Commercial Republic Card: a good offer?

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Written By Kampretz Bianca

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Neobroker Trade Republic has become known for its low trading costs for stocks, funds and ETFs. Furthermore, Trade Republic offers the best conditions for the money available daily, with 3.75% interest on money not invested in the clearing account. The interest rate was adjusted accordingly following the reduction of the European Central Bank’s deposit rate from 4.0 to 3.75 percent. Previously, these conditions were limited to an amount of up to 50,000 euros. This barrier will soon be removed, so even higher amounts will attract interest of 3.75 percent. However, it may take a few weeks for all customers to benefit from this, as the change will be implemented gradually, as Trade Republic explained in response to Finanztest’s request.

Tip: Depending on when you became a Trade Republic customer, you won’t automatically receive interest, but you will have to activate it in the app. To do this, you must select the “Money” tab and set the activation there under “Interest”.

The money is in partner banks

Important to know: The clearing account balance is only maintained virtually by Trade Republic. In fact, the account is maintained with partner banks. Cash up to at least 100,000 euros is available at all partner banks Deposit Insurance guaranteed. Customers have no influence over the bank where their money is held. Partner banks currently include Deutsche Bank, HSBC, JP Morgan and Citibank Europe. When asked, a spokesperson for the Commercial Republic said that the money would be distributed between up to two partner banks and, if the balance was greater, it would also be invested in money market funds. As funds are special assets, customers’ money is protected even in the event of bank failure. The app shows the customer how much of their balance is in which bank or in money market funds.

Tip: You can find a rating of Trade Republic conditions for securities trading in our test Neocorrectors in comparison. We show sensible alternatives to everyday money in our Daily Money Comparison.

The current account must come

Trade Republic also announced that it would also offer a checking account in the future. To this end, the transitional account can be transformed into a current account, if the customer so wishes. To make this possible, the neobroker first receives its own banking code. Current account functions should then be gradually activated for customers. The provider did not provide an exact timeline.

Debit card with no annual fee

In January, Trade Republic launched a no-annual-fee Visa debit card. Unlike credit cards, with debit cards the money is withdrawn directly from the account after making a purchase with the card. The card is linked to the Commercial Republic clearing account. The advantage: money stored here earns 3.75% interest. With the card, customers can pay online or in store and withdraw cash worldwide for free. One caveat: withdrawals of less than 100 euros incur a fee of 1 euro per withdrawal. Applicable Visa exchange rates for payments in foreign currencies must be visible in the app and there will be no additional fees. Two versions of the physical card are associated with a single issuance fee. The “Mirror” glossy card costs 50 euros, the “Classic” card costs 5 euros. The purely virtual card for your smartphone is free.

Tip: You can find credit cards with no annual fee in our test Credit card comparison.

Cashback for ETF Savings Plan

The special thing about the Trade Republic card: there is 1% cashback on every purchase, Trade Republic calls it “Saveback”. This means that 1 percent of the purchase value will be credited to the buyer, up to a maximum of 15 euros per month. That’s quite a lot: competition with free cards offers a maximum of 0.25 to 0.5% cashback. However, the refund money is not available for free, but is invested in an individually defined ETF or share savings plan. To do this, a savings plan of at least 50 euros per month must be created. Additionally, it should be possible to round up amounts at the time of payment and also have that amount automatically flow into a title. The money is then collected monthly and invested into the savings plan. Finanztest recommends investing the money as a base investment in a global equity ETF. At Trade Republic you can buy ETFs on MSCI World to save.

Tip: You can find all global ETFs in our fund finder Funds and ETFs in comparison.

Debit card now without waiting list

Trade Republic initially issued the card only through a waiting list, which was processed gradually. At the end of May, the Commercial Republic announced that the waiting list would be closed. Customers can now request their card on the app without delay. It was said that more than a million people in Europe currently use the card.

Conclusion: Cheap card and attractive interest rate

The Trade Republic card is a debit card with favorable conditions and interesting extras. It offers a comparatively generous cashback offer, which the customer cannot, however, freely use. However, it must be clear to customers that this will not result in big savings: even if you pay 500 euros per month with the card, you will only save 5 euros per month (60 euros per year) – not enough to build wealth, but a pleasant “gift”. The credit interest rate of 3.75% is also the highest.

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