Is Scalable Capital Safe? Regulation, Deposit Protection and Custody Explained
Yes, Scalable Capital is safe and legitimate. It is now a fully licensed German bank supervised by BaFin, so cash is protected under statutory deposit guarantees of up to €100,000 per partner bank, while securities are held in custody and covered by the German Investor Compensation Scheme at 90% up to €20,000. Capital at risk.
Reviewed by Yaniv Barshaf · Fees verified June 2026 · Our methodology
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From neobroker to licensed bank
Scalable Capital began as a German neobroker and robo-adviser and has since become a fully licensed bank. In September 2025 it received authorisation from the European Central Bank to conduct deposit and lending business, making Scalable Capital Bank AG a CRR credit institution, that is, a full bank under EU rules, supervised by BaFin and the Deutsche Bundesbank. This is a meaningful upgrade in status, because a banking licence brings the firm under banking-grade capital, prudential and client-money requirements rather than the lighter regime for investment-only firms. For a safety-minded investor, the headline is that Scalable is now a supervised German bank, with an independent authority setting the rules on how client money and assets are held and able to intervene if they are breached. Regulation does not eliminate investment risk, but it firmly establishes Scalable's legitimacy. As of July 2026, Scalable Capital Bank AG is BaFin and Bundesbank-supervised. Capital at risk.
How your cash is protected
Your uninvested cash is protected under statutory deposit guarantees, and Scalable uses a multi-bank structure that can extend that protection. Cash is covered up to €100,000 per bank under the standard German and EU statutory deposit-guarantee framework. Because Scalable can distribute client cash across several partner banks, the effective statutory protection can be multiplied: on the PRIME+ plan, cash may be spread across up to five banks, giving statutory cover of up to five times €100,000, with some partner banks also offering additional voluntary deposit guarantees on top. Where cash is instead held in money-market funds, European UCITS investor-protection rules apply rather than the deposit guarantee. The practical takeaway is that the €100,000-per-bank figure is the building block, and the multi-bank distribution is what can raise your total protected cash above a single €100,000 limit. Always check the current partner-bank arrangements that apply to your plan, as these can change. Capital at risk.
Where your securities are held
Your shares and ETFs are not owned by Scalable Capital. Custody and back-end execution have historically run through Baader Bank, an established German securities bank, which holds the assets in segregated arrangements separate from Scalable's own funds. This segregation is central to safety: if Scalable failed, your securities are held for you rather than treated as assets available to its creditors, and the aim would be to return or transfer them. As a backstop, securities are covered by the German Investor Compensation Scheme, which pays 90% of a securities claim up to a maximum of €20,000 per person, as of July 2026. So the protection is layered: segregation through the custody structure first, then the compensation scheme if there is a genuine shortfall. As with its German peers, the €20,000 securities-compensation limit is modest against a large portfolio, which is worth bearing in mind if you hold substantial investments. Custody and partner arrangements can evolve, so confirm the current setup before relying on specifics.
What is not covered
It is important to be clear about the limits of these protections. Neither the deposit guarantee nor investor compensation protects you against investment losses: if your holdings fall in value because markets move against you, no scheme reimburses that, because it is ordinary investment risk. The €100,000-per-bank deposit guarantee applies only to cash and only if a partner bank fails; the 90%-up-to-€20,000 investor-compensation cover applies only to a genuine shortfall in segregated securities after a failure, not to the everyday value of your holdings. Money-market fund holdings are governed by UCITS rules rather than the deposit guarantee. The distinction is the same for every regulated provider: compensation schemes address firm failure and shortfalls, not the normal volatility of investing. The prudent approach is to understand exactly which scheme applies to each part of your account and up to what limit, and to invest only money you can leave invested through market ups and downs. Capital at risk.
So, is Scalable Capital safe overall?
Judged as an institution, Scalable Capital sits on solid ground: a full German banking licence under BaFin and Bundesbank supervision, statutory deposit protection of up to €100,000 per partner bank, multiplied across banks on higher plans, securities held in segregated custody through Baader Bank, and German investor-compensation cover at 90% up to €20,000. That combination places it firmly among legitimate, well-protected providers. Founded in 2014 and now operating as a licensed bank, it has grown into one of Germany's larger investment platforms. The honest caveats are the modest €20,000 securities-compensation cap relative to the deposit guarantee, the fact that money-market allocations fall under UCITS rather than deposit protection, and the general truth that no scheme covers market losses. As of July 2026, the safety picture described here stands. Capital at risk.
The bottom line
Scalable Capital is a safe, legitimate provider. It is now a fully licensed German bank under BaFin and Bundesbank supervision, protects cash under statutory deposit guarantees of up to €100,000 per partner bank, multiplied across banks on higher plans, holds securities in segregated custody through Baader Bank, and covers securities via the German Investor Compensation Scheme at 90% up to €20,000, as of July 2026. The caveats are the modest €20,000 securities cap, the UCITS treatment of money-market holdings, and the fact that no scheme covers market losses. Capital at risk.
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Frequently Asked Questions
Is Scalable Capital regulated?
Yes. Scalable Capital Bank AG is a fully licensed German bank, authorised by the ECB for deposit and lending business in September 2025 and supervised by BaFin and the Bundesbank, as of July 2026. That brings it under banking-grade capital and client-asset rules.
How is my cash protected at Scalable Capital?
Cash is protected by statutory deposit guarantees up to €100,000 per partner bank. Because Scalable spreads cash across several banks, protection can be multiplied, up to five times €100,000 on PRIME+. Money-market holdings instead fall under UCITS rules. Capital at risk.
Where are my securities held with Scalable Capital?
Your shares and ETFs are held in segregated custody, historically through Baader Bank, separate from Scalable's own funds. If the firm failed they should be returned or transferred, with the German Investor Compensation Scheme covering 90% up to €20,000 for any shortfall.
Does Scalable Capital protection cover investment losses?
No. Deposit guarantees and investor compensation only apply if a bank or the firm fails and there is a shortfall. They never cover losses caused by your investments falling in value, which is ordinary market risk you carry yourself. Capital at risk.