IWBank and IWPower: review
IWPower is the saving account of IWBank, well known italian online bank. But unlike ING Direct’s Conto Arancio or Santander Consumer Bank’s deposit account, IWPower is available only to IWBank customers. Therefore in this post we discuss both IWBank bank account and IWPower saving accoung, sincethey are so closely linked.
IWBank, as I said, is an online bank, especially focused on investors or trader. But even as a plain bank account, their offer is to us very interesting, since it has some peculiarity:
- Bank transfer are free (usually in many other banks there is a fee of €0.50 or more), including cross-border transfers inside the European Union.
- There are no charges for ATM withdrawals (some banks charges for withdrawals from others bank’s ATM fees that may exceed the €2.00)
- (almost) no annual fees. I said “almost” because (apart from the paid-services you can activate), we must not forget that, however, since IWBank is a bank account you need to pay the italian annual tax (€34.50). Of course, this isn’t an high expense, but the bank account is not completely free as one may think.
- IWBank is one of the few banks that digitally signs e-mails. We think this is very important since it greatly reduces the risk of phishing (if you see a mail is not signed, you know that it is not reliable)
- Allows you to access a high variety of investments: worldwide equities, funds (over 50 management houses, for a total of over 1,600 funds), bonds, ETFs.
In my opinion, IWBank has also some disadvantages:
- There are costs (between 1 and 3 euros) for some services such as deposit cheques, or tax payment.
- From the security point of view, the login technique leaves some small concerns: it’s used an optional virtual keyboard system, (where the keys have whenever random positions) but unlike other cases, where there are only numbers, IWBank’s virtual keyboard includes letters and numbers, so it can be extremely annoying to try to understand where he placed a letter or number.
- Always talking about security, you can also use a security token-based login system, but this is additional service: you can use the token only if your total assets (cash, funds, etc.) are more than 25,000 euros. Furthermore, token shipping is paid by the customer (€15).
- Nominal interest rate active of the bank account is 0 (zero), so it’s a need to use IWPower saving account.
Now that we’ve seen how the bank account works, let’s see pros and cons of IWPower saving account.
- High interest rate: 3.75% nominal, and capitalised even monthly, which means a net annual effective rate of 2.585% out of (italian) taxes. For comparison, ING Direct’s Conto Arancio gives a 2.19% net annual return.
- The saving account is a sight deposit, meaning that you can transfer your money from and to your bank account with no holding period.
- It’s possible to lockup the money for limited periods of time (30-90-180 days) , to get even higher interests (respectively, 3.19%, 3.24%, 3.30% net annualized return). Be careful, however, if you lockup some money and then you want to withdraw it before maturity, you can do it, but you do not receive any interest (i.e. if you lockup 1,000 euros for 30 days, and then withdraw them the 29th day, you recieve 1,000 Euros). For these investments, there is a “minimum cut ” of 1,000 Euro, while there is no limit for sight deposits.
IWPower is a veri profitable saving account: it’s main shortcoming is that it’s accessible only for IWBank customers, and therefore you need to open a bank account to take advantage of IWPower.
Italian translation of this post: IWBank e IWPower
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