I’ve opened one of these accounts and thought I’d share my experiences by way of review in case anyone’s thinking of getting one.
There seems to be three entities one in Cyprus one in Bulgaria and the main one in the UK. Also one in Oz. I think all customers going forward signing up in Europe or the UK sign up for the UK company so firstly I will focus on the UK protections.
The Company is regulated by the financial conduct authority and client money is held separately in various banks. Any shares purchased are also held separately by some custody firm. I checked the FCA registration and it seems they are licensed for the deposit taking activities under ‘Rights to or interests in investments (Security)’.
It states on the website that cash deposits qualify for the financial services compensation scheme. They have confirmed to me in messages that is the case. I also called the FSCS and gave them the FCA number and they confirmed deposits should be covered.
Of course, any funds held with these banks separately in other account one may have total will also count towards the 85,000 protection limit. Trading 212 let you know the amounts held in each of the banks.
In fact, the cash on deposit is held by three banks, JP Morgan, Barclays and NatWest and the FSCS protection is with these banks. For depositing euros the bank account is JP Morgan SE in Germany however trading 212 confirmed that all euros are held by the UK banking entities.
Money saving expert is also promoting the 5.2% cash ISA product and stating it is FSCS protected.
I will of course be most interested in the opinion of those forum members more familiar with financial services!
Also of course cash put into the qualifying money market funds are not protected but of course this is where the wise Euro account cash is held. In fact currently my Trading 212 euros are not invested in a QMMF. and are only deposited with the three banks. Some of my sterling funds are invested in a QMMF.
Secondly, the opening process seemed reasonably easy, I used the UK address and cannot recall being asked for photo ID. Also used a link from money saving expert and they give you a free partial share. Mine was for Starbucks with a value of £11.41 that share went up then down and has just jumped 20% to £13.82. What fun! Obviously this is just to get you interested in the share market. When signing up you choose between pound sterling and euro as the primary currency in which the balances are initially presented. Once selected you can’t change. So my Euro amounts are headline displayed as pounds which makes it interesting to see the currency valuation in your home currency move up and down according to the exchange rate. As I was buying euros last month, the pound value of my euros was going down. Then the crash two weeks ago immediately added £10 on the sterling value of my €700 invested at the time.
Now on to operations.
I first started using the account on my laptop and that works fine for me. I’ve since also installed the app on my phone to enable a virtual debit card to take up their offer of 1.5% cashback until the end of October. Nice. The standard cashback rate is 0.5% so less than the one percent offered by Chase so it wasn’t worth me paying the £5 fee for the physical debit card. I don’t have any specific preference between the desktop and the app however if I was exchanging money, I suppose I could have the pound sterling live webpage open with the app in my hand ready to pounce!
Deposits -
Money into the account in Sterling is immediate as I’ve linked my UK sterling bank account through open banking.
The Euro deposits from my Revolut euro account have taken from one to 2 hours to appear in Trading 212 with Revolut seeming to take about 30 to 40 minutes to send the cash to the German IBAN. Trading 212 handily sends me a message to say the money has been received. At some point they required a Rev statement to be uploaded to confirm / verify the account.
Withdrawals -
Trading 212 state withdrawals can take up to 3 business days to arrive. the test withdrawals of one euro and one pound to Revolut and my bank account respectively have taken one business day. the withdrawal of £1 was made on a Friday and it appeared in the bank on Monday.
That little lag has encouraged me to keep some euro’s in wise whose withdrawals to Revolut are pretty instantaneous.
Currency conversion -
Well, it’s 0.15% charge and unlimited amounts so I think one gets maybe 5 - 10 cents more on £100 then Revolut but of course Revolut has a 1K limit per month unless you pony up the monthly fee. So the only rate advantage over Revolut is unlimited amount of exchange.
Though a disadvantage I have found is that unlike Revolut you can’t place limit orders so you really have to keep looking at the rate and time your exchanges to the best of your ability. That of course could take your entire life. So I do prefer setting a limit in Revolut and leaving it in the background for the day. That does have disadvantages of course, for example the day before the onset of the crash I put in a limit order to buy euro at 1.1920 taking a punt on the BOE not cutting. So I didn’t buy much then. But hey, if we could call the top of the market each time, we’d all be millionaires.
I settled on a strategy of making small trades of around £100 each, making seven over the period from May to August. This helped to buy euros with the increasing rates. On the 21st of May I bought 122.74€ for £105. On 13th June €123.12 was costing £103.80.
Interestingly, I have noticed that the 0.15% charge is rounded up or down to the nearest cent. so this does allow some manipulation to shave some pence off each transaction. For example, my last exchange on 12 July was for €123.15 which cost me £103.51. The charge was 18 cents rounded down from a calculated 18.47 cents - giving an exchange rate of 1.1897 on a spot rate of around 1.1916 at the time.
Interest -
The main reason for my interest in this account (sorry for the pun). To recap it’s 5.2% on sterling and 4.2% on euro. 5.1% on dollars if you have any of these. Noticing that wise sneakily reduced their euro rate was what prompted my interest in how much protection one got in trading in 212. With T212, interest is credited and notified each day. This table summarises the three main contenders rates.
|
|
After tax |
| Wise |
3.45 |
2.76 |
| Trading 212 |
4.2 |
3.36 |
| Livret A / blue |
|
3 |
As can be seen trading 212 is about 10% ahead of the France tax-free account. Of course we have to remember that these rates from trading 212 are undoubtedly loss leaders to get everyone on board their platform and so will likely reduce at some point beyond the general rate cutting carnage which is about to ensue.
Given my money looks protected and would suffer a loss of 1 day of interest on withdrawal (up to 3 in the T&C’s) that 10% uplift looks useful. If I keep my euro’s in for a month and T212 reduces the rate to 0% I won’t lose. If you hold 5.2% UK interest accounts though I wouldn’t rush to deposit with T212.
I haven’t used the share / fund trading part of the platform so can’t really comment other than it all looks straightforward - the home screen has a list of shares and their prices and movements and it has a search facility.
Otherwise, hopefully I’ve covered most areas and If you have any queries don’t hesitate to post them!
) really mean to me vs risk? I take all the risk and the tax man takes half the gain.
