Is my money safe with DEGIRO?

Your money will be received at DEGIRO by a separate foundation. If you don’t directly invest this money it will be automatically invested in one of the qualified money market funds of Fundshare Fund Management. This is done via the standing order given by you during the registration process.

Money Market Funds

DEGIRO believes it is important that clients understand how the structure with the money market funds works. DEGIRO is not a bank but an investment firm. In the Netherlands investment firms are not allowed to hold money of clients. Therefore, when you become a client of DEGIRO, you give a standing order to invest money in money market funds (the FundShare Cash Funds). The money market funds DEGIRO has available are all qualified money market funds. For every currency available in the WebTrader, a separate money market fund is also available. The management costs of these funds are included in the fund's return. Due to the current low interest rates of some currencies, the return of the relevant money market fund is negative. A negative return, as a result of the low interest rates and management costs, will be compensated by DEGIRO until further notice.

One of the objectives of qualified money market funds is to realise a return that is equal to the market interest rate with as low risk as possible. An additional advantage to the low risk, is that your qualified money market fund participations, just like your other investments, are kept strictly separate from the assets of DEGIRO.

Money market funds are often used by institutional investors, such as pension funds, to hold large amounts of money in a safe way. Approximately 1 trillion euros are currently being held in money market funds in Europe. (Source)

"The objective of the money market funds is to realise a return that is equal to the market interest rate with as low a risk as possible."

Fund provider

The FundShare Cash Funds are managed by FundShare Fund Management, a sister company of DEGIRO. FundShare manages qualified money market funds in EUR, USD, GBP, CHF, SEK, NOK, HUF, and DKK. All these funds are qualified money market funds, which means that the funds have to comply with strict requirements.

Qualifying money market funds

A short duration

A Qualifying money market fund has a short average duration of 60 days. This means that the bonds in the portfolio are repaid on average within 60 days. This reduces the risk of no repayment.

A liquid portfolio

A qualifying money market fund invests in so-called liquid bonds, which means that they are easily tradable and can therefore be converted quickly into money.

A qualitative portfolio

The creditworthiness of issuers is continuously monitored, which limits the chance of unforeseen arrears. In case the credit ratings deteriorate, the money market fund is no longer allowed to invest in the loan concerned.

Risk

The FundShare money market fund's main objective is to minimize risk. With the strict investment policy, this risk is very low. According to the Key Investor Information Document of the fund, this risk level is a 1 on a scale of 1 to 7.

For more information on the risks and the risk indicator as determined by the manager, we refer you to the information documents prepared by the manager: the prospectus and the Key Investor Information Document (KIID).

Risicometer

Please note: losses caused by these risks will not be compensated by DEGIRO. If you invest, you run a financial risk. The value of your investments may fluctuate. Results achieved in the past do not guarantee the future.

 

Downloads:

Qualifying money market funds Position report KIID Prospectus
EUR UCITS Link Link Link
USD Link Link Link
GBP Link Link Link
CHF Link Link Link
SEK Link Link Link
NOK Link Link Link
HUF Link Link Link
DKK Link Link Link
Risicometer

Please note: losses caused by these risks will not be compensated by DEGIRO. If you invest, you run a financial risk. The value of your investments may fluctuate. Results achieved in the past do not guarantee the future.

Costs and return of the FundShare money market fund

At the moment, the market interest rate for short-term euro bonds with a low risk are negative. As a result, the EUR Cash Fund currently achieves a negative result.

Annually an amount of 0.09% of the fund's assets are charged as management costs for the qualifying money market funds. These costs are included in the fund return.

Although any positive return on your investment is yours, a negative return as a result of the current interest and fund costs is currently compensated by DEGIRO on a non-committal basis. Click for more information. The qualified money market funds available at DEGIRO have no entry and exit costs.

Below is a general overview of the situation per money market fund as of the end of September 2018;

Qualifying Money Market Fund Current Interest Compensation
EUR Negative Yes
USD Positive N/a
GBP Positive N/a
Money Market Fund
CHF Negative Yes
SEK Negative Yes
NOK Positive N/a
HUF Negative Yes
DKK Negative Yes

Please note: the compensation given by DEGIRO is on a non-committal basis. DEGIRO is not obliged to do so and can change or end the compensation on any moment. Of course we will always communicate such changes to you. The compensation only applies to negative returns as a result of negative interest and management costs. Loss suffered on an investment made by the fund will not be compensated by DEGIRO. This risk is low.

Eonia interest rate

cashfund

Eonia interest rate

cashfund

Questions

In principle, if such a credit event takes place on a loan without collateral, the whole amount that has been invested in the issuing institution can be lost. In case the fund assets are exposed for 5% to such a credit event, then the value of the fund can fall with 5%. Every 100 euro in Cash Fund participations are then valued 95 euro. The risk for such a credit event is very low.
No, in the Netherlands investment firms are not allowed to hold money of clients. Therefore, the money market fund structure has been set up.
There are no costs associated to the buying and selling of participations in the money market funds. The management fee for the FundShare qualifying money market funds is 0.09% per year. These costs are included in the fund return. DEGIRO has decided to compensate a negative return as a result of management costs and negative market interest on a non-committal basis. You can read more in the 'How does the negative interest compensation work for the FundShare Money Market Funds?' question.

For many clients the market interest of their local currency will be negative. We want to prevent our clients from being affected by this negative interest. That is why we have decided to compensate on a non-committal basis the negative return in the money market funds as a result of the interest and management costs.

IIt is possible that the value of the money market funds falls as a result of losses suffered on an investment made by the fund. This can occur if, for example, the Dutch or German state can unexpectedly no longer meet its payment obligations. In such a case, DEGIRO will not offer any compensation on the losses incurred. This risk is however very low.

The compensation is entirely non-committal and does not create any rights and does not oblige DEGIRO to follow the same approach in the future. DEGIRO pays this compensation on the basis of commercial considerations. DEGIRO reserves the right to waive this compensation. DEGIRO will inform you thereof in time. The compensation will be paid to you directly once per quarter.