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Negative interest rates and compensation for Cash Account

Using a Cash Account is a safe and effective way to hold your cash that is available for you to invest with. All the money held in your Cash Account can be used directly for trading on your investment account.

Unfortunately, the Cash Accounts – like all other bank accounts that depend on the interest rates set by the European Central Bank – do have a downside. Namely, the possibility of a negative interest rate. 

However, starting August 1st, 2022, there is no negative interest rate on Cash Accounts denominated in Euro.

Should the interest rate decrease again in the future, we will partially compensate these interest costs to limit the costs of investing with us. This is done on a non-committal basis in the following manner:

  • Compensation will only be given for the first €2.500 in cash holdings for the Cash Account in your base currency (the Euro, for Czech clients). Negative interest on amounts higher than this will not be compensated.
  • If you have paid €350 or more in transaction fees during a 60-day period, compensation will be given for the first €100,000 in cash holdings for the Cash Account in your base currency. This will be reviewed at the beginning of every month.

 

Accordion

Every day at 14:00 CET, we will send a file to flatexDEGIRO Bank with the cash balance from the previous day at market close (22:00 PM CET) for the calculation of the interest rate. The interest charges will be calculated by multiplying that balance by the negative interest rate and the number of days that the balance on the cash account was unchanged. These calculations are visible via the ‘General account information’ reports under ‘Activity’ ⇒ ‘Reports’.

For example, let’s say you hold €3.000 in your Cash Account, with an interest rate of -0.50% per year for the full year. The total interest charges will be €15. Because we will compensate the charges that were caused by the first €2.500, the total cost to you will be €2,50.

Note that the limit for compensation will increase when you have paid over €350 in transaction fees during a 60-day period. In such a scenario, all interest costs caused by the first €100.000 will be compensated.

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