Trade Republic is revolutionizing banking in France by introducing a current account that offers a 3% interest rate with a French bank card and IBAN, without any conditions or deposit limits. This account enables direct debits and salary deposits, and is protected by the European deposit guarantee scheme. Additionally, Trade Republic launches a commission-free Equity Savings Plan (PEA), enhancing financial planning options for clients while challenging traditional banking norms in the country.
Discover Trade Republic’s Revolutionary Current Account
Trade Republic is shaking up the banking scene with its latest offering: a genuine current account that comes with a French bank card and IBAN, all while providing an impressive 3% interest rate. There are no conditions or deposit limits attached to this account, setting a new standard in the market. Additionally, Trade Republic is expanding its services in France by including the PEA (Plan d’Épargne en Actions) without any commission fees.
The Rise of Interest-Bearing Current Accounts in France
The idea of earning interest on a current account in France has long felt like an unattainable dream. Despite regulations changing in 2007 to allow deposit remuneration, the practice never gained traction. Traditionally, French banks have offered a non-interest-bearing current account for transactions and a separate savings account for interest accrual.
This conventional approach is now being disrupted by innovative banking entities. For example, Sumeria, launched by Lydia Solutions last May, has already been rewarding its clients with a 2% interest rate on their deposits. Following suit, Trade Republic has now introduced a similar offering.
As of January 9, Trade Republic, a German neobank now operational in 17 European nations, has made a true current account available to its new clients in France. This account features a French IBAN, enabling users to set up direct debits and receive salaries directly into their account.
With a competitive 3% gross interest rate (2.10% net after PFU), calculated daily and paid monthly, this account is backed by the European deposit guarantee scheme for amounts up to €100,000 per client. As of late 2023, Trade Republic has officially transitioned into a fully-fledged bank after obtaining its license in Germany and establishing a registered branch in France with regulators like the ACPR and the AMF.
Trade Republic’s interest rate is closely tied to the European Central Bank’s deposit rate, allowing the neobank to implement an innovative “hybrid system.” According to Matthias Baccino, the director of European markets at Trade Republic, this system uses both direct ECB deposits and a money market fund. Clients’ funds are automatically invested in this fund when not in use, ensuring optimal returns.
Furthermore, Trade Republic is also launching the Equity Savings Plan (PEA), which it claims is the only commission-free option available in France. Vincent Grard, the director of Trade Republic France, emphasizes the importance of the PEA for financial planning, highlighting its key benefits like diversification, lower fees, and tax advantages, creating a robust framework for wealth accumulation.