Strong points
Trade Republic is the quintessential European broker with headquarters in Germany and providing services to 17 countries within the EU. It was launched in 2015 to enable wealth creation for more people through simple, low-cost, and flexible financial investments.
This goal appears to have been achieved considering that there are now over 4 million users on the platform. Furthermore, according to the website, Trade Republic has become the largest savings platform in Europe having over 35 billion EUR in assets under management.
Trade Republic
Trade Republic
A lot of this success can be attributed to the choice made to keep Trade Republic a mobile-only service. As a result, the platform is very accessible to make investing easier for everyone, especially beginners who don’t have to worry about installing and running complex desktop programs.
Over the years since it was established, the company has maintained high standards of trust, first through a banking license from the German Federal Bank (Deutsche Bundesbank) and a brokerage license from BaFin. Most recently, it also received a full banking license from the ECB so that it can now offer even more products and services.
With so much going for Trade Republic, it is easy to imagine that the platform will continue to grow due to the quality of service it provides to its clients. Besides, it has the backing of some of the world’s top VCs and investors, so let’s see why it is so attractive to so many people.
Trade Republic is well-known for its offerings of stocks and ETFs just like its US-based rival Robinhood. However, you can also invest in cryptocurrencies, corporate and government bonds, as well as derivatives on various markets such as Forex, commodities, and indices.
In total, there are more than 8,500 assets available for trading, providing you with sufficient variety no matter which markets interest you the most. Cryptos are perhaps the hottest asset class in 2024 and here are the various coins you can invest in through Trade Republic.
You should expect to find the most popular cryptocurrencies on the platform such as Bitcoin (BTC) and Ethereum (ETH). But there is no shortage of altcoins from the most well-known like Ripple (XRP) and Cardano (ADA) to obscure ones like Bitcoin Cash (BCH) and even stablecoins like Tether USD (USDT).
In short, Trade Republic is a venerable buffet of cryptocurrencies that should be enough for all investors. And because this market is open 24/7, you can trade cryptocurrencies at any time of the day wherever you are through the platform on your mobile phone. However, it’s important to distinguish the platform from a crypto exchange, because it isn’t.
When you buy cryptocurrencies on Trade Republic, the company purchases the chosen crypto from reputable exchanges and holds them with a partner custodian. This ensures that your cryptocurrency holdings are secure from hackers or loss, but you cannot transfer cryptocurrencies to another wallet because you don’t hold the private keys.
Despite the popularity of cryptocurrencies, Trade Republic is primarily known as a stocks and ETFs broker. There are currently more than 8,500 stocks and ETFs sourced from global exchanges in Europe, the UK, and the US through the platform’s partnerships and connections to the global banking system.
Therefore, you can confidently invest in assets from around the world and access multiple markets and assets for a more diversified portfolio. Not only does this exposure ensure your portfolio is more diversified, but could also translate to better performance.
And for even more diversification and security, consider investing in bonds, which were added in September 2023. Now you can also invest in 500 liquid government and corporate bonds and earn interest just as you would from a bank.
Remember that all these are real assets you will be investing in and not derivative products. Thus, you will own real stocks and ETFs in your investment account when you start investing, and will even be entitled to receive dividends.
What’s remarkable, though, is that you need only 1 EUR to purchase any of the above real assets. That provides an ideal gateway into the world of financial investment for everyone in the EU, backed by the guarantee of fund security afforded by Trade Republic.
Trade Republic
Trade Republic
When you invest in real assets, you only have a profit when the value of the asset rises – buy low, sell high. Derivatives are different because holding one does not mean you own a real asset. Instead, derivatives are a tool for tracking the value of an underlying asset, which could be any financial asset.
The beauty of this is that it becomes possible, therefore, to track the asset’s value in either direction, up and down. This means you can now profit both when the asset prices rise or drop to benefit even when there is a downturn in the market. Moreover, margin trading becomes possible whereby you get to trade assets with a lot more value than you have in capital.
Among the asset classes you can trade on Trade Republic as derivatives include stocks, ETFs, Forex, and commodities. With derivatives, your choice of tradeable assets becomes even more varied to make the platform suitable for all traders’ requirements.
For those who want to make long-term investments toward building wealth and maybe retirement, you may want to consider this option. Rather than investing in individual assets, savings plans consist of a basket of assets grouped to achieve a particular goal.
They function like ETFs or mutual funds but with greater diversity, flexibility, and control. For example, you can invest in a savings plan that focuses on ESG stocks or a specific sector of the economy such as technology, pharmaceuticals, etc.
Whatever your long-term goals, Trade Republic has a plan that meets your needs as it currently has more than 3,500 investment plans. With automated periodic purchases, you can ensure that your investments continue to grow gradually over time, depending on how often you want to make deposits.
For years, Trade Republic has served as an online bank thanks to a banking license in Germany. Now that it has also been licensed by the European Central Bank (ECB), it can operate as an online bank in 17 countries.
The advantage of using Trade Republic, though, and probably the reason so many people have chosen the platform, is that it provides a 4% interest on cash deposits. Compared to the average 3% interest you can expect in most commercial banks, this is a significant advantage for anyone seeking to grow their wealth and possibly earn passive income.
Then you also get a free virtual debit card or a 5 EUR physical debit card to use for online and physical spending. You’re not charged a monthly subscription fee on the card nor any ATM withdrawals for amounts above 100 EUR.
It also makes saving more convenient by rounding up card payments, with the spare change automatically invested in your account. Plus, when you make payments into your savings plan from the card, a 1% saveback is granted as a reward.
To start investing through the platform, you just need to follow a few simple steps outlined below. Since the service is only available on mobile, the first thing you will need to do is download the Trade Republic app from the appropriate app store available on iOS and Android.
Upon installing and opening the app on your phone, the first thing you will be asked is to enter your phone number. This will be used to confirm your identity later as well as secure your account through two-factor authentication, hence its importance.
When you do enter your phone number, an OTP message will be sent to confirm you’re the owner of the device. Then you will be asked to enter a PIN to secure the app, preventing unauthorized access and verifying transactions on your account.
Now it’s time to provide your personal details to be associated with your account. These include your full legal name, email address, residence, date of birth, and citizenship.
Remember that these details will be confirmed later, so it’s prudent to ensure you enter them correctly.
In line with regulations, companies need to verify their users’ identities and residences, which is why Trade Republic will ask you to provide certain documents. For identity verification, you will need either a passport, national ID, or driving license. Meanwhile, you will need a recent utility bill, bank statement, or residence permit to prove your current area of residence.
You will only need to take a picture of the required documents through the app and they will be uploaded instantly. Verification of the supplied documents shouldn’t take long and might only be a few minutes or hours.
In the final stage of this process, you will be asked about your knowledge and experience, along with several terms and conditions for you to accept. Your expertise helps to determine which trading conditions will be suitable and how much hand-holding you may need.
That’s it! You have a trading account ready to move to the next step.
From the Wealth or Cash tab in your device, tap on Transfer then Add from where you will be asked which deposit method you want to use.
Your deposit should be processed instantly, although it may take a short while for SEPA transfers depending on your bank, the amount, and your location.
After your deposit has been processed, it’s time to choose an investment you would like to perform. Trade Republic has a lot of assets to invest across different asset classes, but for this tutorial, we’re going to show you how you can buy your first government bond.
From the app, tap on Invest and then scroll down or search for the asset you want to purchase. After analyzing the asset you’re interested in, set your trade parameters including the value of the trade, order type, and frequency (recurring buy). Then review the trade details including the costs and tap on Buy to complete.
The platform does not charge a commission when you place an order, but you will still be charged 1 EUR for each trading order regardless of the transaction value. When it comes to savings plans, though, there is no fee for placing the order(s) but a 1 EUR fee is charged when you sell.
This amount is higher than that of most other online brokers offering zero commissions, but it remains low enough to be competitive. Besides, the small fees arise from the external settlement costs involved with the clearing houses which is how Trade Republic makes a profit along with rebates from trading partners.
As for trading derivatives, a floating spread is charged based on the XETRA reference market. Trade Republic claims its spreads are 43% lower than the reference market, but we have observed that the spreads are sometimes higher than the industry average. As such, trading on the platform can be costly if you are an active trader.
Additional fees include those incurred during cash deposits, and ordering a physical debit card. The first deposit is free, but subsequent deposits incur a commission of 0.7% when you use a credit card or Google Pay. Deposits by SEPA are free. Meanwhile, there is a 5 EUR one-time fee when you order a physical card. The virtual debit card is free.
Trade Republic
Trade Republic
Trade Republic is a European bank that has been licensed by the ECB to operate in 17 countries in the EU. Before this had been granted, the company had been granted a banking license by the German Federal Bank (Deutsche Bundesbank) and a brokerage license by the German Federal Financial Supervisory Authority (BaFin), both of which it still holds.
Unfortunately, US residents can’t open an account with Trade Republic, but the platform is available for international traders. Such strong regulation makes this a trusted company with strong roots and proves that it is legitimate.
Given that Trade Republic holds two banking licenses from the ECB and Deutsche Bundesbank in addition to a BaFin license, using the platform is considered secure. The banking licenses, in particular, provide a high degree of security, as banks generally undergo more thorough scrutiny by authorities, and Germany is known for its strict controls. Furthermore, all banks fall under the European Directive on Deposit Guarantee Schemes. This system protects depositors’ funds, and you can be reimbursed up to 100,000 EUR if a bank goes bankrupt. Such a scenario is quite unlikely because Trade Republic only works with reputable banking partners such as Solarisbank, Citibank, and Deutsche Bank to safeguard client deposits, but it’s always good to have a safety net.
