On January 9, 2025, Trade Republic launched its PEA (Equity Savings Plan), and there were many skeptics. How was a German neobank going to be able to compete with well-established giants like Boursobank or Fortuneo, with their PEAs at reduced fees? To understand, we had to test the application. The promise: opening in 5 minutes and orders displayed at €0 for “programmed savings plans”. This last point was the most intriguing because, until now, automatic investment was the monopoly of life insurance.
Moving your PEA to Trade Republic was much faster than expected: a matter of a few days. Getting started is easy, the interface is clean: we find its PEA in the Savings section, Charts for each stock or ETF are immediately displayed with time scales like “one day”, “one week”, “one year” and “max”. We thus have a global view of the portfolio which allows us to monitor its performance, the total of its payments and its savings plans, at a single glance. This was the first big difference compared to other apps: readability. No need to go looking for charts on Google anymore: they are there. There are still a few drawbacks to navigation: when you are in a section, pressing the back button closes the application. You have to swipe down to go back.
© Screenshot Trade Republic
The PEA savings plan, a first in France
What motivates many customers to switch to Trade Republic are the PEA savings plans. Until now, automatic scheduled investments only existed for life insurance. Trade Republic now offers them directly in the PEA. BoursoBank did it around the same time, but with an offering limited to only 8 BoursoInvest funds. And at Trade Republic, it’s no minimum and no fees.
The principle: we choose a share or ETF eligible for the PEA among the 2,000 available on the platform, we set a maximum amount to invest, and we define the trigger frequency – every week, twice a month, every month or every three months. The plan runs automatically, without intervention. The money is taken from the current account (paid at the ECB rate, i.e. currently 2% gross) if the PEA pocket is empty.
© Screenshot Trade Republic
Two technical points to understand before getting started. First, unlike the securities account, the PEA does not allow the purchase of fractional shares. At execution time, the plan purchases as many shares as possible in the limit of the amount set. If the price of a single share exceeds this amount on D-day, the plan will not be executed: it is therefore better to allow sufficient margin. Second, these plans are not limit orders: they execute at the market price on the scheduled day.
© Screenshot Trade Republic
The advantage of savings plans
It is no coincidence that Trade Republic has made its savings plans free: a large part of the group’s communication is based on the advantages of investment long term, planned, with discipline. This mechanically reduces the risk and smoothes the entry point. The company’s Senior Advisor, Matthias Baccino, often repeats this himself. We call this DCA, or regular scheduled investment (Dollar Cost Averaging): by buying at regular intervals, we sometimes buy high, sometimes low, but we smooth mechanically its average cost price. On a World ETF, the method has shown superior results over a long period of time to market “timing” attempts, which consist of trying to guess the right time to invest. No one does it well consistently, not even professionals – let alone individuals.
© Screenshot Trade Republic
And for those who want to keep control of their one-off orders, it remains possible to place classic orders (market or limit price), at the fixed price of 1 euro per transaction. One nuance, however: for orders below 200 euros, this flat rate of 1 euro exceeds the ceiling of 0.5% provided for by the Pacte law.
So how does Trade Republic get paid?
Trade Republic’s “no fee” model does not mean free. The platform executes orders via LS Exchange, a private marketplace, and not directly on Euronext. On savings plans, it is remunerated with the spread, the difference between the purchase price and the sale price. This cost is invisible, although generally small. In practice, this spread is reasonable on the most liquid ETFs purchased during Euronext opening hours (9 a.m. to 5:30 p.m.). It becomes more significant on small caps, rarely traded products, or if an order is placed outside market hours.
© Screenshot Trade Republic
