A Complete Comparison Of Scalable Capital Vs Trade Republic To Help You Decide Which broker is the better choice for you in Germany
Investing in Germany is easy in the modern day. In fact, you can start investing on your own with an Online Broker in Germany.
However, there are a lot of factors to consider before deciding which is the better broker for you. But don’t worry, I’ll help you decide!
SCALABLE CAPITAL VS TRADE REPUBLIC – Why only these?
First things first, before we even get into the comparison of the two specific brokers we need to ask the question: “Why only these two brokers?”
And it is a valid question. Afterall, there are many options for an expat in Germany to open their Depot and start investing.
So why should we prefer either Scalable Capital/Trade republic over all the other choices?
1) The benefits of investing with a German broker
Going with a German Broker makes life easier for you. The feature I absolutely love is the automatic tax withholding whenever you sell anything at profits and automatic tax filings. The tax which is withheld is automatically transferred to the Finanzamt and you do absolutely nothing! You sitting down at the the end of the year, to calculate all your trades, finalising the taxes and filling out forms.
By choosing a German broker like Scalable Capital or Trade Republic, you actually make your life so much simpler!
2) What if you choose a Non-German broker?
The feature I have discussed above is not available with Non-German brokers. So if you go with eToro, Degiro, Trade 212 you need to file taxes by yourselves.
Yes, some of these brokers would provide you with a detailed report of the taxes made and the final profit and gains, but you still have to file a separate tax form which is called the Anlage KAP, and you can read more about on the here.
As both Scalable Capital and Trade Republic are German Brokers, you are good to go with either of them. But don’t worry, before we end the article, you’ll know for sure which one of these brokers is a better fit for you!
3) Cost
Now if you have decided to start investing, what is the point of choosing a broker which puts its hands in your pockets and takes a big chunk of money out every single time you make a trade?
Most brokers in Germany charge a transaction fee per trade, so it makes sense to see which ones offer the lowest. In the end you still up buying the security that you are interested in from one exchange or the other, brokers rarely make a huge difference there.
Take a look at the table comparing all German brokers and their brokerage costs.
| NAME OF THE BROKER | BROKERAGE COST (€) |
|---|---|
| FLATEX | 5,90 |
| LYNX | 5,80 |
| SMARTBROKER | 4,00 |
| S BROKER | 3,99 |
| CONSORBANK | 3,95 |
| COMDIRECT | 3,90 |
| TRADE REPUBLIC | 1,00 |
| SCALABLE CAPITAL | 0,99 |
SCALABLE CAPITAL
Scalable Capital Online Broker is provided by Scalable Capital GmbH. Founded in 2014, Scalable Capital offers three different plans for their broker service. In addition to that, Scalable Capital offers over 4,000 stocks from the world’s largest and most prominent indices, over 2,000 no-load funds and over 1,300 ETFs eligible for savings plans.
The FREE BROKER comes without a monthly fee. On the other hand the PRIME BROKER and PRIME BROKER FLEX cost 2.99 or 4.99 euros a month. Read more about different broker plans on Scalable Capital here. If you already want to open an account with them and want to read more about the broker on their website, you can do it with the button below (or watch our video on it)
TRADE REPUBLIC
Trade Republic Online Broker is provided by Trade Republic GmbH. Founded in 2015, It is the first company to launch a mobile-only trading app. The company believes everybody should have easy, fast and FREE access to Capital Markets.
Trade Republic claims to be a bank built from scratch since 2015. It is a platform where you can save money and build your wealth with personal savings plans on ETFs and stocks. Trade Republic offers commission free trading for its customers.
Personally I have invested over 100,000 Euros through both these brokers. First I was investing in Trade republic, and then I transferred my portfolio to Scalable Capital. Although I changed my depot to Scalable Capital recently, I have experienced both the services for a considerable amount of time.
Therefore, I can help you to choose between the two! In this article, you will find detailed comparison of both the brokers.
Scalable Capital vs Trade Republic – Which one is the right broker for you?
I have used several parameters for comparison. Of course all of these are based on my experience. Therefore, it is advisable that you make a decision based on your interest. Below are the main parameters I have used to compare the two:
1. Acceptance Policy
First parameter to consider is the Acceptance policy of both the brokers. Because if a broker is not accepting you as a user, things become complicated. This is mostly decided by the type of passport or tax liabilities you might have in different countries.
- This is one of the main drawbacks of Trade Republic.
- Only a few nationalities are supported.
- Trade Republic is still focused on individuals with their personal tax liability in Germany.
- As soon as you move out of Germany, you can no longer have your depot with Trade Republic, which was one massive drawback for me!
- For Non-EU citizens, it is a little tricky to open your depot with Trade Republic. In fact, I was not able to open my depot with Trade Republic with my Indian Passport.
- On the other hand, Scalable Capital is supports more nationalities.
- Identity verification is done through Postident, and Postident covers almost all major countries in the world.
- Scalable Capital supports vast majority of passports from non-EU countries. Expats from India, Bangladesh, Pakistan, Sri Lanka, UAE and many other popular non-EU countries can very easily open up an account with Scalable Capital
This is why I would recommend expats in Germany to open your depot with Scalable Capital. You can read our Step by Step Guide for Opening a Depot with Scalable Capital here. You can also support our work by using the link below to open your free depot with Scalable Capital, once you are done reading this comparison of Scalable Capital vs Trade Republic:
2. Fee Involved
Secondly we take a look at the fee charged by both the brokers:
- First, the main fee involved is the transaction cost of 1 Euro per trade.
- Trade Republic enables you to open unlimited free savings plans and invest in stocks & ETFs without brokerage cost or subscription fees.
- The transaction cost of 1 Euro is for external settlement.
- Likewise, Scalable Capital has a transaction cost of 0.99 Euro per trade. However there is a lot of flexibility.
- Also you have the option of choosing a FREE BROKER, PRIME BROKER Plan and PRIME BROKER Flex Plan. These plans have respective subscription charges.
- In addition to that, there are also Prime Partner ETFs where you can invest without any in all 3 plans.
- Scalable Capital also offers 1 free savings plan with its FREE BROKER – Find out how to set up your Savings Plan here.
3. User Interface
This may not be an important feature for all. But I personally like a simple and informative interface. You can compare the brokers based on your preference.
- I find Trade Republic’s user interface comfortable.
- The app also provides informative updates and news which I think is a cool feature.
- But one problem is that the platform is only available on a Mobile Phone, not a desktop.
- Although there is nothing to complain about the interface of here, I personaly feel a few more options could be added.
- They are getting better and improving as a company, which is of course nice to see.
- One clear advantage is that Scalable Capital is available on both Mobile Phones and desktops.
4. Transfer Time
It is important to compare the time it takes for our transaction to process. Active and regular traders may have different needs compared to passive investors.
- This is another parameter where Trade Republic has an advantage.
- It usually takes a short amount of time for money transfer from or to your Current Account.
- I have been able to transfer money between my Girokonto and Trade Republic Depot within the same day.
- On the other hand, Scalable Capital is slightly lagging behind in this regard.
- It takes upto 2 days for transfer on Scalable capital.
- So if you want to invest money you should plan this well ahead and transfer money to the Scalable Capital depot.
5. Major Features – Scalable Capital vs Trade Republic Savings Plan
Investing in a Savings Plan is a great feature that both these brokers have. Let us look further into the differences between the two:
- You can open unlimited free savings plans with a minimum amount of just 10 euros.
- There is no minimum order volume as such
- You can also change the plan to monthly, twice a month, three months once.
- There is no minimum order volume on Shares and ETFs in Trade Republic.
- However, you need money in your Trade Republic Depot for the savings plan.
- Another disadvantage is the limited choice of stocks and ETFs.
- Choice of Stocks and ETFs are more.
- You get one FREE Savings Plan with the FREE BROKER Plan
- Unlimited with the PRIME BROKER and PRIME BROKER FLEX plans
- You can also invest in Prime Partner ETFs without transaction cost.
- Prime Partner ETFs of Scalable Capital are Invesco, Xtrackers and Ishares.
- The minimum amount required for Savings Plan is 25 Euros
- The minimum order volume is 250 Euros.
- Money for your Savings Plan directly gets debited from your current account (Girokonto) which is great!
6. Expatriation
It is very important to plan with the future in mind. This is why we compare the accesibility of both the brokers incase we decide to move out of Germany. Trust me, I am telling this from my own experience
- The biggest disadvantage of the Trade Republic broker is that you are not able to transfer the depot when you move to another country.
- Even within Europe, you need to close your account in Germany if you plan to move elsewhere. I personally was affected by this when I moved to Romania for my business.
- You can transfer your depot to any country within the coverage of Scalable Capital. This is very convenient.
- However you will lose the special feature of having the taxes done automatically by the broker itself. That is understandable because tax laws may vary depending on the region you move to.
- In fact that is the case with every broker hence it is not really a disadvantage.
7. Customer Support
Now, the most important factor in deciding the broker is perhaps the customer support they offer. Especially if you are an expat who may not have the best German fluency, you are going to need prompt and good customer support.
Trade Republic: Firstly the customer support of Trade Republic is not the best in my opinion. I would describe it as average. Here is why:
- The platform does not have a real-time means of communication
- So users do not receive an immediate response.
- In addition, Trade Republic has a tendency to overload responses at once.
Scalable Capital: On the contrary, I am very satisfied with the customer support of Scalable Capital.
- Efficient and prompt
- Emails, Chat bot, Live text, Call, detailed FAQ
- Would be easier for a beginner or an expat
In Conclusion – Scalable Capital vs Trade Republic
So there we have it. I have compared both Scalable Capital and Trade republic across 7 parameters.
In summary Scalable Capital is the better choice. The company stands out with more than 8,500 trading positions in 90 countries. I made the decision to switch to Scalable Capital because I felt their features suited my needs more. Also it is good to have a second depot, so you can diversify your investments more!
And from my recent experience, you have my thumbs up for choosing Scalable Capital Depot!
Do you also want to watch a video on this comparison? Check out what I posted on my YouTube channel Brandevise
Thanks Bharat for giving a detailed description. Both Brokers seem good. However it would be good for an expat to get Support in english. So scalable Capital seems Like a better choice.
Hey Bharat! I’m an Indian. While I’m living in Germany let’s say that I’ve invested through Scalable Capital. What will be the scenario if I want to move back to India? Will I be able to still continue my Portfolio just by adding funds to the depot by living in India?
Est-il possible pour un citoyen belge francophone demeurant en Belgique d’ouvrir un compte ( ETF, plan d’épargne) auprès de SCALABLE CAPITAL? Merci pour votre réponse.)
Hello and thanks for detailed comparison!
I myself have a Scalable depot. I´ve been very happy so far with it…. Until my employer asked me to disclose my accounts and ask for a “Zweitschriftversand” (Confirmation email of all Orders executed in my Depot) for Compliance reasons (I work for a bank). Here, Scalable has a huge disadvantage: They Charge 5.90 Euros for every order executed that needs to be sent to my employer. I currently have 6 ETF savings Plan. This means I would have to pay Scalable 5.90 x 6 = ca. 36 EUROS per Month for just informing my employer about my transactions…. This is too much, it is a free service on every other depot that I know of, and enough reason for me to switch to Trade-Republic.
I guess I will keep both Depots open to get the best out of each worlds, but to me, this is a full point down for Scalable.
Can a U.S. resident open a Scalable Capital account?
Thanks
Hi Bharat,
Very nice article !
Thanks for consolidating all the info.
I have a question regarding the account handling. I am having an account with Trading212 and investing in index funds. They confirmed that they will not ask me to close the account if I move back to India and will continue to accept my investment. Is it the case also with scalable capital ? Would be great if cover Term life insurance topic in this special case. Would help people like me who are in dilemma to move back to India.
Regards,
Vignesh Rajasekar
Hi Bharat,
Very helpful article indeed. I have 2 questions:
1. You mentioned the following:
The tax which is withheld is automatically transferred to the Finanzamt and you do absolutely nothing! You sitting down at the the end of the year, to calculate all your trades, finalizing the taxes and filling out forms.
Does that mean that you don’t have to file a tax return at all or that you will receive a report similar to Lohnsteuerbescheinigung where you just put the numbers of the appropriate fields and you are done?
2. You mentioned the following:
You can transfer your depot to any country within the coverage of Scalable Capital. This is very convenient.
Does that mean that after leaving Germany and moving to a different EU country, you can continue holding the Scalable Capital account or it has to be one of the other 4 countries(Austria, Italy, Spain, France) where they offer their service?
Thanks in advance.