An honest review of N26

An honest review of N26

An honest review of the N26 online bank after a year of use. Are the neat features worth dealing with a FinTech startup? Here is the verdict.

When I just landed in Berlin, I opened a bank account with Commerzbank, because there was a branch downstairs.

Commerzbank is an old-fashioned bank. You are assigned an advisor - a real human being - and you must go through that person for most major operations. Lost your credit card? Email your advisor. Need to open a brokerage account? Book an appointment with your advisor. Need to close your account? Advisor. They once confirmed an appointment by mail. Commerzbank is a great bank, but for another century.

The biggest problem, however, is that Commerzbank charges a nauseating number of fees for day-to-day operations: 7 euros a month for an account, 5 euros for using another bank's ATM, 40 euros a year for a basic credit card and so on. As a card-carrying penny pincher, that quickly got old, and I began looking for a new bank.

The new kid on the block

When I asked around, every colleague and friend of mine was raving about N26 (then Number26), the hip new online bank with the flashy app and neat transparent card. At face value, Number26 was a solid choice: no fees, free cash withdrawals from any ATM, free credit card and a neat app. That seemed like a good deal, so I gave it a try.

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Broken promises

Opening an account with N26 is fairly straightforward. You install the app, start a video chat, show your ID and you are done. If all goes according to plan, you're done in 8 minutes.

Things did not go according to plan.

N26's video identification partner, IDnow, does not support all ID documents. When I signed up, they would not allow Canadian passports. Their list of supported ID documents has grown since then, but it's still missing India, among others.

If you can't verify your ID through the app, you must do it through Postident. Unfortunately, Postident supports an equally small list of ID documents1,2,3. There are multiple reports of Russian, Ukrainian, Indian and Pakistani citizens who can't get Deutsche Post to accept their passport. No Postident, no N26 account. You have to consider other banks such as ING DiBa, DKB or comdirect.

Another important issue with Postident is that it requires a Meldebescheinigung, the document you get when registering your address in Germany. This is a major inconvenience for new Berliners, as it may take several weeks to get a Meldebescheinigung, and a few more days to activate a N26 account. If you need a bank account right now, this is a problem.

Nonetheless, once your account is all set up, everything should go smoothly, right?

Not quite.

In order to use N26, you must pair a phone with your account. Your phone is used to confirm transfers and other account operations. If you don't have a phone, you cannot use N26 account. If you don't have Android or iOS, you cannot use N26. If you don't have a phone number, you cannot pair a new phone, and you cannot use N26.

When I changed jobs last summer, I had to return my company phone, so had no phone number for a few weeks. During that time, I was effectively locked out of my N26 account, and could not transfer money from it. Without my old Commerzbank account, I could not have paid the rent that month.

Moreover, I could not unpair the old phone, as I gave it back on my last day of work. It had to be unpaired manually by N26's customer service before I could pair a new device.

Some other significant issues have plagued N26 customers since the company's debut in 2016: accounts closed without warning, security issues, condition changes, new fees and so on. N26 does not have the best of track records.

Free as in beer

Why am I still an N26 customer despite those setbacks? Because it saves me over a hundred euros a year.

Commerzbank charges me 7 euros a month to keep an account open, 40 euros a year for a basic credit card, and 5 euros for withdrawing cash from other ATMs. N26 never cost me a dime.

The N26 app

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In addition to the unbeatable price, N26 offers a fantastic user experience a majority of the time. I am willing to deal with occasional issues if their service makes my life easier, and it does.

At the centre of this great user experience is the N26 app.

Everything can be done from your phone through this app. In fact, some features are only available through the app.

The N26 app seamlessly integrates with iOS. You use TouchID to login, force touch to see your account balance from the home screen, and widgets to keep an eye on your finances. Transaction notifications appear as regular iOS notifications. These little details matter in the big picture.

Transaction notifications are by far my favourite feature. As soon as a transaction goes through, you get a notification. When I swipe my N26 card, my phone vibrates in my pocket before the cashier hands me the receipt. These notifications are especially helpful with subscription payments you would not notice otherwise: Netflix, Spotify, Coup and so on.

The expense tracking features are also quite nice. The app splits your expenses into categories and gives you an overview of your spending habits. I don't use it much myself, but it's often cited as a very useful feature.

Another neat feature is the Cash Map, which shows you ATMs in the vicinity. On iOS, you can reach it from the home screen with force touch. It's easier than to type "atm" in Google Maps, and returns more or less the same ATMs.

The app also lets you instantly transfer money to other N26 users using their email address or phone number, a faster alternative to IBAN transfers. It became the standard way to exchange money with some of my friends.

Unfortunately, the app has a few bugs and can be sluggish at times, but the overall experience is overwhelmingly positive. Update: these issues seem fixed as of December 2017.

There are other services available through the app, but I have not tried them.

The N26 website

The N26 website gives you another way to access your transactions and make transfers. It is very similar to the apps, but is missing some of the special features. However, it's perfectly fine for most day-to-day transactions.

If you want to make operations through the website, you will need to confirm them on your phone. While this security measure is an extra step, it's a step ahead of the PhotoTAN verification used by most banks.

Technical support in English

N26 and Deutsche Bank are the only German banks to officially offer English technical support. If you don't speak German fluently, being able to sort things out in English is a considerable plus. 

Most problems can be solved through live chat, but email and phone support lines are also available. I hate making phone calls, so the live chat is fantastic.

However, a faceless customer service representative cannot compete with a bank advisor. Commerzbank lets me schedule an appointment Frau Saliger, a specific human being who remembers my face. She can answer my questions about Commerzbank's services, but also answer general questions about banking in Germany.

Nonetheless, I found the N26 customer service perfectly acceptable for an online bank.

Verdict: it's worth it, but...

N26 is still in its early years, and it's hard to escape the perception that you are dealing with a startup. Their signup process has issues, their app has issues, and they don't account for situations like "having an Indian passport" or "not having a phone". Such is life in a world where "move fast and break things" is considered a viable business model.

Nonetheless, it's hard to ignore the fees you would pay for the same perks at any other bank, and that N26 is the only German bank that officially offers English support. It's also one of the few banks that lets you create an account before you have an official address in Germany.

Would I recommend N26? Absolutely. All of my day-to-day transactions go through N26, and I am overall quite satisfied with the experience, despite some hiccups in the first few months. I closed my Commerzbank account and made N26 my only bank in February 2018. Go ahead, open an account. Tell them Nick sent you.

Visit the N26 website

If you deemed that N26 is not for you, take a look at DKB or ING DiBa, both of which are highly recommended by my colleagues and friends, or perhaps consider an established brick-and-mortar bank. We wrote a solid overview of available options here.

This article uses affiliate links. When you click these links and open an N26 account, we make a little money. We use that money to pay our hosting bill, expand the website and donate to charity. We don't sell recommendations or write reviews for money.

Updates

2017-09-25: Added corrections from commenters

2017-10-05: Added that Postident only supports a limited list of ID documents

2017-12-13: Corrected some facts, adjusted some parts to match my current opinion.