Do I have to pay taxes on forwarded interest?
For customers in Germany, capital gains tax is automatically deducted from interest payments. Interest income can be offset against realized losses from ETFs, accrued interest from the acquisition of bonds, and derivative losses that do not result in total losses.
In addition, interest income also counts as investment income alongside dividends and capital gains. As of this year, capital gains up to €1,000 are tax-free in Germany.
For customers outside of Germany, withholding taxes on interest are not applied. It’s up to you to declare interest income in your tax return according to your local tax laws.
Why is the credited interest different from what I calculated?
We pass on the ECB interest rate of currently 3.25% p.a. on all cash deposits – uncapped with the new Trade Republic IBAN.
Interest is accrued daily and paid out monthly. This means that on each day, at the end of the day, we determine the balance of your cash account and multiply this amount by the share of the applicable interest rate per year attributable to the respective day. Then all the values of the individual days will be summed up and the total amount will be forwarded to your cash account as a monthly payout.
Do I receive interest on my invested amount or only on my cash balance?
You will receive interest on your cash balance.
Do I receive interest on limit orders?
Yes, reserved amounts blocked for limit orders are included in uninvested cash.
Is my money safe?
Your cash deposits are distributed among partner banks, such as Deutsche Bank, HSBC or J.P. Morgan and for higher balances are further diversified into liquidity funds. Your deposits on each escrow account are protected with up to 100,000 € respectively. All relevant information on deposit protection of each partner bank can be seen in the app.
Cash deposited in the liquidity funds are directly held on a segregated custody account. Liquidity funds’ allocations follow the same strict safeguarding rules that are in place for stocks and cash deposits. This means that your assets are segregated from corporate assets. Hence, for liquidity funds, deposit guarantee schemes do not apply.