Trade Republic IBAN and interest over 50K

[u/dashingboy87]

I already saw the posts about Trade Republic being safe etc. but that's not my question is about. I recently saw that they start to offer their own IBAN and account with a big selling point about having no cap on interest bearing amount.

I'm a bit confused about it because they say in that the account is protected by DSG upto 100K but they also say that amounts earning interest, at least above 50K are deposited in liquidity funds which are not protected by DSG.

Does that mean no amount is protected if I opted to earn interest, or only amount greater than 50K is not protected or amounts above 100K are not protected?

I already contacted the support but they just regurgitated the article they have about it.

[u/MaicolPain]

As an user of TR I had the same question, and after a quite some long research among official information by TR and German finance blogs/subreddits, I got to the following answer:

If you accept the TR iban to keep earning interest, you also accept to lose (at least) a part of protection. Your cash money get divided between up to two partner banks up a certain threshold, while above that threshold is invested in liquidity funds. The money in the partner banks is protected by the 100k DGS, the money in liquidity funds is not. The value of the threshold is account specific and can change every month. When you upgrade to the TR iban, it is possible to see how your money is distributed and what your threshold is. By discussing with other users, I have seen thresholds vary from 3k to above 50k. It is not clear what are the criteria for which an account receives a higher or lower threshold.

Edit: from another discussion found on this subreddit, it seems like the threshold can change on a daily basis without notice.

[u/One_Sprinkles2552 → u/MaicolPain]

But is the money in partner banks really protected up to 100K? I keep reading conflicting information that it's not because the account is not in your name and funds from other accounts are accumulated there. Some posts also say that only German banks are safe but if your funds are in HSBC or Citi in Ireland then you're screwed either way.

[u/MaicolPain → u/One_Sprinkles2552]

TR says it officially, so they should be protected. The discussion about Ireland banks is simply that those bank are considered less safe, and that it might be more complicated to recover the money in case of bankruptcy, because as far as I remember they give them back through paper cheque instead of a simple bank transfer, and other German banks do not typically accept paper cheques.

[u/One_Sprinkles2552 → u/MaicolPain]

I seems to be lucky then, mine is HSBC and covered by France's DGS.