Holding of uninvested money in a Cash Account

During 2020, a new solution for holding money will be offered to our clients by our partner flatex Bank, a Germany based regulated bank. flatex Bank will offer a personal Cash Account with an IBAN for the holding of uninvested money, which will be directly connected to your DEGIRO investment account.

During 2020, a new solution for holding money will be offered to our clients by our partner flatex Bank, a Germany based regulated bank. flatex Bank will offer a personal Cash Account with an IBAN for the holding of uninvested money, which will be directly connected to your DEGIRO investment account.

Safeguarding your uninvested money

DEGIRO is not a bank but an investment firm. In the Netherlands, investment firms are not allowed to hold clients’ money. Therefore, when you become a client of DEGIRO, you give a standing order to invest your un-used money into a Money Market Fund (MMF).

We will gradually replace this setup with a personal Cash Account in your name at a licensed bank. Your money will then be held in a segregated personal bank account with a personal IBAN. This means your money is then also guaranteed up to €100,000 as the relevant German Deposit Guarantee Scheme (Entschädigungseinrichtung deutscher Banken) applies. Your new Cash Account will be directly connected to your existing DEGIRO investment account. It is not possible to use this Cash Account for other banking matters. You can only use it to hold money so that it is readily available for investments on your DEGIRO account.

Change comparison

Previous set up
Uninvested cash held in Morgan Stanley Liquidity Fund or Fundshare Cash Fund
Type Money Market Fund
New set up
Uninvested cash held in Cash Accounts (flatex Bank)
Type Bank account (IBAN)

Gradual roll-out of Cash Account availability

Starting July 2020, the possibility to hold money in a personal Cash Account with flatex Bank will be gradually rolled out to DEGIRO clients. We expect that by the end of 2020 most clients will be able to have a personal Cash Account connected to their DEGIRO investment account. During this transition, it is possible that new clients will first make use of the Money Market Funds solution to hold their unused money and later get access to the personal Cash Account solution.

When your Cash Account is available

As soon as the EUR Cash Account becomes available to you, we will communicate this to you by e-mail. To open your Cash Account, all you need to do is complete the online form that will be made available to you in the trading platform after you log in. It will only take a few minutes of your time to complete.

What happens with the MMF?

With the introduction of the Cash Accounts, we will gradually end the MMF solution for holding uninvested money. This means that in the future, you will no longer be able to automatically hold your money in MMF's via the standing order. We will communicate the exact dates and details by e-mail.

Since we will firstly only offer EUR cash accounts, you will continue making use of the MMF’s for other currencies. We will inform you when Cash Accounts in other currencies are available.

Please note that 45 days after we have given you the possibility to open your Cash Account, we will no longer compensate the negative interest of MMF's in line with the compensation policy of DEGIRO.

Change comparison

Previous set up
Uninvested cash held in Morgan Stanly Liquidity Fund or Fundshare Cash Fund
Type Money Market Fund
New set up
Uninvested cash held in Cash Accounts (flatex Bank)
Type Bank account (IBAN)

"As soon as the Cash Account becomes available to you, we will communicate this to you by e-mail."

Negative interest rates and compensation

Using a Cash Account is a safe and effective banking solution to hold uninvested cash that is linked to your DEGIRO investment account. All of the money held in your Cash Account can be used directly for trading as well as margin on your DEGIRO investment account.

Just as with the current Money Market Funds, the Cash Accounts have a downside, namely the possibility of negative interest. At first we will offer only EUR cash accounts. The interest rate offered by flatex Bank for the EUR Cash Account is currently -0.50% (July 2020).

With respect to the negative interest for the Cash Account, DEGIRO will offer a compensation policy similar to the MMF compensation policy. Negative interest on the Cash Account is partially compensated by DEGIRO 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 (EUR). Negative interest on amounts higher than this will not be compensated.

    Example

    you hold €3,000 in your Cash Account, with an interest rate of -0.50% on a yearly basis. The negative interest of €12.50 paid as a result of the first €2,500 in your account is compensated by DEGIRO. You incur the €2.50 in negative interest on the remaining €500.

  • 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 (EUR). This will be reviewed at the beginning of every month.

    Example

    you hold €50,000 in your Cash Account, with an interest rate of 0.50% on a yearly basis. However, you have paid over €350 in transaction fees during a 60-day period. The €250 incurred as a result of negative interest is then compensated by DEGIRO.

There are no entry-, exit- or other costs associated with the Cash Accounts.

About flatex

Although DEGIRO is not a bank, this does not mean we can’t partner up with one. In flatex Bank, a regulated German bank, we found the perfect partner. flatex Bank has held a banking license since 2005, and has €14 billion in assets under administration (July 2020).

Your assets are insured under the German statutory deposit guarantee scheme. flatex Bank is protected by the compensation scheme for German private banks (Entschädigungseinrichtung deutscher Banken). The deposit guarantee scheme protects up to €100,000 per client. More information about the Compensation Scheme for German Private Banks can be found here.

In December 2019, flatex and DEGIRO announced plans to build the leading online broker in Europe after the acquisition of DEGIRO by flatex. The acquisition of the remaining shares was subject to the approval of the Dutch regulatory authorities. The relevant Declaration of No-objection (DNO) approval application was submitted in February 2020. Both submissions have been approved in July 2020. Both brands will be retained and both platforms will be continued and operated under flatex group.

flatex Bank AG is under the supervision of the German regulator of financial markets, the BaFin (Bundesanstalt für Finanzdienstleistungsaufsicht). Click here for more information about the BaFin.

Frequently asked questions

As soon as you have opened your (flatex) Cash Account with a unique IBAN, you will no longer deposit money to the bank account of Stichting DEGIRO, but instead to your new personal IBAN with flatex Bank. You can find this number and further instructions when you log into the trading platform. If you have accidently made a money transfer to the bank account of Stichting DEGIRO, this will be returned to you.

Since deposits and withdrawals will be made from your Cash Account with flatex Bank, it will no longer be possible to connect a secondary bank account. Therefore, you will only be able to use your current primary bank account for deposits and withdrawals. You can change your primary bank account a maximum of three times per 12 months. Please find further instructions in the trading platform. If you have accidently made a money transfer to the bank account of Stichting DEGIRO, this will be returned to you.

If you want to hold money in a different currency, this is still possible. Since we will only offer EUR Cash Accounts at first, you will continue making use of the MMF’s for other currencies. We will inform you when Cash Accounts in other currencies are available.

No, there are no costs associated with holding the Cash Accounts or depositing/withdrawing money. Please note that the EUR account is subject to a negative interest of -0.50% (July 2020). More information about the compensation for negative interest can be found above on this page under ‘Negative interest rates and compensation’.

No, you can only use it to hold money, so that it is readily available for investments on your DEGIRO account.

No, this will not be possible. With the introduction of the Cash Accounts, we will gradually end the MMF solution for holding uninvested money.

This means that in the future, you will no longer be able to automatically hold your money in MMF(s) via the standing order. We will communicate the exact dates and details by e-mail. If you still wish to hold uninvested money for trading on your DEGIRO account, all you need to do is complete the online form and open your Cash Account.

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  • Incredibly low fees.
  • Comprehensive tools, capabilities, and service.
  • Worldwide. Anytime and anywhere.
  • Secure structure.

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Note: Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products which match your knowledge and experience.

Note:
Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products which match your knowledge and experience.