Is Trade Republic safe? Everything you need to know

Trade Republic is a low-cost bank and brokerage that offers a wide range of products, including stocks, ETFs, bonds, derivatives, and cryptocurrencies. It operates in 18 European markets and has over 10 million clients, with €150 billion in assets under management.

But is investing through Trade Republic safe? How are my assets protected? Are they in my name? In this article, we will answer all these questions by analyzing how your capital is protected and what kind of safeguards you can expect. Read our full Trade Republic review.

Highlights:

• Regulated by reputable authorities: BaFin (Federal Financial Supervisory Authority) and the German Federal Bank (Bundesbank);
• Operates under MiFID II regulations, such as asset segregation, record-keeping, and restrictions on the use of client assets;
• Full banking license from the European Central Bank (ECB) since December 2023;
• Investment asset protection of up to €20,000 per investor (German Investor Compensation Scheme);
• Deposit protection of up to €100,000 per investor at each partner bank (German Deposit Guarantee Scheme);
• Cash above the deposit threshold is allocated to money market liquidity funds, which are segregated but not covered by deposit insurance;
• Trade Republic does not run a securities lending programme, so there is no opt-in (or opt-out) for having your stocks and ETFs lent to third parties;
• Payment for order flow (PFOF) was banned across the EU on June 30, 2026. Trade Republic no longer routes all orders to LS Exchange (Lang & Schwarz) and now executes on its own BaFin-authorised infrastructure;
• Interest on uninvested cash is paid by Trade Republic Bank GmbH itself, not by the partner banks;
• Trade Republic is a private company (not publicly listed) and has a relatively short track record (founded in 2015).

Video summary

Who regulates Trade Republic?

Trade Republic, whose legal name is Trade Republic Bank GmbH, is regulated by BaFin (Federal Financial Supervisory Authority), the financial markets regulator in Germany, and the German Federal Bank (Bundesbank). These are considered "top-tier" regulators.

This means the company must comply with strict rules on financial operations, risk management, customer protection, and anti-money laundering measures. Additionally, Trade Republic holds a banking license from the European Central Bank (ECB), allowing it to offer banking services such as deposits and loans.

Trade Republic Bank GmbH is the single contracting entity for clients across all 18 markets where it operates. If you open an account in Portugal, Spain, Italy or Ireland, your counterparty is still the German bank, supervised by BaFin, the Bundesbank and the ECB - local branches change the IBAN and the language of support, not the regulator or the protection scheme.

^{Regulatory information as of August 2026, based on BaFin's public register and Trade Republic's published legal information.}

Trade Republic obtained its full banking license from the European Central Bank (ECB) in December 2023, which significantly strengthened its safety profile - it now holds customer deposits directly under the EU's strictest banking framework, rather than relying on partner banks alone.

What the banking licence actually changes for clients

The banking licence is often marketed as if it made the platform "safer" in every respect. In practice, it changes three concrete things:

• Your cash is a bank deposit, not client money held by a broker. That is what brings it under the German statutory deposit guarantee scheme of up to €100,000 per client, instead of only under MiFID client-money safeguarding rules.
• Trade Republic can pay interest on that cash itself and can offer banking products such as an IBAN, a card and loans.
• It is prudentially supervised as a bank, with capital and liquidity requirements and ECB oversight under the Single Supervisory Mechanism.

What it does not change: your stocks, ETFs and bonds are not deposits and are not covered by the €100,000 guarantee. They are covered by custody and segregation rules, with the €20,000 investor compensation scheme as a last-resort backstop. This distinction is the single most important thing to understand about Trade Republic's safety.

Protection of financial assets vs. deposit protection

When using Trade Republic, you will have two main types of assets in your account: deposits and financial assets (excluding cryptocurrencies). These are treated differently:

Deposits

• Your uninvested cash is distributed among partner banks such as Citibank Europe, Crédit Agricole CIB, Deutsche Bank, HSBC Continental Europe, J.P. Morgan SE, Natixis CIB, and SEB AB. You can find more information here.
• Each escrow account at a partner bank is protected up to €100,000 per investor under the German deposit guarantee scheme.
• Important: For higher balances (only if you have activated your Trade Republic IBAN), funds are further diversified into liquidity funds (money market funds). Money held in these liquidity funds is not covered by the deposit guarantee scheme - instead, it is held on segregated custody accounts and falls under the same safeguarding rules as stocks and ETFs (German Investor Compensation Scheme, up to €20,000 in case of fraud).

Interest on uninvested cash

The interest is paid by Trade Republic Bank GmbH itself, not by the partner banks where the cash physically sits. The partner banks are part of the safeguarding arrangement, not the source of the rate you see in the app.

• Standard rate: 2.25% per year, with no upper limit on the balance. Trade Republic tracks the ECB deposit facility rate, which has been 2.25% since June 17, 2026, so this rate moves when the ECB moves.
• New clients: a promotional 3.00% per year on balances up to €50,000, available in eligible markets. Above that amount, and once the promotional period ends, the standard rate applies.
• Conditions: interest accrues daily and is paid out monthly. There is no minimum balance, no lock-up and no need to trade to qualify.

Two caveats worth knowing. First, interest is paid on cash, so money you move into liquidity (money market) funds earns the fund's return instead, and that portion is not deposit-protected. Second, the rate is variable and can be changed at any time, so treat any headline number, including the ones above, as a snapshot.

Financial assets

• Your financial investments are completely segregated from Trade Republic. The custodians are HSBC Germany and Clearstream.
• These assets are legally owned by the investor. This means you will remain the owner of your securities, regardless of Trade Republic's financial situation;
• Your assets are covered by the German investor compensation scheme, which compensates for any unrecovered asset losses up to 90% (with a maximum of €20,000).

It is worth being precise about what the €20,000 is for. It is not a fund that reimburses you if your shares fall in value, and it is not the first line of defence either. Because your securities are segregated and held at HSBC Germany and Clearstream, in an insolvency they would simply be transferred to another broker - they are your property and do not form part of Trade Republic's estate. The compensation scheme only steps in for the residual case where segregation failed, for example through fraud or gross record-keeping failures, and even then it covers 90% of the shortfall up to €20,000.

Securities lending

Some brokers generate extra revenue by lending client shares and ETFs to third parties, usually short sellers, and this introduces counterparty risk if the borrower fails. Trade Republic does not operate a securities lending programme for retail client assets, so there is nothing to opt into or out of. Your stocks and ETFs stay in custody and are not lent out.

Practical examples:

• Financial Asset Protection: Imagine you have €50,000 invested in stocks on Trade Republic. If the company were to go bankrupt, your assets would be protected as they are held separately by custodial banks. If there were issues with segregation, the German investor compensation scheme would cover up to €20,000. In this scenario, the maximum loss would be €30,000.
• Deposit Protection: If you had €100,000 in cash deposited at a single partner bank and Trade Republic went bankrupt, that amount would be fully protected by the German deposit guarantee scheme. Note however that for balances above €100,000, the excess is typically allocated to liquidity (money market) funds, which are not covered by deposit insurance but are held in segregated custody accounts as your property. In a fraud scenario, the German Investor Compensation Scheme covers up to €20,000 for these MMF holdings.

Regulatory developments

Trade Republic historically derived a meaningful share of its revenue from payment for order flow (PFOF) - the practice of routing client orders to specific market makers in exchange for a rebate. In Trade Republic's case, effectively all orders were routed to LS Exchange, operated by Lang & Schwarz, as sole market maker.

That model ended on June 30, 2026, when Germany's temporary exemption expired and the EU-wide PFOF ban under MiFIR took full effect. PFOF is no longer permitted in the EU, and Trade Republic no longer routes orders to LS Exchange under a rebate arrangement.

By January 2026, Trade Republic stated PFOF accounted for less than 30% of its revenue (down from one third when it received its banking licence). To prepare for this transition, a Trade Republic subsidiary obtained a BaFin licence in January 2026 to operate a multilateral trading facility (MTF). Since July 2026, orders are executed on Trade Republic's own BaFin-authorised infrastructure under two models:

• Best Price (€1 per order, the default): Trade Republic itself acts as counterparty and fills the order at the best available price from an aggregated order book built across the relevant liquid reference exchanges. Its revenue now comes from the bid-offer spread rather than from a rebate.
• Direct Price (€2 per order): you choose the specific venue yourself, from around 30 exchanges including Xetra, Euronext, NYSE and Nasdaq.

For most long-term, buy-and-hold investors the practical impact on execution price is small, but the change does remove the structural conflict of interest that PFOF created, and it means Trade Republic is now the counterparty on default orders rather than an external market maker. If that matters to you, Direct Price lets you trade on a regulated exchange of your choosing.

Are the assets in my name?

Short answer: "No," but you don’t need to worry.

The management of your assets by brokerages, including Trade Republic, is done through so-called "Omnibus accounts." "Omni" comes from "multiple," and "bus" comes from "business."

What Trade Republic does is aggregate all client positions, maintain records of these positions, and the name that appears for each asset in transactions is that of the brokerage, not yours. This is called "Street Name."

However, you are the beneficial owner (the positions are yours). This means that, although they are not directly in your name, you have control over them.

This is a common practice in the brokerage industry because it allows the consolidation of assets from multiple clients, facilitating management and transaction execution.

Additional security tips

In practice, the real risks you face are operational, fraud-related, and, subsequently, the resolution time, which can take months or years.

What is generally recommended is to have accounts with at least two stockbrokers. Not because we think you could lose all your money (due to all the protection mechanisms mentioned above), but so that your assets are not blocked indefinitely in the event of one broker's bankruptcy.

This diversification should not be done randomly. For example, it wouldn’t make sense to only have accounts with Trading 212 and Interactive Brokers, as Trading 212 uses Interactive Brokers as its custodian. If the latter fails, you would lose access to your investments in both.

Another extra precaution you can take is to export a PDF document of your portfolio every month. It costs nothing and can help regulators locate your assets.

Video: broker bankruptcies and how investors are protected

If you want to explore more about this security issues and hear about real-life examples of bankruptcies, check out this YouTube video. It’s about the safety, of European brokers, but the principles are the same:

Conclusion

In summary, we believe Trade Republic is a safe broker, as it is supervised by highly reputable regulators like BaFin and Bundesbank, and its users are entitled to investment protection and deposit guarantee funds if something goes wrong.

However, Trade Republic is not a publicly listed company, nor does it have a long track record like some of its competitors (it is a relatively new company). These two factors do not benefit the company in terms of transparency in its operations.

In the countries where the company operates, you will benefit from the same protection as a German investor, meaning you are entitled to up to €20,000 in protection for financial assets and up to €100,000 for bank deposits.

The one thing to keep straight is which pot your money is in: cash held as a deposit is the part covered by the €100,000 guarantee, while stocks, ETFs, bonds and money market fund holdings are protected instead by custody and segregation, with the €20,000 compensation scheme only as a backstop for the rare case where segregation fails.

_{Information as of August 2026, based on Trade Republic's published legal documentation, BaFin's public register and the company's support pages. Rates and conditions are variable and may differ by country. This article is for information and educational purposes only and does not constitute financial or tax advice, nor an investment recommendation. Investing involves risk of capital loss. This article may contain affiliate links: if you open an account through them, we may receive a commission, at no additional cost to you.}