Why I am Leaving Trade Republic

Summary

In this video, the creator shares their experience with Trade Republic, a popular broker. Despite enjoying certain features like the fee-free withdrawals and high interest rates, they reveal the frustration of having their account unexpectedly closed without explanation. The creator discusses several drawbacks, including limited currency options, a one EUR commission on stocks, and customer service issues. They also highlight how Trade Republic's geographical restrictions and the inability to buy stocks in other currencies or exchanges make it less appealing for global citizens. Ultimately, the video emphasizes the importance of diversifying brokers to avoid being overly reliant on one.

Takeaways

• 😀 The speaker's Trade Republic account was unexpectedly closed with no explanation or reason provided, which led to frustration and a sense of distrust.
• 😀 Both the speaker and their wife received account closure notices, highlighting a broader issue affecting multiple users.
• 😀 The interest rate on Trade Republic accounts decreased significantly as a result of the European Central Bank's rate cuts, making it less competitive compared to other brokers.
• 😀 Trade Republic charges a €1 commission on stocks and ETFs, which can significantly impact small investments, especially for those investing in smaller amounts.
• 😀 Geographically, Trade Republic mainly operates in Europe and uses the Hamburg Stock Exchange, which can limit flexibility for users who want to transfer their portfolio globally.
• 😀 The speaker emphasizes the importance of having a broker that allows global investment options and flexibility in buying stocks in different currencies (USD, GBP).
• 😀 Customer service at Trade Republic is difficult to access, with long response times, which is a common complaint from users.
• 😀 Some users report long delays in receiving dividends, which could be a dealbreaker for dividend-focused investors.
• 😀 Despite the issues, the speaker acknowledges that Trade Republic is a licensed German bank, offering a high level of security and protection for funds.
• 😀 The speaker recommends diversifying across multiple brokers, especially in light of unexpected events like account closures, to reduce risk and ensure portfolio flexibility.
• 😀 Overall, while Trade Republic has its benefits, such as free withdrawals and a good interest rate (when rates are higher), its limitations make it less ideal for global investors or those seeking more flexibility.

Q & A

Why did the YouTuber decide to close their Trade Republic account?

The YouTuber was informed that their account would be closed by Trade Republic, and despite attempts to get an explanation, they never received a clear reason for the closure. They also mentioned declining interest rates and geographical restrictions as factors influencing their decision.

What was the main frustration regarding the account closure?

The main frustration was the lack of communication from Trade Republic. The YouTuber did not receive any explanation or reason for the account closure, despite reaching out multiple times for clarification.

How did the account closure affect the YouTuber’s wife?

The YouTuber's wife also received the same account closure notice, which was particularly upsetting because she had significant holdings with Trade Republic. She now needs to sell her shares and transfer them to another broker, which is inconvenient and costly.

What were some of the benefits of using Trade Republic mentioned by the YouTuber?

The YouTuber liked the fee-free withdrawals with the Trade Republic card (for transactions over €100 worldwide) and the high interest rates they offered when the European Central Bank’s rates were higher. They also appreciated the protection for cash balances up to €100,000.

Why did the YouTuber stop investing in Trade Republic?

The YouTuber stopped investing in Trade Republic primarily because of the declining interest rates and the fact that they could not buy stocks in currencies like dollars or pounds. Additionally, they were not fond of the one EUR commission on stocks and ETFs, which could eat into profits for smaller investments.

What are the main disadvantages of using Trade Republic, according to the YouTuber?

The YouTuber points out several disadvantages, including limited currency options (only euros), geographical restrictions (focused mainly on Europe), the one EUR commission on stocks and ETFs, poor customer service, and delays in dividend payments.

How does Trade Republic’s stock exchange options impact investors?

Trade Republic lists stocks primarily on the Hamburg Stock Exchange, which is not commonly supported by other brokers. This could create problems when transferring stocks to another broker, especially if you plan to move or if the broker does not support the Hamburg exchange.

What are some of the alternatives to Trade Republic mentioned by the YouTuber?

The YouTuber mentions several alternatives, including Trading 212, Lightyear, and eToro, all of which offer better features such as no fees for stocks and ETFs, better interest rates, and more flexibility in terms of currency and stock exchange options.

What advice does the YouTuber give regarding choosing a broker?

The YouTuber advises diversifying investments across multiple brokers to avoid relying on just one platform. This strategy ensures that you are not at risk in case one broker encounters issues, like unexpected account closures, and allows for more flexibility in terms of investment options.

How does the YouTuber feel about the customer service at Trade Republic?

The YouTuber expresses dissatisfaction with Trade Republic’s customer service, noting that it is difficult to reach them, and they have not received a response after multiple attempts to contact them about their account closure. They compare this with the superior customer service they’ve experienced with other brokers like eToro and Trading 212.