I have a large part of my cash reserve at Trade Republic, as it offers the ECB key interest rate of 2.75% on "unlimited" amounts of capital.
I am aware that there is statutory deposit protection for cash assets up to €100,000.
But now I've stumbled across the attached article, which explains, among other things, how Trade Republic can pass on the return on the key interest rate:
Part of the cash is invested in a money market fund and is therefore not subject to deposit protection.
In the Traderepublic app, under Cash -> Average Balance -> "How we hold your cash", you can see the distribution between the normal account and the money market fund.
In my case, 95% of my holdings are in the BlackRock ICS Euro Liquidity Fund.
As this is a AAA-rated fund with a size of 91 billion euros, I'm not too worried about the security aspect.
However, most of my money is in the fund, which in itself yields about 1% more than Trade Republic pays.
Everyone has to decide for themselves whether it makes sense to pay this price for maximum flexibility.
However, I was considering investing my cash in a money market fund like the $W0S04F and/or $CSH (+0.01%) and will do so next week.
How do you assess the "risk" or the procedure at Traderepublic and what else do you do with uninvested cash reserves?
