My test of Freedom24 broker’s savings plan: up to 6,4% interest with an option of daily interest accrual – is it true or not

I have tried the savings plans from the broker Freedom24, which promise up to 6.4% interest, with a daily interest payment option. Is that how they tell it? Is Freedom24 safe? Here, in this review I tell you:

What is Freedom24?

Freedom24 is a European online broker that offers access to millions of securities in international financial markets. In addition to being a stock market investment platform , it also offers a range of savings products with different conditions and levels of profitability.

Freedom24 is not just a broker, but a complete platform that allows:

• Invest in stocks, ETFs, bonds and more:  with access to more than a million financial instruments on 15 stock exchanges.
• Save with flexible investment plans:  you can choose between different options, such as Account D with daily interest or fixed-term plans with higher profitability.
• Learn about finances:  with a complete library of articles, videos and free courses, with recommendations to create our investment portfolio.

Register HERE at Freedom24 to get up to 8.7% returns on your money

Is Freedom24 legit?

Freedom24 is the trademark of the company Freedom Finance Europe, which is part of Freedom Holding Corp.

These are some data that indicate that we are talking about a large, serious international company.

• NASDAQ-Listed Holding:  Freedom Holding Corp. is listed on the NASDAQ stock exchange and is regulated by the U.S. Securities and Exchange Commission (SEC).
• Regulated by the competent authorities: Freedom Finance Europe is regulated by the Cyprus Securities and Exchange Commission (CySEC) and registered with the National Securities Market Commission (CNMV) in Spain under number 4547 .
• More than 400,000 clients:  Freedom24 has more than 400,000 clients worldwide.
• Offices in 10 European countries:  In addition to its headquarters in Cyprus, Freedom24 has representative offices in 10 EU countries, including Spain. Its Madrid office opened in 2022 to focus on providing dedicated support to Spanish clients.

In this other article we talk about what Freedom24 offers us as a stock investment broker, but here we are going to focus on the savings plans.

They offer us two different types:

• Account D with up to 5.3% annual interest and daily interest accrual
• Fixed-term savings plans with up to 8.7% interest and payment upon expiration of the term.

Please note: here, and everywhere in the article, I use interest rates as of the article’s publication date, 02/21/2024.

What is Account D?

Account D is a multi-currency savings account that allows you to deposit funds in US dollars (USD) and euros (EUR) . The account is opened automatically when you open a trading account at Freedom24, without the need for additional procedures.

How does Account D work?

It is very simple. Once we have the funds in Account D (at least €150), they will begin to generate interest daily . The interest rate is calculated based on the account balance and the currency type. You can check the current interest rate on the Freedom24 website . As of the date of creation of this article, it is 5.31% per year in dollars and 3.88% per year in euros.

The interest rate is dynamic and is linked to the weekly EURIBOR rate for the EUR balance and the daily SOFR for the USD balance.

Where does the profitability that Account D offers us really come from?

Each business day the funds in account D are invested in swap operations.

Swap is a pair of conversion transactions. One with the calculation date on the day the exchange is opened (swap), the second, with the calculation date T+1. The profits from the second transaction are the profits paid into the D-account.

This is reflected in account D in the transactions that we can see daily. Interest is also generated on weekends but this will be reflected on Monday.

The risk indicator for account D is 1 out of 7. Where 1 is the lowest risk.

I try account D

To test Account D it is necessary to deposit at least €150.

I currently have 619 dollars and 200 euros that grow every day. Here you can see the daily interest accrual transactions on my D account.

I have a greater dollar amount because the return obtained is greater.

Furthermore, this is money that I have in reserve waiting to be invested in some good opportunity in stocks or ETFs in USD. By having it already changed, I have benefited from making the currency change when it was most favorable for me and I am benefiting from the higher performance of the dollar account.

In dollars right now I get 5.31% per year and in euros 3.88% per year.

Register HERE at Freedom24 to get up to 8.7% returns on your money

Advantages of Account D

• High yield:  Account D offers an annual interest rate of 3.88% in euros (and higher in dollars), which allows us to obtain a higher return on our savings than with traditional bank savings accounts.
• Daily interest accrual:  Interest accrues daily, which means you start earning money from day one.
• Flexibility:  You can easily transfer funds between your trading account and D account “in a few clicks” without any fees.
• Multi-currency approach: Considering that US securities on Freedom24 are traded in dollars, it might be efficient (among active investments) to hold some cash in dollars to earn a higher interest rate. In addition, Freedom24 allows you to do both: deposit in USD directly and conveniently exchange currencies within the platform.
• Security:  Freedom24 is a company regulated by the CySEC and registered with the CNMV, which guarantees the security of your investments. The funds are covered by the investor guarantee fund up to €20,000.

Disadvantages of Account D

• The interest rate is variable, this means that it can change in the future.
• Commission for withdrawing money of 7 euros fixed.

Register HERE at Freedom24 to get up to 8.7% returns on your money

I try long-term savings plans

In addition to the D account, which has the advantage that it generates daily interest and we can withdraw the money whenever we want, Freedom24 also offers long-term options with higher interest. What I like is that you can choose between 3, 6 or 12 months, depending on our needs.

The minimum investment limit is 1,000 euros and there is no maximum limit. In fact, you invest more than 100,000 euros, the return will be even higher, between 0.4 and 0.7% extra.

The interest rate here is also based on the weekly EURIBOR and daily SOFR rates, but with multipliers that increase depending on the duration of the savings plan.

The profitability is variable, however, the interest rate will be maintained during the term for which you have contracted the deposit. This means that, if you take out a 6-month deposit in euros today, which offers a return of 4.855% per year, this return will be maintained for the 6 months, even if interest rates drop.

This may be an attractive opportunity to “fix” the interest rate for the entire year, given the expectations that the European Central Bank will reduce rates this year and the other banks will reflect this in their deposit policy.

I currently have long-term deposits in euros and dollars. Since I know that it is money that I will not need, I have put it over 12 months in order to obtain a higher return and also guarantee the good interest rate that they offer today and that may not be better in the future.

Unlike account D, here the interest is paid at the end of the term, if it were a 3-month deposit at 3 months…

If you need the money before the term expires, it can be withdrawn without penalties on the initial deposit, this means that we can withdraw the total amount that we have put into the term, however, we will not receive any interest if we do not keep it until completion.

How to open a free account in 10 minutes

Opening an account at Freedom24 is a simple process that can be completed in about 10 minutes:

1. Register  on the Freedom24 website.

2. Enter your phone number and follow the instructions to download the Freedom24 mobile app.

3. Verify your identity with photographs of the 2 documents: a valid identification document and proof of address, such as your electricity bill or a bank statement.

4. Finish your account verification with a selfie.

Automatically, upon registration, the trading account and a D account will be opened.

After receiving a message that your account has been successfully opened, you will be able to fund your account.

You can deposit money directly into the D account or transfer it between accounts, between the trading account and the D account.

Register HERE at Freedom24 to get up to 8.7% returns on your money

How to deposit money and commissions

Freedom24 offers different methods to deposit money into your account:

• Bank transfer:  No fees, takes 1-2 business days.
• Bank card:  2% commission, top-up is processed immediately.

Account maintenance is free.

The fee for withdrawing money is a fixed €7 (regardless of the amount withdrawn)

Account D, like the trading account, has 3 currencies and 3 separate balances: EUR, USD and GBP. You can exchange currency within the platform or deposit money directly in the corresponding currency.

To transfer money to account D from your business account:

1. Click on Menu – Non-trade orders – Transfer between accounts
2. Choose Transfer Type: “Between your business accounts”, specify the amount and currency and choose your D account in the “Beneficiary” field.
3. Click on the “Confirm” button.

To deposit money into the long-term savings plan from your business account:

1. Click Menu – Non-trade orders – Long-term money placement
2. Choose the term you want and the currency and specify the amount.
3. Press the “Confirm” button.

Is Freedom24 safe? – Investor Guarantee Fund

Freedom24 complies with European regulations, which require all brokers based in the EU to be members of the Investor Compensation Fund. This means that, in the event of bankruptcy or liquidation, the fund covers compensation of up to €20,000 per person.

Advantages of Freedom24 savings plans

• Good profitability
• You can withdraw money at any time
• Flexibility to choose between different terms and returns
• Up to €20,000 covered by the Investor Compensation Fund
• Excellent customer service: fast, efficient and in Spanish

Disadvantages

• Withdrawal fee of 7 euros
• Unattractive interface
• The Spanish translation has some flaws

In this other article , I analyze in detail the functions that Freedom24 offers as a broker , such as buying and selling stocks, ETFs, bonds and other financial instruments.

Ten en cuenta que inversiones en valores y otros instrumentos financieros conllevan el riesgo de pérdida de capital. Previsiones y rendimiento pasado no son indicadores fiables del rendimiento futuro. Haz tu propio análisis antes de realizar cualquier inversión. Si es necesario, busca asesoramiento de inversión independiente de un profesional certificado.

Register HERE at Freedom24 to get up to 8.7% returns on your money

Opinions about Freedom24

In Trustpilot and other places such as Forocoches or Rankia, you can find opinions from other users about this international broker and its savings plans.

Here I tell you my opinion.

My opinion about Freedom24

After trying Freedom24, I like the different possibilities they offer to obtain performance for our money at different terms.

Today there are many options in the market for paid accounts, deposits, funds and savings plans, but few entities or platforms offer us so many savings options in the same place, at different terms. I find it very attractive because I can choose according to my needs and even divide my money into different terms (and currencies), depending on whether I think I may need it.

And if we don’t know when we are going to need it, account D, from which I can withdraw the money at any time, is ideal. Above all to save capital reserves waiting to be invested in the stock market or ETFs within the same platform.

Something that we must take into account is the withdrawal commission and do our calculations to assess if it compensates us. For example, when withdrawing 1,000 euros, we will be losing 0.7% (7 euros) for the withdrawal, the greater the amount to be withdrawn at once, the more it will cost us. However, considering that Freedom24 is positioning itself as a platform for long-term investments, such a withdrawal fee is explainable and acceptable.

The platform is not very intuitive at first glance, but after using it several times and becoming familiar with it, its use is simple. The mobile app is as functional as the desktop version. I like that it is possible to manage everything directly from the mobile device.

Today, for me, Freedom24 is the best option to have my money generating interest, due to its high profitability with low risk.

And you, are you going to use Freedom24 to grow your money daily? Open your account here and start earning money for your money every day.