There are some startup ideas that come out of nowhere, and are willed into existence by driven eccentrics.
Others fall into the ‘why didn’t I think of that’ bracket.
SavingGlobal is squarely in the latter.
The German fintech firm answers this simple question. If German savers can get better interest rates at banks in other EU countries, why not make it easy for them to do so?
It’s a beautifully obvious idea, especially as Germans had been straddling all manner of hurdles to make these gains before SavingGlobal came along.
In an exclusive video interview with Hot Topics, Michael Stephan, COO of the German fintech firm, says: “People have been dong this for years. When we spoke to Bulgarian and Romanina banks, they told use Germans were flying over and opening local accounts.
“They would even fill out forms without really knowing the language.”
The reason they do so is because of the huge financial incentives.
A German saver with €100,000 in a local bank might only earn €600 (on an account paying 0.6 per cent). But they could get €2,500 at, say, a Bulgarian bank paying 2.5 per cent.
And since the EU requires member countries to guarantee deposits of up to €100,000, their investment is safe.
SavingGlobal simply removed the barriers to this no-downside activity. It’s done deals with overseas banks so that local German savers can do all their business online and in their own language.
Other sweeteners include penalty-free early withdrawals and no automatic rollover to reduced rates after a term expires.
It’s become a star of the German fintech scene.
The firm launched last in 2013 and now offers over 40 term deposit products from banks in nine different European countries. It has attracted 18,000 customers in 14 months.
Inevitably, investors caught on to the SavingGlobal story. In June 2015, it raised €7.5m in a round led by Index Ventures to bring the lifetime total raised to €10 million.