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 It also had a dabble with a credit account in 2007, which was withdrawn in 2009.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.
Hi! I’m one of those affected by this. I understand that you’re planning to sell all your funds in Rabo now. For my part, I’m actually planning to sell in April 2018 since Cantor Fitzgerald will be charging the same fees as Rabo for the next 12 months plus the fact that tax would go down to 37% by then. I don’t know if I’m right about this.
I did consider keeping the investments with Cantor Fitzgerald but I decided to take advantage of the no exit fee promotion before the transfer. However, I didn’t hear about the lower 37% rate.
Isn’t the current 41% represents the DIRT? The DIRT rate will reduce by 2% every year, so by 2018 it would be 37%. This is simply an assumption.
Thank you for the reply.
It is my understanding that the income from investments is not liable to DIRT. Instead it is liable to income tax or exit tax depending on the structure of the investment. I may be completely wrong but that is my understanding.