Trade Republic Faces Lawsuit Over Alleged Misleading Interest Rate Advertising

The German consumer protection group claims the neobroker's marketing misrepresents deposit security and interest guarantees.

The Verbraucherzentrale Baden-Württemberg has filed a lawsuit against Trade Republic, alleging misleading advertising regarding high interest rates and deposit security.
The neobroker advertised a 3.0% interest rate on accounts, later reduced to 2.75%, claiming protection under statutory deposit insurance, which has been challenged by the consumer group.
Critics argue that Trade Republic fails to clearly disclose that customer funds are partially invested in money market funds, which are not covered by deposit insurance.
Trade Republic defends its practices, stating that its diversification of customer deposits, including investments in money market funds, has been in place since May 2024 and is transparently disclosed in its app and website.
The lawsuit highlights concerns about consumer awareness of risks, with no court date yet set for the case.