Frankfurt Competitor Scalable Capital has shown the way, and now Trade Republic is following suit: From October, the Berlin neobroker is offering 4.0 percent interest on customers’ uninvested assets. The company announced this on Friday morning.
The offer is valid for new and existing customers with a balance of up to 50,000 euros; there is no time limit. According to the company, the interest income is credited monthly.
Trade Republic is reacting just one day after the interest rate decision by the European Central Bank (ECB). On Thursday, the ECB announced the tenth increase in key interest rates in a row in the fight against inflation. This also meant that the deposit interest rate that the ECB pays banks when they park money with it rose to 4.0 percent.
Trade Republic currently only has a securities trading bank license and therefore also works with the partner banks Citibank Europe, Deutsche Bank and Solaris. According to its own information, the neobroker passes on the interest received from the partner banks to the customers – and therefore does not pay on top of it. According to the company, customer funds are protected by statutory deposit protection up to 100,000 euros.
With this offer, Trade Republic positions itself in the top group among interest rate offers. Customers have so far received 4.1 percent interest on the Follow My Money wealth platform. 4.01 percent is available from the sales financing company Bank11. The bank of the comparison portal Check24, C24, like Trade Republic, also offers 4.0 percent interest – as has its competitor Scalable Capital since September.
Unlike the competitor’s offer, the interest rate at Trade Republic is not tied to any conditions. On the one hand, Scalable customers must opt for the “Prime plus” subscription for the first time, which costs 4.99 euros per month. On the other hand, customers must carry out at least four securities transactions between September and December of this year.
At Trade Republic, however, customers have to actively activate the offer in the app. Until the beginning of the year, the Berlin neobroker had focused entirely on trading stocks or ETFs. Since then, the company has also been soliciting deposits from customers, initially with two percent interest.
They wanted to be “the home for customers’ assets,” said Trade Republic co-founder Christian Hecker at the time. This includes, on the one hand, investing in stocks and savings plans, but also the interest rate offer.
Trade Republic is also launching into bond trading
In addition to the interest rate offer, the neobroker also announced a new product feature on Friday morning. Customers can now invest in 500 government and corporate bonds, starting with a volume of one euro.
According to the company’s own information, there is no order commission for trading, as is the case with stock trading; only a flat rate for third-party costs of one euro is due. “Bonds are an important asset class for benefiting from high interest rates in the long term, especially in the current environment,” said Hecker.
According to its own information, Trade Republic currently has over a million customers. The neobroker most recently collected 250 million euros from investors in June of last year – and increased the valuation to five billion euros.
more on the subject: Neobroker Scalable offers 4.0 percent interest