Types of Alternative Accounts

Alternatives

Alternative Accounts

There are many non-bank financial institutions that offer products similar to a current account, without being classified as a current account. At Honest, we refer to these products as ‘Alternatives’.

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Dan Malone

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An account will be classified as an alternative by Honest if it meets any of the following criteria:

  • 1
    It’s offered by a financial institution that doesn’t hold a full banking license
  • 2
    It doesn’t support every feature that could reasonably be expected from a current account
  • 3
    Customer funds aren’t protected under a relevant Deposit Guarantee Scheme

Types of Alternative Accounts

Card Accounts

Card accounts are a unique alternative to a traditional current account. They function as a competitive secondary spending and savings tool that supplements your main current account. As they’re not a full-service current account, they don’t support features such as direct debits, transfers to other accounts or receiving salary. 

What they lack in the basics, they make up for elsewhere. Card accounts offer competitive interest rates on cash that can be actively spent, serving as a key differentiator to regular current and savings accounts. They also come with savings tools, like round up and cashback, as well as low or no exchange fees for foreign card spending.

Please note: We are actively expanding this section of Banking to include more alternatives including Credit Unions, An Post Money, Wise, Monese and Remitly.

Alternative Accounts Ireland Switching Guide

Unlike with Current Account Switching, alternative accounts should supplement your primary bank account. This means you don’t have to do the same level of switching as you would for a current account. You just need to complete the onboarding process, which typically takes a couple of minutes.

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    Are Alternative Accounts Safe?

    While the institutions offering an alternative account may or may not hold a full banking license, they are perfectly safe for use. Many of them are Electronic Money Institutions (EMIs), Payment Institutions (PIs) or Investment Firms. They may not be banks, but they still require authorisation to operate in the EU. 

    It can take years to satisfy the regulator that the business is fully compliant and safe for consumers to use. Once obtained, the firm then has to continue to report to the regulator on an ongoing basis to prove that the business continues to be compliant with regulation. 

    This is great for Irish customers because they can take comfort in the fact that every regulated alternative is being subjected to the highest of standards. That’s exactly what you should expect from any company you choose to keep your money with.

    Frequently Asked Questions

    Alternative accounts can offer a range of benefits including cashback, no foreign exchange fees and high interest. That’s in addition to regular features like ATM withdrawals, virtual debit cards and savings tools.

    Yes, provided they’re regulated. While the financial institution may not be authorised as a bank, they will be required to be regulated to offer money services. This means they’re subject to oversight by European central banks.

    It depends on the financial institution. Money held with the likes of Trade Republic or Credit Unions are covered by the Deposit Guarantee Scheme. Trading 212, Monese, Wise and Remitly would not be covered.

    Yes, most alternative accounts come with a fee. However, many of these fees can be avoided entirely by using the free features of the account. You can find more information on a provider’s fees by reading their associated guide on Honest.

    It can be a good idea. You could have a digital current account for receiving your salary, paying direct debits and splitting bills. For spending, you could have a card account with a provider that offers competitive cashback and interest.