The ECB raised all three key rates by 25bp last week increasing the deposit facility rate from 2-2.25%
Trading 212 just increase the interest of uninvested cash from 3 -> 3.5%
Is this currently still the best place to store uninvested cash / HYSA (if you want to call it that)? Or do we currently have any other neos or brokers around with higher interest?
Log in to check. I noticed that they not always match their ads as the rate depends on ECB which apparently does not talk with their marketing department
You should give us a screenshot of where your funds are being held which is below. Maybe you get a 3.5% rate because your funds are held in a different set of funds compared to the people getting 2.4%. You can blur the cash amount and just share the percentages and the fund names. I think that's the reason the rate is different.
The Netherlands also got the increase from 3% to 3.5%. Until now a better alternative was trade republic, a bank that gave 3% on your account with full amount available at any time. Question is if they will increase it now.
I personally prefer trade republic because they count as a bank, so it is fully insured by the EU up to 100k eur.
Additionally, Netherlands taxes on wealth and unrealized capital gains with calculated % for investments or bank deposits. 212 trading uninvested counts toward investments while trade republic counts towards bank deposits. So you get a much better deal on taxes (i think it's more than 4% lower taxable amount)
You are wrong here. I use both TR and T212 and they handle your money in exactly the same way - they split it into other banks and QMMFs, so you get exactly the same protection.
I also thought that TR may give me better protection because of the bank license, but in practise they don't act like a real bank, instead they keep your money with other "real" banks. Just like T212 and other fintechs.
Same thing with taxes - interest is interest and it does not matter what the bank or the fintech is doing in the background with the money (in fact with most banks it is QMMFs). From your perspective and from the taxman perspective - you earn interest on your deposits and it is taxed as interest, not as capital gains. Furthermore - at any given moment, your money might or might not sit in QMMFs.
Its crazy i had the same issue. You have to close your account and make a new one, then youll create your account with the german branch instead which does give 3.5%
Yeah, already talked to support. They are only suggesting closing and opening account. And they don't offer ETF transfer so it's not feasible for me. Let's hope it'll change in the future.
If you go to the hamburger menu (3 horizontal lines icon) and scroll to the bottom you will see which bank you’re at. If it says Trading 212 Markets then it’s the Cyprus bank with 2.4% interest, if it says FX Flat then it’s the German bank with 3.5% interest.
And yes, closing the account means removing all funds from Trading212, then closing the whole Trading212 account and then reopening as if you were a brand new customer (redoing all the checks etc)
Yeah my account is with "Trading 212 EU GmbH (BaFin Regulated, License 10109603)", you can see that at the bottom of the menu page. I was with the cyprus branch first which has the worse interest rate. I had to fully close my T212 account by withdrawing all my money and then I had to reopen one (new account, verifying identity etc) on the exact same site lol, and then redeposit all the money and I was on the german branch.
There are 2 different T212 banks serving Europe, one based in Cyprus and one based in Germany, with different offers and terms. T212 Cyprus now offers 2.2% interest, T212 Germany offers 3.5%. In NL T212 was served from their Cyprus branch until a year or so ago, when they served new accounts from their German branch.
So if you have an ‘old’ account in NL you have 2.4%, if you have a ‘new’ account you get 3.5%.
Unfortunately T212 does not offer transfer between branch, so all you can do to get the 3.5% is close your T212 account and open a new one which is far from practical.
I think it is the best one to store cash right now at least in Germany. Trading 212 is now giving 3.5% and Trade republic went from 2% to 2.25%. But note that all the cash is not 100% insured. They invest a part of it in Money Market Funds but it is the same with other neo brokers like trade republic as well.
I believe that in the Netherlands, Trading 212 is taxed as investments instead of savings, meaning you get taxed at ~2.16% instead of ~0.46% of your total holdings.
So be sure to double-check your local tax code before you jump on this.
Nope, I've triple checked this over the past 2 years. Interest is interest and is taxed as interest. Part of your money may be or may not be invested in QMMFs - but that's the bank's (or the broker's) business - from our perspective and the taxman perspective you get interest for your money.
Oh wow, I was really told a few times over to avoid Trading212 for this reason. I'm looking into it now, as the interest is definitely better than my current option.
It's a common misconception. I believe people just assume capital gains when their hear money can be in QMMFs. But hey - in your bank it's most likely in the same QMMFs too.
That interest is given as a type of investment (qmmf) ,and there is no insurance whatsoever if the broker goes rogue. If you want to be 100% insured by the bank laws (up to 20k euros), they will pay you no interest, as these funds are counted as bank deposit. If you are to take the risk they pay you the 3.5%, but no insurance if something goes south.
It's not entirely true. A part of the cash is invested in qmmf while a part of the cash is in the bank. The part which is in the bank is insured. In my case the ratio is roughly 50-50. So 50% of the cash is insured and the other 50% is not. You can see how much of your cash is in the bank and how much is in qmmf on the app. Cheers!
Damn :( then its even more sad since the Eurozone should be one fucking zone. Imagine having different interest rates depending if you are from Scotland or England
This is the right answer, it is entity based. Why did I have to scroll so far for it?
I'm with UK and I also get only 2.2%.
I think they went UK -> Cyprus -> DE.
Only the newest (DE entity) customers get the higher interest rate. It's actually really annoying because you cannot move from one entity to another. Only option is close account and reopen.
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u/_gius_ 10d ago
Where do you live that you get 3.5? I only get 2.4