German online investment platform Trade Republic says it will pay customers 2% annual interest on the cash balance in their account.
Trade Republic launched in Germany in January 2019 and expanded its service into Austria, France, Spain, Italy and the Netherlands in 2021.
Trade Republic became available in Ireland and several other European countries in October 2022.
The company claims over 1 million customers and has grown to c.700 employees. Investors include large VC firms Sequoia, Thrive Capital and Accel.
Trade Republic’s Series C investment round in 2021 and 2022 raised €1.1bn, including €250m from the pension fund for Ontario teachers.
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Co-founder Christian Hecker commented: "Exactly four years ago, we were among the first providers in Europe to introduce commission-free investing. Now, we are taking another step on our mission to make wealth accumulation possible for everyone.
“With the introduction of the interest, Trade Republic now doubles down on its mission to set up its customers for long-term wealth creation and saving up for retirement.
“With 2% effective annual interest per year, we are passing on the benefits of the new interest rate environment directly to our customers.”
The company said interest income is calculated in the app in real time and credited monthly and applies to cash balances of up to €50,000.
On its website, Trade Republic stresses that it is not a bank.
The company says funds in the cash account are held in an escrow account at partner banks Citibank Europe and Deutsche Bank.
According to the company: “The securities in your custody account are not covered by the deposit guarantee scheme. They are deposited by our custodian bank HSBC Germany in the corresponding depositories in Germany and abroad.”
Trade Republic is privately held and does not make financial disclosures relating to its trading record or current financial position available on its website.
Unlike some other players in the online trading space, Trade Republic offers computer desktop functionality as well as the app.
Trade Republic does not charge its customers any order commission. There is €1 of external fees to cover clearing and settlement, regardless of the size of the order. Savings plans for stocks and ETFs are offered completely free of charge.
Irish customers have access to a total of over 8,000 Irish, European, Asian and US stocks and 1,100 ETFs, real-time data, price alerts, a wide range of different order types and trading hours, from 7:30am to 11:00pm.
Savings plans, with which users can automate investing in the stock markets, are available for over 3,600 stocks and ETFs.
Hecker added "All Europeans need to have access to capital markets to start fuelling long-term investing, participate in economic growth and ultimately save-up for retirement.
“We built Trade Republic to enable them to do exactly that, and have now opened our doors to a total of 17 markets, so Europeans everywhere can finally take their personal finances into their own hands."
Hugo Suidgeest, country manager of Trade Republic in Ireland, said an account can be opened in the app as well as on the desktop by anyone fiscally and physically resident in Ireland with a smartphone, a European telephone number and a SEPA bank account.
