RaboDirect launched in Ireland in 2005 as a savings account specialist. They offer competitive savings accounts and execution only investment accounts. It also had a dabble with a credit account in 2007, which was withdrawn in 2009. Their investment account allows you to invest starting with just €100 and they offered quite a good range of funds. As an online only bank, the process was straightforward with everything done via their website. I used them quite a bit and still have some investments in my Rabo Account although now I have moved most of my funds to P2P lending and Degiro for investments. I found the Rabo fees quite high. They had a .75% entry and exit fee on top of the account management fees. Rabo has now announced after a ‘review of the RaboDirect business in Ireland’ they will withdrawing the investment account on 24th April.
I can’t say I’m overly disappointed, I was using my Rabo investment account less and less but it is a bit of a hassle. Anyone with funds in a Rabo direct Investment Account has two options.
(1) You can sell the funds
RaboDirect are waiving the exit fees until the 24th April so you can sell your funds before the move to Canor Fitzgerald and not pay any exit fees. However, in doing so you will be crystallizing the gains (or losses) which will have implications from a tax perspective.
(2) You can do nothing and the funds will be transferred over to Cantor Fitzgerald
If you do not sell your funds, the funds will be transferred over to Cantor Fitzgerald. They have agreed to charge the same fees as RaboDirect for 12 months from the date of the transfer. There will be 2-3 weeks time to complete the transfer and between 24th April to approximately 15th May customers will not be able to sell or buy their funds. This transfer does not count as a sale from a tax perspective so you will not be crystallizing any profits/losses.
In a way I’m happy about this. It has finally forced me to do something with my remaining RaboDirect investments which haven’t been doing so well recently especially with the fees compared to my other investments. Not being charged the .75% exit fee made the decision for me and I’ll sell all the funds. I’ll probably end up purchasing ETFs on Degiro in the coming days. You can read the full statement from RaboDirect here.