- Trade Republic has launched a free share savings plan.
- And the new feature could ease its expansion into other European markets and boost revenues.
Around 1,000 individual shares and 300 exchange-traded funds (ETFs) can be saved free of charge for long-term asset accumulation on the digital trading platform, Fintech Futures reports.
Users can start investing in the new plan with as little as €10 ($11.20). As a licensed German bank, deposits on the app are insured by the state up to €100,000 ($112,970). Launched last year, Trade Republic charges users €1 ($1.12) per trade processed and is currently live in Germany and Austria.
Trade Republic has had a successful year and this latest offering could help it differentiate from competitors and launch in more markets.
- It raised one of the largest Q2 2020 funding rounds in Europe following rapid customer acquisition. Trade Republic secured a €62 million ($69.4 million) Series B in April. It has also onboarded over 150,000 users so far, who have traded over €1 billion ($1.09 billion) via the app. For context, in Germany, Dutch commission-free trading app Bux recently reached 100,000 users, while Scalable Capital has around 80,000 customers.
- And the new feature could support its planned European expansion. Entering other markets has proved difficult for trading apps. UK-based Freetrade delayed its expansion into France and Germany due to current economic uncertainty, while US giant Robinhood canceled its UK launch following a string of scandals. However, adding the share savings plan will enhance the app’s value proposition, giving Trade Republic an edge that can make its expected launch in other markets successful. Bux and eToro, for example, both operate in a number of European countries, but have yet to launch a similar product.
The free savings plan should also boost customer acquisition while ensuring steady monetization. Trade Republic stated during its latest raise that it would introduce savings features to open a new growth path.
And while Scalable also offers a free ETF savings plan, users have to invest a minimum of €10,000 ($11,197) to start, making it accessible to fewer investors. By contrast, Trade Republic’s lower minimum investment requirement opens its app to a large customer base, increasing the number of trades processed—which is where it earns revenues.
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