Frankfurt Trade Republic is launching a new offer: as the first German neo-broker, the company is now offering two percent annual interest on customers’ money balances. The Berliners announced this on Wednesday morning.
With the offer, the company wants to retain existing customers as well as win new customers. The offer is valid for both customer groups up to a credit of 50,000 euros, there is no time limit. According to the company, the interest income is credited monthly.
So far, Trade Republic has focused entirely on trading in stocks or ETFs, for example. Now the company is also promoting customer deposits. They want to be “the home for the customers’ assets,” said Trade Republic co-founder Christian Hecker. On the one hand, this includes investing in shares and savings plans, but also the interest rate offer.
The company is currently feeling the effects of the changed market environment. While neobrokers benefited from the trading hype triggered by Corona in 2020 and 2021, investor behavior changed last year with the stock market collapse. “Our savings plan business continues to grow, but trading volumes in shares have declined,” said Hecker.
Top jobs of the day
Find the best jobs now and
be notified by email.
The neo-broker did not want to say how high the margin is that Trade Republic earns with the new offer per customer. A spokeswoman only said: “As a tech company, we have the advantage that we have lower costs due to the high degree of digitization.” The company passes on the saved costs to the customer, according to the spokeswoman.
Ralph Wefer from the comparison portal Verivox praises the interest rate: “An offer of two percent interest per year on the money balance (overnight money) is one of the top conditions on the German market.” Interest is currently one of the best means for banks, for example, to acquire new customers .
Banks are increasingly advertising with interest rates again
In the past few months, many banks have started to reintroduce interest rates on call money in response to the interest rate hikes by the central banks. These include ING Germany and Consorsbank.
>> Read also: Comment – The government needs to rethink its approach to start-ups
According to Trade Republic, it currently has over a million customers. Most recently, the neobroker collected 250 million euros from investors in June of last year – and increased the valuation to five billion euros.
According to the company, customer funds are protected by the statutory deposit guarantee of up to 100,000 euros. They are held by the partner banks Citibank Europe, Deutsche Bank and Solaris.
More: Will these 36 billion German start-ups survive the crisis?