Air Bank is about to launch a new product before the Christmas holidays. It joins other Czech banking companies that offer direct trading in shares. Air Bank is preparing to include shares of 200 of the most famous American companies in its offer, such as Alphabet, Amazon, Microsoft, Meta, McDonald’s and Tesla.
In addition to shares, you will be able to invest in 20 exchange-traded ETFs (Exchange Traded Funds), the composition of which will copy the popular stock indices S&P 500 and Nasdaq 100. In the future, the bank is also planning to add shares traded on the Prague Stock Exchange.
Air Bank is going to target its investment innovation especially at that part of the Czech population that has no experience with investments, or only invests in mutual funds. According to the bank’s experience, this affects approximately 2.5-3 million people. For the bank, they are potential clients who would like to value their money in some way, but are afraid to invest independently or have no idea how to start trading shares.
However, precisely this part of the population has a problem with investing. According to a survey by the Association for the Capital Market of the Czech Republic, the biggest obstacle that discourages them from investing is the fear of losing money. Either the investment fails or it turns out to be a scam.
Then this group of people also does not trust investment intermediaries, companies and banks. Another common reason is that they don’t have enough money left to invest. In short, a large number of people stick to certainties – low appreciation in savings products, while riskier investing is stressful and uncertain for them, which may not turn out well.
Barriers that prevent people from investing
Author: Association for the Capital Market of the Czech Republic, Air Bank as,
Simple, cheap and at your own risk
The trading itself will then take place via the Interactive Brokers brokerage platform, and the bank wants to make trading as easy as possible even for complete beginners. These will be the basic conditions:
You must be at least 18 years old, you must not be in bankruptcy, the lowest amount for trading will be 1000 CZK, the single fee will be 0.2% of the trade volume, at least 2 USD or 5 EUR (ie 45 or 120 CZK). Keeping an investment account will be free of charge and the service will be completely in Czech.
You will be able to buy shares from your current or savings account. You do not deal with the payment of dividends, the bank credits them to your current account.
Share prices of well-known companies tend to be very expensive, one share can cost thousands of dollars. In order for even small investors to be able to afford the purchase of these shares, there is an option to buy only an affordable part of the share, i.e. its fraction. This fractional investment will allow Air Bank in its offer.
What are fractional shares?
The possibility of fractional investing will be especially appreciated by people who are just starting out with investing and do not want or cannot invest large sums. The price of a single share can be very high and unaffordable for a newbie. Therefore, instead of buying one whole share, they buy only a part of the share, i.e. its fraction, thereby becoming the holder of a share in the chosen company and can benefit from dividend income. At the same time, only a small part of the capital is enough for them. If you buy a fraction, you do not choose the number of shares when buying, but you enter the volume for which you want to buy.
We are seeing a growing demand for investment options from our clients, which is why we are introducing a new service that simplifies the world of stock investing. Clients can clearly see the development of the investment in the My Air application together with other banking services, says Petr Žabža, head of the investment department of Air Bank. We strive to make investing in stocks accessible, and that’s why we’ve made the whole process as simple as possible. The service will be accessible to the general public and clients will be able to easily manage their portfolio. The minimum investment amount is set at 1,000 crowns, and investors can also buy fractions of shares.
The bank promises that setting up an investment account will not take more than 90 seconds, also thanks to the fact that it does not require you to fill in an investment questionnaire during trading, which evaluates your investment experience and determines whether the investment you intend is appropriate for you. You filled it in every time you arranged, for example, supplementary pension savings (DPS), investing in mutual funds and the like. This is where Air Bank will differ from other domestic banks, through which you can also trade with shares.
Instead of an investment questionnaire, an answer to the questions whether you are aware of the risk of trading in shares will be enough at Air Bank, and that’s it. This is an “Execution only” mode, i.e. a service provided by the bank solely at the customer’s initiative, while not providing investment advice. In such a case, according to the rules of the Act on Business on the Capital Market (and also according to opinions of the Czech National Bank) is sufficient if the bank warns the customer about the risks of investing with sufficient time in advance, and is not obliged to care whether you know anything about the shares or not.
When setting up an investment account, you agree that you are investing for yourself and that you are aware of the investment risk and possible high volatility (price fluctuations). Finally, you will confirm that in the event that you lose the invested money after all, it will not cause you a serious problem.
In the picture, you can see how the overview will look after opening the My Air application and the current value of the investments when you click on the Share Investments section.
Buying Shares Through Air Bank – Shares and ETFs
Autor: Air Bank a.s.,
Currently, Air Bank offers the possibility of investing through the Portu platform belonging to WOOD & Company, as well as Zonky, a service connecting people who are looking for the best loan on the market with those who will offer them money through Zonky. However, according to Petr Žabža, these investment services should not compete with each other.
People see Porta as a manager for long-term investments and building financial assets, while buying the shares themselves is meant to help people get a feel for the world of investing, so to speak, and stop being afraid of it. Zonky, on the other hand, is supposed to be used for the appreciation of money, where the future yield can be well estimated.
Where else can you buy shares?
Currently, you can trade shares with four domestic banks, namely Fio banka, ČSOB, Česká spořitelna and Raiffeisenbank.
Ve Bance wire you can trade not only via the Smartbroker mobile application, but also on a computer via the e-Broker application. You have a choice of Czech, American and German shares.
Fees
Stock exchange: 0.35%, min. 40 CZK and max. 1190 CZK RM-System, EasyClick mode: 0.29%, max. 1190 CZK. US Stock Markets: Trade up to 100 USD 7.95, over 100 USD 9.95 Deusche Börse AG – XETRA (XETR) and Frankfurt (XFRA): 0.15% of volume, min. €9.95
Czech Savings Bank came up with the offer of direct investment in shares, certificates and ETFs through the George app in January this year. You can trade on all major world stock exchanges in Great Britain, USA, Japan, France, Germany, Austria, Poland and the Czech Republic. There are now approximately 3,000 global equity titles to choose from.
Fees
In the Czech market, fees for transactions up to 500,000 CZK amount to 0.36% (min. 90 CZK), from January 26, 2024, they will be reduced to 0.35%, min. 90 CZK (detailed price list).
When trading on European markets, you pay 0.54% of the volume, min. EUR 17 (reduced to 0.50% from January 26, 2024, min. EUR 17). For UK stores, the fee is 0.63%, min 17 GBP, EUR, or USD (will be 0.40%, min 17 GBP, EUR, or USD).
Raiffeisenbank has a new investment mobile application, Raiffeisen investments, from June this year, where you invest through the RBroker platform.
Fees
On the Prague Stock Exchange, the investor pays 0.11%, min. CZK 100 from the purchased volume of shares, to German 0.20%, min. 20 EUR, in the USA the fee is also 0.20%, min. $10, UK on purchase 0.70%, min. 50 EUR (detailed price list).
V Czechoslovak Commercial Bank (ČSOB) you can trade through the Patria Finance platform.
Fees
On the Czech stock exchange, you pay 0.45%, min. CZK 80, in the USA for a volume of up to 299,999 the fee is USD 14.90, on the German exchange you will pay EUR 21.90 for the same purchase (detailed price list).
2023-11-12 23:00:15
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