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.

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;
• In January 2026, a Trade Republic subsidiary obtained a BaFin licence to operate a multilateral trading facility (MTF), giving the company more control over execution after the EU's PFOF ban (June 30, 2026);
• 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 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.

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).

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).

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. The European Union has banned PFOF, with Germany's temporary exemption expiring on June 30, 2026.

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), giving the company an option to internalise more of its trading infrastructure. This regulatory shift improves transparency and execution standards for end investors.

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 summary

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.