Klarna Directly Enter Irish Savings Market

Just to add my thoughts on the Klarna offering ... while waiting for my Advanzia account to be set up, I set up a Klarna account. The Klarna account opening process is super easy. Their app is very easy to use. Simple interface. 2.30% instant access without fees, and no hassle account opening, and your money in a AAA country Sweden, with no local tax deductions. Might appeal to some.
 
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I had a Klarna demand account via raisin (as already a raisin customer so only a couple of clicks)
The rate has dropped consistently and with the latest drop I cleaned it out bar a small sum for a term deposit.
Very quick withdrawl (same day) and set up times.
 
I found this WSJ video explaining how BNPL (buy now pay later lenders) like Klarna work interesting - https://www.wsj.com/video/series/the-economics-of/buy-now-pay-later-wants-to-kill-credit-cards-but-theyre-becoming-similar/DFB0A798-40AD-408B-84F4-0F1FD1E49107?mod=hp_lista_pos1

The BNPL industry is booming. 90% of Klarna's revenue comes from retailers (who are charged more than for debit/credit card payments). The consumer pays zero percent interest typically via a pay-in-four payments model if they pay the instalments on time. Albeit, higher retail payment costs probably get reflected in higher retail prices.

Really popular with younger consumers. From speaking to an Irish retailer recently, the percentage of transactions from Klarna is substantial.

The increased default amount mentioned above is proportionally lower than the increased number of customers.

Meanwhile, just opened a term deposit with Klarna for the first time. Really easy to do in their app. Very simple. Accrued interest on the term deposit is displayed too.
 
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Klarna have increased their Flex rate, Flex rate with plan fees and recently increased their term deposit rates.

Klarna now have some of the highest term deposit rates for certain terms and the highest instant access rate with plan fees (albeit you can get better rates without plan fees via other options such as T212).
 
Klarna had poor results recently. I think the higher rates reflect their demand for cash right now. Not sure if this is a good or bad thing. I do remember Northern Rock had higher than average rates back in the day too and we all remember how that turned out.

very much Klarna are using the short term funding market to try fund their slightly longer term requirements. But savings are sticky, even demand deposit accounts.
 
Some excellent term deposit rates with Klarna (direct) at the moment.

12 months2.65% AER per year
18 months2,11% AER per year
24 months2.75% AER per year
36 months2.85% AER per year
48 months2.90% AER per year
 
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Some excellent new term deposit rates from Klarna.

BankInter no longer have the highest 6 month rate without foreign tax. And Klarna have a much better app and set up process than BankInter.

And the Klarna 3% 1 year rate is noteworthy.


3 months1.84% AER
6 months2.89% AER
9 months2.46% AER
12 months3.00% AER
18 months3.02% AER
24 months3.05% AER
36 months3.08% AER
48 months3.10% AER
Click to expand...
 
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Are these rates specific to certain accounts ? When I log into Raisin the 6mth Klarna offer is 2.72% not 2.89%?
 
Klarna via Raisin now offering the above rates (3.00% to 3.10%) for the 12 to 48 month term deposits.
 
It is much quicker and easier to go direct, no waiting around for the term deposit to be opened, it is instant. Plus there is no mininum nor maximum.
 
Sunnysoutheast said:
Any risks involved or advice?
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The Bank guarantee is generally limited to in or around €100,000 per customer per institution. So if you want to be sure that the money you have deposited is covered check firstly that the €100k limit or equivalent is in place and secondly consider splitting the sum you have into a number of parcels and spreading over two or more banks so that you remain below the €100k limit in each.

Some products discussed here are covered for lower sums e.g. the Investor Compensation Scheme is generally €20k.

Most, but not all, State Savings products have higher limits.

Also you could consider putting some of the money in a shorter term product in case you want some of it during the two years and to take advantage of a higher rate if one becomes available. Likewise you could put some in a demand account that pays a decent rate of interest.

Also think about tax reporting/payment - with that amount you could exceed Revenue limits for Form 12 and have to complete Form 11, which is a bit more effort. Also, depending on the product/provider you select you may have to deal with foreign Withholding Tax.

Let us know if you have further questions.
 
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