Tinkoff launches automated micro-investing service
Tinkoff Bank, one of Russia’s first neobanks, has launched a micro-investing service where small savings on everyday purchases will be automatically invested into a portfolio.
Owned by TCS, Tinkoff claims to serve more than 10 million customers and makes up the bulk of TCS’s business with a 13.2% of Russia’s credit card market.
Called ‘Investment Box’, Tinkoff says it is the first bank in Russia to offer the service. Spending on either the ‘Tinkoff Black’ debit card or the ‘Tinkoff Black Metal’ premium card, customers can choose how much they want to save on each purchase or set an automatic amount.
There are four savings options: 1%-15% cashback, 4% interest on account balance, rounding up everyday transactions, or setting a custom amount for top-ups. The rounding up option allows customers to forecast their savings for the year.
Customers can select, all, a few, or one of these options to run in the background of the Tinkoff mobile banking app. The savings automatically land in the bank’s ‘Permanent Portfolio’ of exchange-traded funds (ETFs).
The portfolio includes stocks, corporate and government bonds in multiple currencies, and gold. Its average historic return stands at 14% in roubles, 7% in US dollars, and 6% in euros. Customers can add up to three Investment Boxes in these different currencies.
There are no brokerage or depositary fees, and the bank will charge just RUB 1.00 ($0.014) for account closure. Funds withdrawn will be taxed roughly 13% by Russia’s government.
The fund’s costs – 0.99% of the average annual asset value – are included in the investment unit value on the exchange and are not charged back to the customer.
“We estimate the number of Investment Box users will exceed 300,000 by the end of 2020, growing to more than one million active users in 2021,” says Tinkoff Capital’s CEO, Ruslan Muchipov, who cites US micro-savings services Acorns and Stash as “gaining popularity abroad”.
“The Investment Box gives customers an opportunity to save tens of thousands of roubles each year,” Muchipov adds.
Tinkoff’s parent company TCS experienced a fall in shares in March after it was revealed its owner Oleg Tinkov – who has lived in London since 2013 – is facing extradition to the US over a tax evasion charge.
Tinkov owns a 40% stake in TCS, but it is CEO, Oliver Hughes, who leads the London-listed bank’s operations.