The addition of interest brings Trade Republic more in line with its rival Freetrade in the UK, which has offered 3% interest for its paid 'Plus' subscribers since 2020 and is soon to launch in Trade Republic’s home market of Germany.
Trade Republic says the interest will be calculated in real time and paid monthly, letting investors gain even when they’re not invested in the market. Of course, rising interest rates are reversing the low and negative interest rate environment that has existed for over a decade, and which encouraged investment over savings to the benefit of trading apps and platforms.
In this new environment where 2.5+ per cent interest rates are quickly becoming the norm, Trade Republic is introducing a rate that it likely hopes will encourage existing investors to keep their cash where it is, and encourage new customers to both save and invest with it.
One thing to note is that Trade Republic says its rates are variable, meaning the company could drop them with little notice, and only apply on balances up to EUR 50.000.
Back in October 2022 the company announced expanding to 11 new markets. These include Belgium, Estonia, Finland, Greece, Ireland, Latvia, Lithuania, Luxembourg, Portugal, Slovakia, and Slovenia.
The core of the offer are free ETF and share savings plans. The Trade Republic Depot can be opened both in the app and on the desktop. There are no order commissions for the execution of an order. Customers only pay an external fee of EUR 1 per execution. Investors can invest in individual stocks, ETFs, crypto, or derivatives at Trade Republic.
This function was launched in October as well, with the company allowing investors broader portfolio diversification and access to all assets. With the purchase of fractional shares, real shares are transferred to the investor at Trade Republic. According to a Trade Republic representative, the introduction of fractional shares and ETFs advances the democratisation of wealth accumulation for users.
Trade Republic is still a young company, having obtained EUR 250 million in its Series C financing round in June 2022. The firm is supervised by the Federal Bank of Germany and BaFin (Federal Financial Supervisory Authority). The investment was led by the Canada-based pension fund Ontario Teachers. The fund primarily finances growth companies that are on the way to an IPO. Existing investors have also increased their shares.
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