2. Which French Bank?
2.3. Internet Banks in France
There are a growing number of exclusively on-line banks in France, and within the last few years they have become a strong alternative to the traditional High Street branch.
In reality, however, many of them are off-shoots of the main banks!
Between them, the on-line banks in France now have around 3 million customers.
The most notable of these banks are:
- Axa Banque
- AGF Banque
- Boursorama Banque
- ING Direct
- Hello Bank
- Orange Bank
- EKO Banque
- Compte Nickel
The market leader is ING Direct, which has over 1 million account holders in France
However, of this total there are only several hundred thousand current account holders, with the remaining clients merely using one of their other services, notably savings accounts. Since 2015, ING also offer mortgage loans to their customers.
ING is the only significant on-line bank that is not the off-shoot of a traditional bank.
Other banks are affiliated to the main retail banks or to insurance companies.
Thus, Boursorama is part of Societé Générale, BRED part of Banque Populaire, Filbanque part of CIC and Hello Bank part of BNP Paribas. EKO Banque is operated by Crédit Agricole.
Axa and AGF are both insurance companies. In 2016, the French telecoms giant Orange acquired a 65% stake in another insurance company, Groupama, which in January 2017 became 'Orange Bank', one being designed exclusively for mobile phone usage.
None of them are all entirely internet only banks, in the sense that some do have a presence on the high street. However, the services offered by the branch network are very limited, so you need to ensure you know what you want from your bank. If you are using the bank to deposit cash on a regular basis, then you are probably going to need a branch network.
As all the main retail banks now have internet access available to their clients you will need to be satisfied that you are getting something from an internet bank that you cannot get from the high street.
The charges imposed by these banks are generally lower than those of the main retail banks, with many offering free banking.
In addition, their rates of interest on savings accounts are generally higher than those of the retail banks.
Nevertheless, the margin of difference on savings is usually very small and in recent years no bank has been able to offer particularly attractive permanent savings rates.
In order to try and hook new customers the internet banks regularly do promotions that offer a high rate of interest on savings accounts. However, there are all sorts of conditions attached to these offers, and the period of validity of the headline rate is restricted to three to six months.
The advertised rate will also be the gross rate, before deduction of tax and social charges. As a general rule of thumb, residents of France should expect to have to pay one third of all interest earned in tax and social charges.
As we indicated in an earlier page, one of the most interesting offers around on the market is the Borderless Account from Transferwise, who offer a multi-currency account with a Mastercard, for which there is no annual charge. The company do not offer loans or overdrafts, but it is easy to open an account with them without the need for an address in France, and their charges are very reasonable.
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