Banking: Trade Republic launches a current account bearing 3% without conditions

The German fintech Trade Republic is strengthening its offering in France with two new products announced this Thursday, January 9: a current account paying 3% and a stock savings plan (PEA). Two solutions intended to attract more French customers.

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Small revolution in the Trade Republic galaxy. The savings and investment application announced the launch of two new products this Thursday, January 9. First, an interest-bearing current account: until now, the fintech has already remunerated the cash deposited by its customers on the application at the rate of the European Central Bank (ECB). But it was, like other savings or payment solutions, a sort of savings book, without the possibility of making payments via an account, for example.

From now on, this new current account will benefit from the same functionalities as in any bank, “with the possibility of benefiting from a French IBAN, and therefore of making transfers, authorizing direct debits, and providing a RIB to your employer to receive your salary”explains Vincent Grard, France director of Trade Republic. With a major difference however compared to a “traditional” bank, since this current account will be remunerated annually, for the moment at a rate of 3%, and without ceilingunlike a regulated booklet (Livret A, LDDS, LEP, etc.). On the other hand, unlike the latter, the single flat tax (PFU or flat tax) of 30% will apply to the interest received.

An innovation in which a competing application, Sumeria (formerly Lydia), had already launched, but on which interest is only paid monthly on the express condition of making a certain number of payments via a paying card offered. At Trade Republic, we assure that the payment of interest will be without conditions of payment or use of “trading” functionalities, even if a debit card offer also exists.

A “trading” offer adapted to the advantageous tax framework of the PEA

In addition to this current account, the user will now also have access to a stock savings plan (PEA). Until now, financial securities (shares, bonds, ETFs, etc.) acquired via the application were stored in a securities account. An envelope on which dividends and interest are taxed annually at 30% (flat tax). With the integration of the PEA, Trade Republic intends to provide its clients with a more advantageous tax framework: “As long as a PEA remains open, no taxation applies if the gains are reinvested, and after 5 years, they are exempt from income tax”recalls Vincent Grard. As a bonus, as with its securities account, the application does not charge fees on order placements, provided they are scheduled.

Two new features, therefore, specially intended for French customers, and thanks to which the German bank – which now has a branch in France – intends to expand a base which already has one million customers in France. Across Europe, Trade Republic has doubled its number of customers in one year, from 4 to 8 million.