Just a few days ago LHV publicised some great news about their Growth Account. It seems LHV has decided to grow its user base by getting more young clients to join their bank and this has brought some rewards to others as well.
The main change in the Growth Account I have seen is the fact that the account management fee has gone down for some people, especially for investors just starting out. The Growth Account is free of charge for the first year and then the monthly management fee is 0,05% with the minimum being set to 50 cents (this used to be 1€). So after one year now it is advisable to have at least 1000€ on the Growth Account not to pay more than the 0.05% minimum. Previous to the change the amount you needed to gather in the first year was 2000€. The other change is that the Growth Account management fee is 0€ for people until they turn 26 years old. So if you have a newborn child and you would like to invest some money for their future in long term then this account could be free of charge for 25 years (if no changes are made to fees of course).
The other main fees such as purchase and sale transaction fees remained the same- 1% purchase fee, 11€ + 0,3% per instrument sale fee.
Another bigger change is that although you still can choose "just" 6 funds the options are largely increased. There used to be 22 fund options in Growth Account and now there are 38 to choose from. They also added filter functions by themes (technology, consumption, sustainable development, healthcare and even cryptocurrencies etc), types (dividend payers) and regions (global, developed countries, developing countries). There is also a risk scale ranging from 1 to 7, where the lowest risk fund has level 3 (corporate bonds) and level 7 are cryptocurrencies and Russian companies. Sometimes too many options can be paralysing and some of the options are more speculation than long-term investing. Not sure about how I feel about it yet. Some of the new options are interesting- I have been thinking about medicine or biotechnology field since starting the Growth Account (as it is a field I try to keep myself up to date on anyway) but up to now I didn't really have an option to dabble in it. Need to read more about the field in general as well as the options now open to me. So maybe, just maybe I'll change something. We'll see.
There was another news related to Growth Account...
If you have Growth Account and also use LHV for your daily banking there is also now new micro investing option you can activate. Basically every time you pay with the card small amount of money is transferred to the Growth Account and once a week purchase is made based on your predetermined preferences just like happens with your normal deposits to there. I have somewhat similar thing in my SEB account although there the money is put on regular savings account. But even for a person like me who prefers to pay cash (more on it here)- this account still gathers some money. How much is added to the Growth Account depends on what you choose.
- In the so-called unlimited option always your purchase is rounded up to the next full euro and the difference is deposited to the Growth Account. So, for example, the price is 7,40€ and an additional 60 cents would make full 8€ so 60 cents are deposited to Growth Account. In all the everyday prices ending in 90 or 99 cents - the amount deposited is really small.
- In case of the limited amount if the payment is less than 10€ you would deposit 10% of the payment made. This makes some deposits larger and some smaller than in the first option. In the 7,40€ example, you would deposit 74 cents. If the price was 1.20 you would deposit just 12 cents compared to 80 cents of the unlimited option. If the payment is 10€ or more it is always rounded up to nearest €, same as in the unlimited option.
One more news they stated was for students, and it was that starting this year LHV is giving out student loans. This does get them, clients, perhaps? When I started university it was quite common that people my age didn't have bank accounts and they made it in the bank where they took out a student loan. And as you needed 2 persons to guarantee the loan, it was the least amount of paperwork to get the loan from the bank they banked at. Nowadays as the student loan terms are the same in all banks I guess it is still true people take it from their home bank? But at least they won't lose clients who would need to make an account in another bank to get the loan. So not sure how much this changes for them but maybe the image of a youthful and successful bank will draw in more young people if they can get the loan there as well?
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