Do neobanks offer savings accounts and other sources of passive income?

Marketing Manager

Aug 24, 2023
5 min

Have you ever heard the expression "money makes money"? This phrase, simple and effective, is accurate in pointing out that using your own money allows you to generate much more, which can lead you to achieve greater financial autonomy. One of the favorite ways for clients of financial institutions to make extra money is to use their funds in accounts to generate passive income. As the name suggests, passive income is a percentage of earnings generated from a person's money without having to directly and actively engage in productive activity, such as a worker or an entrepreneur running a business.

From a certain perspective, especially for those who want an additional source of income, a passive income is an excellent option to improve a person's cash flow.

Traditionally, it was one of the selling points of banks – if you keep money with us, you’ll receive it with interest. However, now the financial landscape has changed. Do neobanks have something to offer regarding passive income? Let’s explore!

Passive income in traditional banks

As already mentioned, a passive income is a gain of money generated as a result of using your fund, usually through some financial product. It is passive because it does not require much action on your part.

One of the products that banks offer their customers to generate passive income is a savings account. These are basic banking products that are relatively familiar to most customers. It is an account that allows you to store your money and earn interest on those funds in the account.

Although savings accounts at banks are an excellent example of how to generate passive income, they have several disadvantages. The first is that some accounts may have maintenance fees and other additional charges. Considering that banks regularly offer earnings at a very low interest rate, the cost of a savings account can end up being greater than the passive income itself, leaving the customer with no actual earnings but expenses.

On the other hand, many of these accounts have conditions that limit the amount of money a client can withdraw or transfer. That is, being a savings account and offering a passive income percentage, a client is, by contract, obliged not to use his own money for an agreed period of time (one month, for example). Using more than the amount allowed by the bank may result in penalties for the customer.

In part, this situation occurs because the bank, by law, has the right to use its clients' money to make different types of investments. That is why they need liquidity. And if a user demands all his money, it means that the bank is obliged to return money that it probably had planned to invest or has already invested. In addition to this, there is a percentage of risk in this type of account, considering that a bank can make investments with bad results or go bankrupt, putting at risk the funds of its depositors.

Passive income reward in the Blaсkcatcard Ecosystem

As a financial institution, to be more specific, a neobank, Blackcatcard adopted the commitment not only to offer financial products as everyone knows them, but we decided to make them better and fairer for our customers.

Therefore, thanks to the offer of our partner Baltic Technology Solutions OÜ*, we have developed something similar to a savings account, but better. We offer a reward of up to 4% per annum on the balance in our customers’ accounts. Within the framework of this loyalty program, all the disadvantages that banks have were eliminated. First of all, all individual customers can open a Blackcatcard account fully remotely, absolutely free of charge. For basic functions, like IBAN and the first payment card, there is no maintenance fee. For this reason, the reward is not reduced for individuals by expenses for opening or mantaining a Blackcatcard account.

Secondly, this reward is available to all our clients, as it has no special requirements and is automatically activated from the moment an account is opened. In addition, the reward is calculated daily, and the client receives up to 4% per annum on his funds in the account every month, so literally every penny "counts."

On the other hand, our users do not worry about the future of their funds, since neobanks are legally obligated not to use the money of depositors in any way.

This complements other benefits of Blackcatcard. Individuals in the EU can make up to 5 free SEPA transfers per month (from the sixth one onwards, they pay a small fixed fee of 0.20 Euro) and withdraw up to 200 Euro at ATMs without commission (from that figure onwards only 1% of the amount withdrawn is charged).

This is undoubtedly an excellent offer that you can combine with other options to increase your passive income. We also recommend our users to follow us on social media not to miss any additional promotions or other opportunities to earn more or get a bigger cashback.

*The rewards are provided by Baltic Technology Solutions OÜ. More details here.


What is passive income?

It is a profit that you generate periodically by investing your money or depositing it in some financial products of banks.

Does Blackcatcard have a savings account?

No, but we offer something similar – an up to 4% p.a. reward.

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