• Ask the Community

  • Why do you force us to keep our money in government bonds?

Some may not know but the safest possible way for a bank to store money is with the central bank directly. Read my post here (* link down below) to lear more about the subject.

Unfortunately today Bunq has changed this practice and may just became a less safer or even worse a much less safe bank than other high street banks. From now on, it is not possible to instruct Bunq to keep all your money directly with the ECB (European Central Bank) but instead Bunq forces us to keep some of our money with the ECB and some in government bonds.

This practice is very misleading for most of your customers because you failed to disclose how you are going to purchase the bonds and who is going to be the legal owner of those bonds. The huge problem here and which creates an unforeseeable and potentially hidden risk for most of your customers is that Bunq is likely going to purchase those government bonds through various brokerage companies. Since in modern day finance brokerage companies almost all the time holds the legal title to the assets, it also means that if the brokerage company that Bunq has chosen to work with default, then all your costumers may have to say good bye to their money above the €100,000 deposit protection threshold.

So in practice here is what Bunq is going to do from now on with our money:

  • Some percentage is going to be held with ECB directly and this is the safest option.

  • Some percentage of your money is going to be transferred to a brokerage company where Bunq is going to purchase government bonds with your funds. If the brokerage company default and you had more than €100,000 with Bunq then you may never see your money again. If the mathematical model that Bunq has chosen to utilize would fail in an environment (i.e. financial crises) that Bunq was not prepared then Bunq may be forced to sell those government bonds at a loss. What happens if Bunq won't have the money to compensate those losses? You guessed it, according to the EU legislations, Bunq will simply take those customers' money who has more than €100,000 on their account and it will try to keep the bank alive on the customers money. If you think that this is not legal and the law wouldn't allow it, then please check my link below and read my post from top to bottom then check what I said in Google. So we have two risks here:

  • The entity which holds the bonds may go bankrupt and Bunq may bankrupt too as a consequence and/or Bunq will have to take money from costumer balances over €100,000.

  • The mathematical model that Bunq calculated may fail in an unusual financial situation. This means that Bunq has likely decided to let's say store 75% of our money in government bonds and 25% directly with the ECB because it thinks based on historical data that there is a very small chance that most of Bunq's clients would want to transfer their money to another bank. If this were to happen, then Bunq would be forced to sell the government bonds and if the price has changed (it changes on a daily basis) then Bunq may sell it at a loss, in other words for less than what it had paid for it.

Bunq was different because all the customers' money was kept safe directly with the ECB. From now on Bunq is going to invest and/or trade with our money just like any other bank. It doesn't make Bunq bad, it simply means that from now on Bunq may not be any safer than any other bank you may choose to bank with since we will have no clue where our money is actually being held, what assets Bunq has bought with our cash and how much loss the bank may have suffered on those deals.

I would really recommend Bunq to allow all their customers to be able to choose not to store their money anywhere else other than with the ECB.

Check my first post here to learn more: https://together.bunq.com/u/NEU-Turquoise-Zebra

    I don’t get the frustration about government bonds. This is something bunq did from the beginning because they are required to do this. It is also something we all could know because bunq has told us over and over.

      They even explain this when you try to unselect the option.

        @NEU-Turquoise-Zebra#67732 Bunq already always invested in bonds to fulfill a legal requirements. This isn't anything new. AFAIK, you don't need a broker. (Keep in mind bunq has a banking license.)

          Hmm. I get your concern. Only below the options is the text: you are covered for the first 100.000, whatever happens. Are you saying i cannot trust this text and i am responsible for what bunq is doing with my money?

            @NEU-Turquoise-Zebra#67735 No there is a requirement for them to make investments, in which case bonds of stable countries are actually rather secure. I'm not sure about not investing customer money, that probably depends on the way you look at it; bottom line is Premium users always contributed to investments. Whether that was through their monthly payment or through their account balance makes no difference to me to be honest, but maybe others could use it as an argument to sleep better at night. :P

              Hi there,

              First off- thanks for sharing your feedback on Together. This always helps us to see what is important to our users when making changes and improvements in the the app.

              We want to give you the freedom to choose what happens with your money and will be sure to look into your suggestion. If you we have updated news on this in the future, we will let you know directly through this topic. For now we'll let other bunqers vote and share their opinion on making this an additional option.

              Thanks again for sharing your voice with us and please continue to let us know what features and adaptations you'd like to see in the app (as we truly take these into account).

              Cheers,

              -Elise

                @Elise#67986 Your reply doesn't actually say why bunq took the freedom we had before away. Why did bunq decide to do this?

                  @JeroenE#67991 What freedom exactly did bunq take away from you? You now have options for the investment and before you didn’t have those options

                    @NEU-Turquoise-Zebra#67724

                    First of all, bunq is required by law to invest some money in government bonds.

                    Second: all legal brokers are required to keep the shares / bonds / etc they have on behalf of customers on separate accounts that are not affected in case they go bankrupt.

                      @Roeshimi#67997 Well, some people think that before yesterday bunq 🌈 didn't invest a single penny of your money, because the investment in bonds was fully funded with bunqs own money.

                      Well, let me tell a little secret 😉... the investments in governmental bonds are financed by bunq AND partly also with the money of bunqers.

                      But in all fairness, bunq 🌈 did gave mixed signals about how they financed those bonds.

                      So you could indeed say that you still have the same choice a you did before.

                        I for one think that it is great that you now offer an interest rate. I didn't choose bunq because you didn't invest our money. I choose bunq because of your superior mobile banking app and your innovation and features in general. I didn't agree with everything you did in the past year, but one of the things that have been annoying me since the beginning was the 0 % interest rate and the argument that you didn't invest our money. I like where this is heading now.

                          @Roeshimi#67997 Before it was only ECB, now its ECB and government bonds.

                          @Arthur#68005 Can you point me to this law?

                          @JohnDo#68009 So you're saying bunq was lying to us before when they said they only used the ECB?!?!

                            @JeroenE#68012 Well, I use not that strong words.... but bunq 🌈 did gave mixed signals. The slogan always was "we don't invest in nasty things " ;) Still true.

                            An example :

                              @NEU-Turquoise-Zebra#68017 Well, support did told me that too. But Ali suggested otherwise in a post on Together... see the screenshot above.

                              That is what I ment with bunq sends mixed signals

                                @NEU-Turquoise-Zebra#68020 Well, see the second point that Ali made in that comment.

                                I don't play with words... it is genuinely how some people interper @Ali his words.

                                So, sure I hope I'm wrong.... and then I will be the first to say sorry

                                  @JohnDo#68016 That they are buying stuff with their own money is their right. It also kinda proofs that they weren't required by law to invest in government bonds otherwise they would have had to do this from the beginning

                                  What I'm more upset about is what they are doing with my money. See below where they say customers money is only stored at the ECB:

                                  https://together.bunq.com/d/5030-behind-the-scenes-why-we-introduced-freedom-of-choice

                                  Their slogan "we don't invest in nasty things" is not true when they start doing things like personal loans, mortgages or government bonds. If only because they can't control what a person or government will actually do with that money. Is buying a diesel car a "nasty thing"? Is buying a gun a nasty thing? Is building a house in the woods a nasty thing? Is building a coal power plant a nasty thing? Everybody might answer differently and buqn can't guarantee that none of this will happen with the money they invested.

                                    @JeroenE#68027 Sorry, I didn't mean to start a whole word discussion.

                                    I hope I miss understood and nothing is going on here.

                                      @NEU-Turquoise-Zebra#67736 No business above 100.000 would have their money at bunq. You have to pay a penalty fee (0,24 cents a day) for every 1.000 euros above 100K. Bunq has a lot of benefits but above 100K every business would have their money at another bank..