While German startup Trade Republic is better known as a mobile app that helps you buy and sell stock, the company is adding interest on uninvested cash. Users who hold cash in their Trade Republic account will receive 2% in annual interest.
With this new feature, Trade Republic will likely attract new customers who are looking for higher interest rates as inflation impacts the savings of European consumers. Of course, the company probably hopes that users will also start trading stock with its app. Trade Republic makes money from payment-for-order flow and some small fees.
More precisely, Trade Republic says that interests will be calculated on a daily basis and the startup credits user accounts once per month. Users only generate interest on cash balances up to €50,000. For now, the company promises 2% APY so it’s going to be interesting to see if it can maintain a high interest rate over time.
“With 2% 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”, co-founder Christian Hecker said in a statement.
Trade Republic currently operates in 17 European countries and was one of the fintech startups that raised a mega funding round in 2021. It reached a $5 billion valuation following its $900 million round.
2022 was a bit different. The company announced a $264 million (€250 million) Series C extension but also laid some people off. In addition to shares, Trade Republic also offers exchange-traded funds (ETFs), derivatives and cryptocurrencies.
Trade Republic, a popular stock trading app, adds 2% interest on cash by Romain Dillet originally published on TechCrunch