Northmill Bank Review: The Bank With NO FEES (2023)
Northmill Bank is a digital bank in Sweden that was established in 2006. Their most famous product is Northmill kontokredit (account credit), which is an overdraft bank account. Put simply, it is a free bank account with a free line of credit, up to 50.000kr. In many ways, it is exactly like a credit card but simpler, and more straightforward.
One of the pain points of credit cards is that you have to keep track of what you have spent separately. You don’t see the impact right away on your bank account. Instead, you must pay an invoice every month, which creates confusion, especially in the beginning. In addition, interest rates on credit cards are much more expensive than overdraft accounts if you don’t pay your invoice in full.
The Northmill card and account seem to solve this problem with a free bank account, ultra-low interest rates on overdrafts, and a payment card. As I got many questions about Northmill, I created this post with the most up-to-date information I could collect.
Traditional Credit Card
You can only use credit for purchases
High interest rates
Fixed amount installments
Northmill Bank Review (2023)
Who’s this Bank for? (TL;DR)
What is Northmill Bank?
Northmill Bank is a Swedish digital bank that offers various financial products and services, including personal loans, credit cards, and savings accounts. The bank was founded in 2006 and has its headquarters in Stockholm, Sweden.
Similar to other digital banks, Northmill Bank operates entirely online with no physical branches. Northmill aims to provide a modern, customer-centric banking experience that is easy, transparent, and accessible to everyone. Its products and services are designed to meet the evolving needs of consumers and offer competitive rates and flexible terms.
Northmill Bank is part of Northmill, a fintech company with the vision to improve financial life, offer merchants innovative solutions, and erase the borders between in-store and online. In 2022, Northmill had around 200.000 customers across three European countries and managed to raise around $30 million in new funding.
1. Kontokredit (Account Credit)
With a credit limit of up to 50.000 SEK, Northmill Bank account credit can be used as a flexible buffer, where you only borrow what you need and only pay for what you use. The account credit works much like a credit card but without a physical card.
At a favorable price, private individuals borrow according to their needs. The application process is entirely digital, and the loan is given immediately.
With account credit, you can repay flexibly. Here are a couple of examples of monthly payments (including amortization):
- SEK 15.000 = SEK 327 to SEK 447 per month
- SEK 30.000 = SEK 630 to SEK 869 per month SEK
- 50.000 = SEK 1.035 to SEK 1.432 per month
Individual Interest Rate
Northmill Bank gives you an individual interest rate determined based on your conditions when you apply. The interest rate is based on the credit assessment made at the time of application. The advantage of this is that you can get the absolute lowest interest rate they can offer you.
Smooth bank transfers
Unlike a credit card, you can make transfers from your Northmill account credit to your bank account (it is just like cash!). If you have Swedbank, Nordea, SEB, or Handelsbanken, your loan amount is usually paid out on the same day you receive notification that your application has been approved.
Overdraft vs. credit Card
Credit cards are widely spread, but overdraft accounts are less common. An overdraft can have more advantages than a credit card. Often, a line of credit has a lower interest rate on the amount you use of your credit amount compared to a credit card.
Another practical advantage is that you don’t have to keep track of a physical card. The account credit is always there as a supplement to your everyday finances when you need it.
An overdraft account can protect you against unforeseen charges just like a credit card. A sudden dental expense is a classic. But with an account credit linked to your account, you can easily arrange the costs directly from the dentist’s chair. Or from the car test, the hardware store, or at the reception at the vet.
- For a credit of 50.000 SEK at 12.9% annual interest (variable) over a year with 12 repayments, a withdrawal fee of SEK 195, and a monthly administrative fee of SEK 19, the total amount to be repaid is SEK 53,999 (SEK 4,500 per month) and the effective interest rate 15.4%.
- For a credit of SEK 20.000 at 21.9% annual interest (variable) over five years with 60 repayments, a withdrawal fee of SEK 195, and a monthly administrative fee of SEK 19, the monthly amount is SEK 714 (a total of SEK 42,805) and the effective interest rate is SEK 26, 33%.
2. Debit Card
Northmill Bank offers a FREE debit card too, which supports Apple Pay and can be connected to account credit.
The Northmill Bank card is free of fees, made from recycled plastic, and works physically and virtually. You can apply for account credit if you need credit to top up your Northmill card. You can then withdraw whenever you want and use the credit if necessary. It is only when you use it that you pay for it. You make transfers between your accounts in the app easily and without any delay.
Northmill Bank Card features:
- Swish easily to your account
- Virtual & physical card
- Freeze the card if necessary
- Select PIN code
- Push notifications when purchasing
- The card is made of recycled plastic
- Apple Pay and Samsung Pay
Northmill card customers also participate in exclusive, great offers from selected partners.
Price list (this is the best part)
- Administrative fee: SEK 0
- Annual fee: SEK 0
- Quarterly fee: SEK 0
- Monthly fee: SEK 0
- Fee for cash withdrawals at ATMs: SEK 0
- Currency exchange fee: SEK 0
- Extra card: SEK 0
- New card: SEK 0
- Change PIN code: SEK 0
- Overdraft fee: SEK 0
- Delay fee: SEK 0
- Reminder fee: SEK 0
To complement your personal account, you can also have a Northmill savings account (read more below), with variable or fixed annual interest. Maximize your interest by having the money in the savings account, and transfer it to the personal account when you want to use the card! Transfers to your account are made directly, and you can immediately purchase with the card.
3. Collect Loans (Reduce)
Reduce is a consolidation loan that allows you to consolidate your loans and credits up to 300.000 SEK. If you meet Northmill’s terms, they guarantee you a reduced interest rate.
There are many advantages to consolidating your loans and credits. It gives you a more precise overview of your loans and costs. Northmill’s Reduce guarantees you a reduced interest rate if you meet the required terms, which can also give you a lower price for your loan.
When you collect loans and credits, you get an improved credit rating, which makes it easier for you to take out a mortgage or other type of loan in the future.
With Reduce, you can collect your installments, credit card invoices, and unsecured private loans from SEK 15.000 to 300.000 SEK, and lower their interest.
On average, Reduce lowers the interest rate by at least 5%.
Price example: For a loan of SEK 100,000 at 9.50% annual interest rate (variable) over 7 years with 84 repayments and a set-up fee of SEK 195, the total amount to repay is SEK 137,557 (SEK 1,638 per month) and the effective interest rate is 9.99%.
How to consolidate loans with Northmill Reduce?
Consolidating loans with Northmill Bank is simple.
- Apply online
- Credit check with BankID (Creditsafe)
- Select an amount up to 300.000 SEK
- Northmill Bank will resolve your loans and credit
- Choose the repayment period and amount
4. Savings Account
Save money at a variable or fixed annual interest with a government deposit guarantee. When you apply for a Northmill Bank savings account, you first get a variable savings account. You can deposit up to SEK 1.100.000. The annual interest on a variable savings account is 2.45%, while you have free withdrawals. Once you’ve opened it, you’ll be given the option to open a fixed-interest account.
Log in to My Pages and select “Open fixed interest account.” Accept the terms and conditions here as well and sign with BankID. You can then transfer money from the variable savings account to the fixed interest account. It takes up to a day.
There are four different fixed-interest accounts. These have a fixed annual interest rate of 2.50% for 3 months, 2.55% for six months, 3.00% for 12 months, and 3.00% for 24 months, respectively. Norhtmill’s fixed-interest accounts have a minimum amount of SEK 5.000. You can save up to a total of SEK 1.100.000. This applies regardless of the type of savings account you save in.
Fixed Interest accounts:
- Variable savings account: 2.45%
- 3 months: 2.50% in fixed annual interest
- 6 months: 2.55% in fixed annual interest
- 12 months: 3.00% in fixed annual interest
- 24 months: 3.00% in fixed annual interest
All are completely free of annual fees, withdrawal fees, deposit fees, or set-up fees if you apply digitally.
Northmill Bank accounts offer a government deposit guarantee. If an institution covered by the guarantee goes bankrupt, the state deposit guarantee kicks in.
For you as an account holder, this means security because the National Debt Office, in such a case, pays out an amount corresponding to the money you have deposited, which also includes the accrued interest to the account holder, but typically no more than SEK 1.050.000 per person (regardless of the number of accounts).
5. Loan Insurance
Northmill Bank also sells insurance and protection for your loans or credit lines. If you should become ill or involuntarily unemployed, the insurance takes over the payment of your loan or credit. This also applies in the event of death.
The requirements are to:
- You have been employed for at least three months or are self-employed with a connection to A-kassa
- You are at the disposal of the labor market
- You have turned 18, but not 68
You can have insurance depending on your Northmill products
- For Northmill Reduce or Private Loans: The loan protection costs 7.63% per month of the agreed fixed monthly cost. If you were to have a monthly amount of SEK 2.000, you would pay SEK 153 a month for the insurance.
- For Northmill kontokredit: Credit protection costs 0.64% per month of the outstanding amount. If you had used SEK 10.000, you pay SEK 64 a month for the insurance.
Northmill’s mantra: Digital, yet Personal
Sweden is at the crest of the wave regarding digital banking. Digital banks in Sweden have gained a significant market share between 2012 and 2022, with estimates suggesting 10-15% of the Swedish banking market. Plus, the fintech sector has grown rapidly.
While traditional banks still hold most of the market share in Sweden, digital banks have gained traction among younger and more tech-savvy consumers looking for more innovative and convenient banking solutions.
We create a more personalized and relevant experience for people and businesses, helping over 2,500 merchants and 600.000 end customers. We were founded with the belief that technology can help us do great things if used right – and that a modern banking and shopping experience is based on people’s actual needs and wants. That’s how it becomes accessible, simple – and powerful.
Digital, yet personal that is.
Northmill Bank: Conclusion
Northmill Bank in Sweden offers innovative, fully digital, and user-friendly financial services. Their products are very tightly coupled: a bank account with an overdraft, a modern debit card, and a high-yield savings account. Combine that with a consolidation loan and/or insurance. It’s a win. The best part? All with no fees.
The flexible account credit lets you pay ultralow interest only on what you use and repay any time you want. It doesn’t introduce complicated invoices or statements and enables you to make money transfers too, unlike credit cards.
The main drawbacks are: no payment protection for goods, no travel insurance, and no rewards, cashback or point system. Those are typically the main benefits of credit cards, but hey, those come at the cost of maintenance fees and more hassle. If you are a travel or point freak, are looking for cashback, or getting good insurance when you travel, then Northmill is NOT for you yet.
However, if you want a simple and powerful account with extra credit for large purchases, Northmill Bank is the easiest solution, fully digital and from your phone.
Another thought: you can combine Northmill with Curve to get all the travel features and payment protection, plus the zero fees from Northmill.
I hope you enjoyed this post, and as usual, let me know your comments, feedback, and suggestions.