. That said, though, I haven’t yet felt the impulse to try Metal. The biggest perk of the card, of course, is the shock factor that your friends and others have when they see/hear you drop a metal credit card on the table to pay. The ego boost sounds appealing to some, but I don’t think it’s for me – from an economic/pragmatic perspective, the N26 Black is still the big winner here, so the rest of the post will be about that. If you do want to try N26 Metal, you can always try N26 Black first and then upgrade to N26 Metal within the N26 app.

N26: How To Open A Bank Account

With its impressive insurance policy, fee-free foreign cash withdrawals, and the app’s ease of use, I really couldn’t be happier as a member of N26 Black. It’s made banking a lot easier and cheaper for me, and solving a lot of the messy problems I had before, mainly expensive and vague travel/medical insurance policies plus spending nearly $100/month in subtle ATM and currency exchange fees.

To sign up, you just need to provide standard personal information (name, date of birth, etc.), a valid ID or passport, and an address within one of N26’s supported European countries. As I write this, the list includes Germany, Austria, Ireland, France, Spain, Italy, Netherlands, Belgium, Portugal, Finland, Lithuania, Latvia, Luxemburg, Slovenia, Estonia, Greece and Slovakia. Once you’ve signed up, verified your ID in the app and paired your smartphone, they’ll send you your free MasterCard in the mail. Mine took just 2 days to arrive, and it comes in a pretty sleek package.

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