German trading app Trade Republic adds 2% interest to deposits

All investors who use trading app Trade Republic will now receive 2 per cent interest on their cash balances, without having to pay or subscribe.

The addition of interest brings Trade Republic more in line with its rival Freetrade in the UK, which has offered 3 per cent 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.

“With 2 per cent effective annual interest per year, we are passing on the benefits of the new interest rate environment directly to our customers. Every investor can now benefit directly and easily from interest”, said Christian Hecker, co-founder of Trade Republic. 

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.

Indeed, Hecker describes the move as making Trade Republic, “the most attractive place to save and invest your money.”

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 €50,000.