Online banks have been successful on the French banking market over the past years. They offer the benefit of charging very low bank fees, enabling you to save up to €250 per year. This guide will help shed light on these banks, to help you choose the one right for your needs and budget.
Note that you need to already have a French IBAN before opening an online account in France. What's more, you will have to provide proof of ID, proof of French address and in some cases, a proof of French income. Boursorama Banque is the only online bank that accepts customers who are not fiscally resided in France and without any proof of French income; this bank also accepts EU IBANs. Keep this all in mind as you read on and before you consider signing up to an offer.
What exactly is an online bank account?
An online bank is a bank with an entirely Internet-based mode of operation. All processes and actions, such as opening or closing an account, contact the customer service, obtain a mortgage, are done directly on the bank's website.
These banks are also very focused on customer service, more so than traditional banks. Indeed, their advisors are available to contact by internet or by telephone, to help clients deal with their various queries.
Thanks to this modus operandi, online banking companies avoid a lot of structural costs and are thus able to save a lot of money. This is how they are able to offer their particularly attractive rates.
What services do online banks typically have to offer?
Maybe one of the weakest aspects of online banking: the number of offers and services they provide (although these are progressively expanding overtime).
You will always, at the very least, get access to both a current account and an associated credit card, either Visa or Mastercard depending on the bank.
Other services often included are life insurance, savings plans, consumer and real estate loans, once again varying from one bank to another.
To whom do online banks belong to?
Online banks are very often subsidiaries of a traditional French banking group, which is a reassuring factor for clients as this keeps them protected in regards to a potential solvency and the security of their accounts.
However, the other side of this means that online banks often have limited leeway and limits in terms of independence.
How safe are online bank accounts?
It may at first feel a little scary to sign up to an entirely Internet-based bank, with no physical agencies. But rest assured that online banks are very reliable and are extremely regulated and supervised in France.
Indeed, in order to operate, French online banks need to obtain a certification granted by the ACPR, a French Prudential Control and Resolution Authority. The bank also needs to join and contribute the the FGDR, the Guarantee Fund for Deposits and Resolution, which will ensure that its clients are insured up to €100,000 which is the same as with any traditional bank.
Moreover, as explained above, the majority of these online banks are actually the property of conventional, network banking groups, meaning their risk of going bankrupt is near to null. In terms of transaction and personal data security, it is good to know that sensitive data of this kind is extremely regulated and framed by both French and European laws. This means that, with an online bank, you are no more likely of being subject to fraud (theft, phishing...) than with any other type of bank.
Online banks: main benefits and drawbacks
It is important and necessary to understand both the positive and negative aspects tied to French online banks, to be able to assess whether this alternative may be suitable for you.
Pros and cons of holding an online bank account in France
Online banks accounts: the pros
There are multiple advantages to opting for an online bank.
For one, as these banks don't have any structural costs to consider, many operations are free and seamless, such as the opening of an account or obtaining a credit card, and what's more, you will avoid paying maintenance fees.
In addition, online banks are continuously innovating to attract new customers and better meet their clients' expectations, by for instance expanding their services, tailoring their offers to different profiles (professionals, students, minors, travelers, and so on).
Another perk: the welcome bonuses, set to €80 on average and even up to €200 for some! And what's more, you will often find that saving accounts have very interesting rates and that life insurance contracts are free of fees.
Customer service is at the heart of online banking, with advisors always reachable online or via the bank's app to help answer your queries. It is thus no surprise that these banks are regularly awarded prizes for their support team's quality and availability.
Online banks accounts: the cons
On the other hand, there are drawbacks to online accounts which you should be aware of.
Among the disadvantages of online banking is the reduced range of banking products and services compared to traditional banks.
Some customers also have an issue with the lack of human contact entailed, while others take issue with the fact you cannot deposit cash or cheques into your account, because of the dematerialised nature of the banks.
It is important to note that there are barriers to entry set by some banks, such as minimum income, savings or deposit conditions to meet, making them out of reach for anyone with a low income.
Finally, online banks may start being threatened by digital banks (or "neobanks") which are progressively entering the market, as they are very similar to online banks but provide an even more fluid user experience and don't set any minimum income or deposits.
Tariffs set by online banks
Here is all you need to know about online banks fees and tariffs induced by opening and holding a bank account.
Is it free to own a French online bank?
Not exactly - holding an online bank is not completely free as some banking transactions still incur fees. Therefore, contrary to traditional banks, you won't normally be charged for:
- Your bank card
- The maintenance of your account
- Intervention commissions
On the other hand, you might be charged for the following:
- Exceeding your authorized overdraft
- Withdrawing cash outside of the Eurozone
- Making payments outside of the Eurozone
- Renewing your bank card before it reaches expiration
- Resetting your bank card's PIN code
You may also find you have a fee to pay if you don't make a set number transactions a month with your credit card, especially if you are signed up to an account with ING Direct, Boursorama Banque or BforBank
How to open an online bank account
Think an online bank might be the right alternative for you? Read on to find out how to proceed to open your account.
Is it easy to sign up to a French online bank?
Yes, more than ever! The process takes about 10 minutes, during which you need to fill in a registration form and submit supporting documents (ID, income, address...) on your bank of choice's website.
Your file will be reviewed by an advisor within a few days, and if it meets the bank's requirements then you will be set up with a current account (you may have a one-time fee to pay in exchange), and you will receive your associated bank card by mail.
Just take note that you need to own a French (or sometimes EU) IBAN from a traditional bank prior to opening an online bank account.
What if I'm switching to an online-based bank?
If you are leaving a conventional bank to sign up to an online bank instead, your new bank will take care of all the banking mobility operations for you free of charge, as stated by French law. This means that your online bank will, for instance, redirect your Fs (income, direct debits, taxes, etc.)
To proceed to these operations on your behalf, you will be asked to sign a mandate ("mandat de mobilité bancaire"). This will enable your new bank to get in touch with your creditors (your employer, the French benefits system...) or debtors (energy provider, phone provider...) in order to notify them of your bank domiciliation change. All in all, thanks to this free service, everything will be taken care of for you!
Conditions required to open an online bank account
Have in mind that just like traditional banks, online banks sometimes have a set minimum income you need to meet to open an account. In this case, you will have to provide proof of a monthly income which varies from bank to bank:
- Hello Bank: €1,000 per month minimum
- Boursorama Bank: €1,000 per month minimum
- Fortuneo: €1,200 per month minimum
- BforBank: €1,600 per month minimum
Conclusion on final thoughts
If these requirements are out of reach for you, consider instead ING Direct, Monabanq or Orange Bank, which don't ask for any minimum income. You can also look into neobanks, such asN26 or Revolut.
Besides, some banks may also require that you make a certain amount of payments per month, in order to get a free credit card and/or benefit from the welcome bonus. Always check the bank's T&Cs to make sure you will be able to fulfil these conditions!
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