Aeldra is shutting down!
Global Neobanks are shutting down. This started in early August with an email from Aeldra’s banking partner, Blue Ridge Bank N. A. stating that they’ll be shutting down services for Aeldra accounts by August 31, 2022.
A few days later, Aeldra confirmed the news by sending a follow up email to all account holders.
What did Aeldra do, and why is its shutdown a big deal?
Aeldra was a neobank based in the United States. Its aim was to allow people with less capital to open a US bank account and access the US equity and debt markets. For example, if you want to fund your Webull account to invest in US stocks and ETFs you have two options to fund your Webull account. First is ACH which is free, and the other is wire transfer. ACH transfers only work with a valid US bank. It’s an intra-US bank transfer service, similar to our NEFT system.
Wire transfers are further divided into two categories, American Wire (requires a US bank) also known as FedWire and International Wire commonly known as SWIFT wire transfer. Webull has different charges for those. Inbound FedWire transactions are charged $8 flat and outbound FedWire at $25. Inbound International wire is charged at $12 and outbound at $45. This is exclusive of what Indian banks charge you for transfers.
So, you’ll typically spend about $75-100 to send funds to your Webull account, make a trade in the US Equity market and bring profits back to your Indian bank account. Aeldra solved this by eliminating the fund transfer charges as one could use ACH to move funds between Webull and Aeldra bank AC for free.
Okay, Aeldra really solved a big problem, but since it’s shutting down what are the alternatives?
If you google Aeldra alternatives you’ll find a bunch of alternatives, but only two of them come close. Here we’ll list them both.
1. Winvesta – A multi currency account and US stocks platform.
Winvesta offers two products to Indian customers. A multi currency account (currently web app only), and a stocks trading platform with support for over 1400 stocks (not all US stocks are available).
Let’s talk about the multi currency account (MCA) first.
Receive, save, convert, and spend globally in 30+ currencies including USD, GBP, and EUR.
Winvesta provides you a virtual multi currency account in partnership with currencycloud. The currency list includes USD, GBP, EUR, and even Asia Pacific currencies like INR, MYR, PHP, and IDR, but there’s a catch.
There are some restrictions with APac currencies like INR, MYR, PHP, and IDR. You can’t hold them, as in you only convert to these currencies when you have to make a payment in these currencies on the same day. You can however, hold other currencies in your account without any restrictions.
However, there are certain restrictions when it comes to transactions with apps like Webull. They decline webull transfers stating that they allow crypto trading on their platform. In reality, Webull doesn’t allow Indian residents to trade crypto on their platform, so there’s definitely some confusion, or perhaps conflict of interest.
Winvesta also operates a US Stocks trading platform.
In this platform you can buy and sell 1400+ US stocks, but they’re limited in number. For example you can’t buy or sell Taboola.com Ltd shares on Winvesta, but you can do that on Webull. So, it’s a curated list of US stocks that you’re allowed to invest in. Who cares about free markets anyway?
2. Zenus Bank
We tried using Zenus Bank, but during the signup process, both our credit and debit cards from ICICI Bank and HDFC Bank were declined. Apparently the Indian central bank, RBI has put more restrictions on card transactions leading to multiple failed transactions across international merchants and businesses.
Even Apple no longer supports payments with indian cards. You have to manually add money using UPI, (a proprietary technology built by NPCI) to pay on the app store for purchases and even subscriptions.
So, this remained untested due to regulatory friction.
The filters we used when creating this list were:
1. SSN – Requirement of Social Security Number. If a bank requires a social security number to operate then it won’t work for people based in India who are just trying to get started with US equities. Most banks require this.
2. A valid US visa – If a bank requires a valid US visa then it’s meant for those who are moving to the US. Not truly borderless banking. We filtered Zolve in this way.
Now you might be wondering that Aeldra only provided US bank accounts, not brokerage accounts, so what about Webull alternatives? What about brokerages that allow Indians to buy US stocks?
The clash with Webull
The American zero commission brokerage platforms like webull allow you to trade cryptocurrencies alongside equities and ETFs. This becomes a problem for anyone dealing in money transfer to Webull, especially with banks like HDFC Bank.
It’s a violation of FEMA guidelines to invest in crypto currencies through international remittance, hence banks ask you to submit an undertaking before the transfer, stating that you’ll not be investing in cryptocurrency through the remitted funds. After the transfer you’re asked to upload the transaction statement of your webull account to confirm the same.
That’s fine. The Banks are just doing their job, but despite offering crypto trading, Webull doesn’t allow Indian residents to trade crypto. So, what are the banks really doing? Adding unnecessary friction.
Winvesta vs Webull
Winvesta also facilitates trading of US equities. This means you can directly buy and sell US stocks from Winvesta App. This makes them a direct competitor of Webull.
Do they not allow deposits and withdrawals from Webull due to regulatory problems? Or is it because of their own conflict of interest?
We don’t know for sure, but one thing is clear. The Government of India, its central bank RBI and their restrictive policies will definitely bring problems home.
A Dollar is ~ 81 Rupees right now. I dont think it will be any better in 2025. If I’m right it might be close to 90 by that time. Only time will tell.
Anyway, back to Winvesta vs Webull, my Winvesta trading account is still pending for verification, while I’m actively using Webull to invest in US stocks. Yes, it’s expensive now, so I’m transferring money to and from India less, but that’s okay because a lot of good companies are listed in America.
Aeldra will be missed. At least by me. Aeldra made it painless to move funds from my Indian bank account to the US and to Webull. Same day transfers using HDFC Bank and FedWire transfers to Aeldra partner, Blue Ridge Bank N.A. for just INR 500 + GST.
To the class of people known as Entrepreneurs. Here, you have an opportunity. Grab it!