Is my money safe with DEGIRO?

Your money will be received at DEGIRO by a separate foundation. If you do not 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.

Note: During 2020, a new solution for holding uninvested money will be offered to our clients, please click here for more information.

Money Market Funds

DEGIRO believes that it is important that clients understand how the structure of these Money Market Funds works. DEGIRO is not a bank but an investment firm. In the Netherlands, investment firms are not allowed to hold the money of clients. Therefore, when you become a client of DEGIRO, you give a standing order to invest money into a Money Market Fund. As such, at DEGIRO you do not hold money. For every currency available in the trading platform, a separate Money Market Fund is also available. The objective of a Money Market Fund 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 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 is currently being held in Money Market Funds in Europe (Source).

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

Fund provider

FundShare Fund Management

The FundShare Cash Funds are managed by FundShare Fund Management. FundShare Fund Management manages Qualified Money Market Funds in EUR, USD, GBP, CHF, SEK, NOK, and DKK. All these funds are Qualified Money Market Funds, which means that the funds have to comply with strict requirements.

Risk

The main objective of a Money Market Fund is to minimise risk. With the strict investment policy, this risk is very low. According to the Key Investor Information Document (KIID) of the funds, the risk level is a 1 on a scale from 1 to 7.

For more information on the risks and the risk indicator as determined by the fund manager, we refer you to the prospectus, position reports and Key Investor Information Document (KIID) prepared by the fund manager on the website of FundShare Fund Management. The KIIDs can also be found in our document centre.

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 future performance.

Money Market Funds

A short duration

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

Costs, return and compensation of the Money Market Funds

Investing in a Money Market Fund is low risk but has a downside, namely in the form of a low return. For a few currencies, this return is currently negative, due to the negative market interest rates for short-term EUR bonds. Among others, the CHF Money Market Fund currently has a negative return.

While any positive return on your investment into a Money Market Funds is yours, a negative return as a result of the current interest rates and fund costs is partially compensated by DEGIRO on a non-committal basis. Money Market Funds have no entry and exit costs.

Compensation Policy Money Market Funds

DEGIRO compensates the negative return of the MMFs of your base currency (EUR), furthermore:

  • Compensation will only be given for the first CHF 3'000 in MMF holdings and only for the FundShare CHF Money Market Fund.

  • If you have paid €350 or more in transaction fees during a 60-day period, a limit of CHF 110'000 will apply to you. This will be reviewed on a monthly basis.

When you become a client you give the standing order to invest your cash balance into the FundShare CHF Money Market Fund.

Below you can find an overview (as of the end of June 2020) of the fund returns, the KIID and the prospectus For the most accurate returns of the funds, please see the website of the fund manager.

Return per June 2021KIID
FundShare Money Market Funds
EUR -0,73% KIID
USD -0,38% KIID
GBP -0,68% KIID
CHF -1,02% KIID
SEK -0,54% KIID
NOK -0,57% KIID
DKK -0,99% KIID

Results achieved in the past do not guarantee future performance. For the most recent returns please see the website of the fund manager.

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 at 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. The loss suffered from an investment made by the fund will not be compensated by DEGIRO. This risk is low.

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 in Cash Fund participations are then valued €95. 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 Money Market Funds?' question.

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

It is possible that the value of a Money Market Fund 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 ahead of time in the case of such changes.

DEGIRO only partly compensates for the FundShare CHF Money Market Fund. For more information about the compensation policy, please click here.

Note: Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products which match your knowledge and experience.

Note:
Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products which match your knowledge and experience.