Trade Republic launches fractional bonds

German online broker Trade Republic is adding a new product today: fractional bonds. From now on, customers can invest in 500 liquid government and corporate bonds. This should provide investors with higher long-term interest rates.

Trade Republic is an online broker where clients can invest in savings plans, ETFs, derivatives and crypto or fractional stocks. It was founded in 2015 in Berlin and now operates in 17 countries.

For many investors, investing in bonds is not as accessible as other forms of investing. The minimum investment amount is often 1,000 euros. In addition, many bonds are illiquid, which makes it less accessible to retail investors.

First European broker with fractional bonds

As the first European broker, the platform now offers fractional bonds. This allows users to choose from 500 liquid government and corporate bonds. Investments can be made from as little as 1 euro. Per transaction, clients pay a settlement fee of 1 euro. In addition to this new investment product, the platform is implementing another change. From October 1, existing and new customers will receive an interest rate of 4 percent per year on non-invested money.

Accessible to private investors

“We are the first broker in Europe to open up this asset class to retail investors in this way. Especially in the current investment climate, bonds are an important asset class to benefit from high long-term interest rates”, said Christian Hecker, co-founder of Trade Republic.

‘With this offering, we are taking a step toward making the capital market accessible to more people.’

“Until now, investors were dependent on expensive banks or advisors to access the bond market. With this new offering, we are taking another step in making the capital market accessible to more people.”