Trade Republic, the Berlin-based online broker, is attracting customers with a combination of commission-free trading, a user-friendly platform, and a notably high interest rate on uninvested cash. The company currently offers 2.00% per annum on cash holdings, a rate significantly exceeding those offered by traditional banks, according to multiple sources.
Founded in 2015, Trade Republic aims to democratize investing, allowing users to begin with as little as €1. This accessibility, coupled with the attractive interest rate, has fueled its growth, particularly among long-term investors and those seeking a return on funds held between investments. The platform supports trading in stocks, ETFs, bonds, cryptocurrencies, and derivatives, with trading hours varying by asset class – stocks and ETFs are available from 7:30 to 23:00 CET, crypto trading is 24/7, and derivatives can be traded from 8:00 to 22:00 CET.
While marketed as a “no order fee” platform, Trade Republic does charge a €1 external fee for each trade (excluding savings plans). Which means the actual cost of a round-trip trade – buying and selling – is €2. Despite this fee, the platform’s simplicity and the interest earned on uninvested funds remain key differentiators.
Interest Rates and Cash Management
The 2.00% annual interest rate on uninvested cash is a central component of Trade Republic’s appeal. This interest is calculated daily and paid monthly, offering users a flexible way to earn a return on their funds without locking them into long-term commitments. The funds remain fully accessible for withdrawal at any time. Trade Republic achieves this rate by distributing customer funds across partner banks, leveraging their collective interest-earning potential.
Beyond Brokerage: The Trade Republic Card
In May 2024, Trade Republic expanded its offerings with the launch of a debit card, available in both physical (€5 or €50 one-time fee, depending on the chosen design – “Classic” or “Mirror”) and virtual formats. The card provides several benefits designed to further integrate savings and investment. A “Saveback” feature offers a 1% rebate on card payments, credited to the user’s savings plan, up to a maximum of €15 per month (based on up to €1,500 in monthly spending). The card also includes a “Round Up” function, automatically investing the spare change from each purchase. Trade Republic offers unlimited free ATM withdrawals worldwide, up to a limit of €100 per withdrawal.
Investment Options and Savings Plans
Trade Republic allows investors to access a diverse range of financial instruments, including stocks, ETFs, and, uniquely for a European broker, corporate and government bonds with fractional trading starting from just €1. The platform also facilitates the creation of automated savings plans, allowing users to invest fixed amounts at regular intervals. Trade Republic waives the settlement fees associated with these savings plans, reducing the overall cost of investing.
Regulatory Oversight and Security
Trade Republic operates under the supervision of BaFin, the German Federal Financial Supervisory Authority, and the Bundesbank, Germany’s central bank. This regulatory oversight provides a degree of security and investor protection. The company emphasizes the transparency of its fund distribution practices, stating that customer funds are allocated to regulated partner banks, ensuring both security and peace of mind.
Limitations and Considerations
Despite its advantages, Trade Republic is not without limitations. The platform does not offer a demo account, which may deter novice investors. It also lacks direct access to US stock exchanges, meaning some US-listed companies, such as Reddit, are not directly available for purchase. Investors seeking a wider range of market access may find this restrictive.
The platform’s user base is primarily in Europe, though It’s also available in the United States. However, the availability of specific features and instruments may vary by region. Potential investors should carefully review the terms and conditions applicable to their location.
Competitive Landscape
Trade Republic operates in a competitive landscape of online brokers. EToro, for example, offers commission-free trading for ETFs and stocks in certain countries and incorporates a “social investing” feature, allowing users to copy the trades of other investors. However, Trade Republic’s focus on simplicity, combined with its attractive interest rate and low barriers to entry, positions it as a compelling option for both beginner and experienced investors. The company’s emphasis on providing a streamlined experience, coupled with its innovative features like the Trade Republic card, suggests a continued focus on attracting and retaining customers in a rapidly evolving financial market.
