If you opened a Scalable Capital account any time before roughly 2024, your money never actually sat “at Scalable”. Your cash and your securities custody account lived at Baader Bank, a Munich-based bank doing the plumbing behind the scenes. Scalable was the app, the pricing and the customer relationship; Baader was the bank. That division of labour is now changing, because Scalable has been building its own banking infrastructure and migrating customers onto it.
The short, honest answer to the question most readers bring here: the transition does not make your money less safe. German regulation, the €100,000 statutory deposit guarantee and the segregation of your ETF holdings all continue to apply. What changes is which regulated entity holds your cash, and that is worth understanding, because deposit protection attaches to a specific bank, not to an app.
I went through this exact “which entity actually has my money?” exercise with my own account. Here is the old setup, the new one, what stays true in both worlds, and what I would check after any migration email.
How the original Scalable Capital and Baader Bank setup worked
When Scalable launched its broker in 2020, it chose the model most German neobrokers used at the time: partner with an established bank rather than become one. Scalable Capital held a BaFin licence as a securities institution; Baader Bank AG, a fully licensed German bank, provided the account infrastructure underneath.
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Concretely, that meant three things:
- Your uninvested cash sat at Baader Bank, covered by the German statutory deposit guarantee up to €100,000 per customer per bank.
- Your ETFs and shares sat in a Baader custody account as segregated client assets, not on anyone’s balance sheet.
- Double oversight applied in practice: BaFin supervised Scalable as a securities institution and Baader as a bank.
This is why older reviews, including my own safety review of Scalable Capital, spend so much time on Baader. For years, “is Scalable safe?” was largely “is Baader Bank safe?” wearing a fintech jacket.
What changed: Scalable Capital built its own banking stack
Scalable’s ambition was never to remain a front-end for someone else’s bank. Over the past few years it has broadened its own licences, obtained a full banking licence of its own, and begun migrating customers from Baader accounts onto Scalable’s own accounts. Recent joiners have generally been onboarded directly onto Scalable’s infrastructure, while Baader-era customers are moved across in waves.
I want to be careful here, because this is an evolving transition, not a single event. Which entity holds your cash today depends on when you joined and whether your account has been migrated yet. The only reliable way to know is to check your own account, covered below; do not assume your situation matches a friend’s or an article written a year ago.
Why did Scalable bother? Owning the stack cuts out fees paid to a partner bank, gives Scalable control over interest on cash, speeds up product launches and removes a third-party dependency. Trade Republic walked the same road with its own full banking licence; my Scalable Capital vs Trade Republic comparison covers how their models now mirror each other.
What stays true no matter which bank holds your assets
The protective architecture is identical in both worlds, because it is defined by German and EU law, not by Scalable’s corporate structure.
Your securities are Sondervermögen: segregated, not the bank’s property
Your ETF units are held in custody for you and never appear on the balance sheet of Scalable, Baader or any custodian as that firm’s own assets. If the broker or the bank failed, your holdings would not enter the insolvency estate; they would be transferred to you or another custodian. I walk through the full mechanics in my guide to what happens to your ETFs if a European broker goes bankrupt.
Cash is protected up to €100,000 at whichever bank holds it
Uninvested euro balances are covered by Germany’s statutory deposit guarantee up to €100,000 per customer per bank. On the old setup that protection attached to Baader Bank; after migration it attaches to Scalable’s banking entity. The amount and legal basis are the same; only the name of the covered institution changes. If you routinely hold more than €100,000 in idle cash at one bank, that is worth revisiting regardless of broker.
BaFin supervision continues
Scalable’s entities are authorised and supervised in Germany. You can verify any German institution’s licence status in the public database of BaFin, the German financial supervisor; two minutes of checking beats any amount of forum speculation.
Baader-era setup vs Scalable’s own banking setup
| Feature | Old setup (via Baader Bank) | New setup (Scalable’s own bank) |
|---|---|---|
| Who holds your cash | Baader Bank AG | Scalable’s own banking entity |
| Deposit protection | €100,000 statutory, attached to Baader | €100,000 statutory, attached to Scalable’s bank |
| Securities custody | Segregated client assets at Baader | Segregated client assets at Scalable’s custodian |
| Regulator | BaFin (both entities) | BaFin |
| German tax handling (Abgeltungsteuer, Vorabpauschale) | Automatic for German residents | Automatic for German residents |
| Your IBAN | Baader-issued IBAN | New IBAN after migration |
| Action required from you | None | Update standing orders and salary transfers to the new IBAN |
The €100,000 threshold is set by law, but migration details can differ by country and customer cohort. Treat your own migration email as authoritative over anything written here.
What to check in your Scalable Capital account after a migration email
When the migration email lands, resist the urge to file it under “corporate housekeeping”. Ten minutes of checking is worthwhile:
- Identify the entity that now holds your cash. Open the account or legal documents section in the app and read which bank your cash account sits with. This tells you where your €100,000 deposit protection now attaches.
- Note your new IBAN and update anything that feeds the old one: savings plan top-ups, standing orders, employer payments. Old IBANs are typically forwarded for a while, but do not rely on that indefinitely.
- Confirm your custody account carried over correctly: holdings, quantities and, importantly, acquisition costs (Einstandskurse). Cost basis errors are rare but painful at tax time.
- Check your tax exemption order (Freistellungsauftrag) if you are a German resident. It is registered with a specific institution, so verify it survived the move or set it up again.
- Download your historical documents. Baader-era statements and tax reports should remain available, but I keep my own PDF archive outside any broker.
- Confirm interest terms on cash. Interest offers are commercial terms, not protected rights, and a migration is a natural moment for them to change.
None of this is unique to Scalable; any broker migration or custodian change deserves the same checklist.
Does the move make Scalable Capital more or less safe?
My view: broadly neutral, with mild long-term positives and one honest caveat.
The neutral part is structural. Your protections come from German law and BaFin supervision, and those are unchanged whether the bank underneath is Baader or Scalable’s own.
The mild positives: fewer moving parts. When one company controls the app, the accounts and the custody chain, reconciliation issues between two firms’ systems disappear as a failure category. Owning the economics of cash also makes Scalable’s business sturdier, and a profitable broker is a safer broker in the way that matters most: it is less likely to disappear, be sold or degrade its product.
The honest caveat: Baader Bank has operated since 1983, while Scalable’s banking operation is new. A young bank has less crisis-tested history, even under identical regulation. I do not consider this a reason to leave, because the deposit guarantee and asset segregation do not care about a bank’s age. But it is fair to note, and it is why I keep only working cash at any neobroker rather than large idle balances.
If you are reading from outside Germany, my overview of which countries Scalable Capital serves covers how the offering differs across markets.
What I’d do
If you are an existing customer: stay put, read the migration email properly, work through the checklist above, and get your uninvested cash below €100,000 at any single bank if it is not already. There is no safety-driven reason to move your portfolio.
If you are choosing a broker today: the Baader question is no longer a differentiator, because Scalable’s destination model, a broker on its own banking licence, is the same shape as Trade Republic’s. Choose on costs, savings-plan selection, exchange access and interface instead; my ranking of the best brokers for German investors puts the field side by side.
And let the episode teach one habit: always know which regulated entity holds your cash and which holds your securities. It is the most useful safety check a European investor can make, and it takes five minutes a year.
Frequently asked questions
Q: Is my money safe during the Scalable Capital migration away from Baader Bank?
A: Yes, structurally. Your securities are segregated client assets throughout, and your cash is covered by the German statutory deposit guarantee up to €100,000 at whichever bank holds it. The migration changes the institution behind your account, not the legal protections around it.
Q: How do I find out whether my account is still at Baader Bank or already on Scalable’s own infrastructure?
A: Check inside the app: your account details, IBAN and legal documents state which bank operates your cash and custody accounts. A Baader-issued IBAN indicates the old setup; a new IBAN after a migration email indicates Scalable’s own stack. When in doubt, ask support to confirm in writing.
Q: Does the €100,000 deposit protection apply twice if I have money at both Baader and Scalable’s bank during the transition?
A: Protection applies per customer per bank, so balances at two different banks are each covered up to €100,000 in principle. In practice your cash sits at one bank at a time during migration, so treat €100,000 as your ceiling for uninvested cash. The guarantee covers bank deposits only; ETF holdings are protected by segregation instead.
Q: Do I need to sell my ETFs or open a new account because of the change?
A: No. The migration moves your existing custody account, holdings and cost basis to the new infrastructure; selling would only trigger unnecessary taxes. Your job is verification: confirm holdings, acquisition costs and any tax exemption order carried over correctly.
Q: Why did Scalable Capital want its own banking licence at all?
A: Running on a partner bank means paying that partner and depending on its systems. With its own licence, Scalable keeps the economics of customer cash, controls interest offers and removes a third-party dependency. It is the same path Trade Republic took, and it generally signals a maturing, better-capitalised business.
Q: Is a new bank like Scalable’s riskier than an established one like Baader?
A: A younger bank has a shorter track record, but the protections that matter are identical: BaFin supervision, statutory deposit insurance up to €100,000 and segregated custody. The sensible response is not avoiding new banks but limiting idle cash at any single institution and knowing which entity holds what.
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European UCITS/ETF investor with 11+ years building a global dividend and index portfolio, and founder of Financial Expert Class. I write every guide here from first-hand experience investing across EU brokers and tax regimes — not theory. More about me →