Trade Republic launches share savings plan to rival incumbents
Trade Republic, the German stock trading app, has unveiled its free share savings plan.
The fintech has joined the country’s eight established brokers, but it claims to be the first to bring consumers the service for free.
Trade stocks, exchange-traded funds (ETFs) and derivatives are all free of commission in the plan. But Trade Republic will charge a €1 flat rate for third-party costs per trade.
Users can make a minimum investment of €10. And because many stocks are priced above this, Trade Republic is also offering fractional shares.
The big difference between this account and those of incumbents is the number of shares available. Savings banks have traditionally offered around 580 shares with these sorts of plans.
But Trade Republic is offering 1,000 shares, just shy of double what the competition has offered until now.
The fact the account is free is also significant. Established brokerages such as Consors or Sparkassen-Finanzgruppe’s S-Broker take fees between 1.5 and 2.5% of a user’s savings amount.
Whilst it is a start-up, the fintech already has a German banking licence. This means users can enjoy statutory deposit insurance of up to € 100,000.
In April, Trade Republic landed €62 million in one of the largest Series B funding rounds Germany has ever seen.
“We see saving as our biggest growth path in the years to come,” co-founder and CEO Christian Hecker told TechCrunch in April.
Available in Germany and Austria, the app only launched last year. It already has 150,000 investors using its platform.
It has long made its money by charging €1 in fees to customers who want to buy and sell shares, exchange-traded funds (ETFs) and derivatives.
This means, far from losing it money, the new free savings share plan is made up of a tried and tested revenue stream model.