🔔 RCI Bank to get a UK Banking Licence

For those who have been reluctant to open an RCI account, as they don’t have a UK Banking Licence, there could be some good news in the new year.

In preparation for the UK leaving the European Union in March 2019, RCI has been working with the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) to obtain a UK banking licence so that they can continue to offer their savings products, regardless of what happens next. Once the PRA have approved their UK banking licence, RCI Bank UK Limited will be authorised by the PRA.

RCI has offered consistently competitive accounts since it launched in the UK in 2015.

At the moment RCI’s Freedom Savings Account* is offering the joint market-leading simple savings account, offering 1.42% gross/AER. It’s simple because the account does not include a short term bonus or a restriction on the number of easy access withdrawals allowed. So, the account could be more appropriate for those savers who could need regular access to their funds and are less likely to remember to switch at the end of any bonus period.

Currently RCI operates its UK business through the UK branch of its French parent company, RCI Banque SA.

What will change?

Once everything has been agreed, RCI is proposing to transfer the business of RCI Bank UK branch to a new UK limited liability company which will be called RCI Bank UK Limited and which will be a wholly-owned bank, subsidiary of RCI Banque SA.

RCI has assured us that this process will not affect the day-to-day banking experience with them. All savings accounts, terms and conditions, account numbers, login details, passwords and products and services will remain the same. And the customer service contact details will also remain the same and will continue to be provided by a dedicated customer services call centre based in the UK.

And possibly more importantly, your money will remain protected.

As it currently stands, any deposits with RCI are currently protected by France’s Fonds de Garantie des Dépôts et de Résolution (FGDR). Customers who have eligible deposits with the UK RCI Branch are protected up to a total of €100,000 by the FGDR and are not protected by the UK Financial Services Compensation Scheme (FSCS). Any deposits you hold above the €100,000 limit are not covered. The protection covers each customer, not each account. For joint accounts, each customer is protected up to €100,000, so up to €200,000 between them. As it stands at the time of writing, €100,000 equates to approximately £90,000 - but this is subject to exchange rate fluctuations.

Following the implementation of the Scheme, all customers will be covered by the FSCS, so up to £85,000 per person (£170,000 for a joint account).

So, although the cover is currently slightly less, any funds returned by the FSCS would be paid in Sterling, rather than in Euros.

For those existing customers who are not happy about this potential change, RCI Bank has confirmed that you have the right to withdraw the amounts exceeding £85,000 held in any savings accounts with RCI, in the three months following the email you should have received on 20th December, without penalty or loss of interest.

Another benefit of the UK FSCS compared to the French FGDR is the Temporary High Balance cover. The FSCS provides a £1,000,000 protection limit per individual, per banking licence, for certain types of life events – see our Factsheet for more information - for a period of up to six months.

>> More on Temporary High Balance protection

In comparison, the FGDR provides protection in respect of temporary high deposits for an additional €500,000, for up to three months.

RCI Bank has produced some important documents for you to read in order to help you to understand the process in more detail and to answer any questions that you may have. These can be found here https://www.rcibank.co.uk/support/partvii to download; or alternatively you can request a free copy from RCI Bank by contacting them at [email protected] or calling on 0330 2000 300.

If you would like to discuss this change further, email us at [email protected] or call us on 0800 011 9705.

*We are occasionally paid by some providers if you click through from our Best Buy Tables and open a savings or current account with them. We will never accept a payment that compromises in any way our independent, whole of market approach to providing information on savings products. For clarity we will indicate those companies who remunerate us with an asterisk (*).

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