Table of Contents
Honest Review of DEGIRO: Is It Right for Global Index Fund Investors?
Choosing the right broker is key to building a successful investment strategy. This review I will focusing on how it would work doing it with global index funds at DEGIRO, a well-known European broker with a reputation for low fees and broad market access.
🌍 The Reviews Focus: Can we use DEGIRO for Passive investing through ETFs that track global indices.
🚀 What You’ll Learn:
🟢 Pros and Cons of DEGIRO
💸 Detailed Fees and Pricing Structure
📱 Ease of Use and Convenience of the platform
🔒 Safety and Regulatory Protection measures
🌍 Navigating DEGIRO by Country and currency compatibility
Overall Assessment 4.5/5
DEGIRO is a cost-effective European broker known for its low fees and broad market access, making it suitable for passive investors focusing on global index funds. However, it lacks some conveniences like fractional shares and automated savings plans, and its platform can be less user-friendly.
| Criteria | Rating |
|---|---|
| Fees and Commissions | |
| Product Range | |
| Platform Usability | |
| Customer Service | |
| Safety and Regulation | |
| Account Setup and Minimums | |
| Additional Features | |
| Currency Support and Conversion Fees | |
| Educational Resources | |
| Wealthy Forever Rating |
Quick Overview
| Feature | Available | Details |
|---|---|---|
| Low-cost ETFs for Global Indices | ✅ | Core ETF selection with €0 commission + €1 handling |
| Fee Level | Low | Check detailed fee structure |
| Currency Exchange | 0.25% | Avoid by trading in your home market currency |
| Deposit Account in Multiple Currencies | ❌ | Only supports one deposit currency per account without exchange rates. |
| Interest on Cash | ❌ | No interest on cash balances Read more |
| Regulatory Safe | ✅ | Details on regulatory safety |
| Public company | ✅ | The public company is named flatexDEGIRO AG and the ticker is FTKd |
| Hidden Fees | ❌ | Includes payment for order flow for German accounts. And if they use Tradegate. Learn more about hidden fees |
| Margin Lending | ✅ | 6.90% Unallocated rate 5.25% Allocated rate As of 2024-09-04. See DEGIRO website for the most up-to-date rates. |
Pros and Cons of DEGIRO
✅ Pros of DEGIRO:
- Low and transparent fees, especially for their Core ETF selection, which aligns well with a passive investment strategy
- Extensive ETF Selection: Access to a wide range of ETFs, including global indices, that can allow you to diversify your portfolio effectively.
- Available in many countries across Europe
❌ Cons of DEGIRO:
- No Fractional Shares: This limits flexibility, especially if you're investing smaller amounts.
- Connectivity fees for using different exchanges
- The app can be confusing and isn’t the most user-friendly
- Does not pay interest on cash balances
- Expensive to transfer your shares out of DEGIRO. Might be cheaper to sell and rebuy if changing brokers
Fees
Understanding DEGIRO’s Fee Structure
One of the main reasons investors choose DEGIRO is because of its low fees. However, it's important to understand that the fee structure can vary depending on the country you're in, which might make things a bit confusing. DEGIRO charges two main types of fees: transaction fees and connectivity fees. Additionally, if you trade in a product that isn't in the currency you hold, you’ll incur a 0.25% exchange fee.
Transaction Fees: These fees are split into two parts: commission and handling fees. The commission is the base fee you pay per trade, and the handling fee is an additional fixed cost. For example, buying stocks on Euronext Amsterdam incurs a fee of €2 for commission plus a €1 handling fee, totaling €3. Similarly, buying on a US exchange would cost €1 for commission and €1 for handling, totaling €2.
Connectivity Fees: DEGIRO charges a €2.50 annual connectivity fee per stock exchange you trade on, but this fee is waived for your home exchange (like Euronext Amsterdam for Dutch clients). If you’re looking to minimize these costs, we have a detailed guide on how to do so, focusing on DEGIRO’s ETF Core Selection and home market strategies. Learn how to minimize costs on DEGIRO here.
Currency Exchange Fees
Avoiding Unnecessary Costs: In addition to transaction and connectivity fees, DEGIRO also charges a currency exchange fee of 0.25% if you trade in a product that isn't in the currency you hold. However, you can avoid this fee by sticking to instruments that trade in your home market currency, such as euros, if your account is euro-based. This strategy can help minimize your overall costs and keep your investments as efficient as possible.
Degiro fees by country
Below, you’ll find a table summarizing the costs for each DEGIRO branch. Each branch has its own fee structure, including transaction fees, handling costs, and connectivity charges. Click on the country links for detailed information directly from DEGIRO.
| Country | Home Market | US Stocks | Local Stocks | Selected ETFs | Global ETFs |
|---|---|---|---|---|---|
| 🇬🇧 UK - United Kingdom | London Stock Exchange | €1 + €1 | £1.75 + £1 | €0 + €1 | €2 + €1 |
| 🇸🇪 SE - Sweden | OMX Stockholm | €1 + €1 | 10 SEK + 10 SEK | €0 + €1 | €2 + €1 |
| 🇮🇪 IE - Ireland | Irish Stock Exchange | €1 + €1 | €2 + €1 | €0 + €1 | €2 + €1 |
| 🇫🇷 FR - France | Euronext Paris | €1 + €1 | €1 + €1 | €0 + €1 | €2 + €1 |
| 🇩🇪 DE - Germany | XETRA | €1 + €1 | €3.90 + €1 | €0 + €1 | €2 + €1 |
| 🇳🇱 NL - Netherlands | Euronext Amsterdam | €1 + €1 | €2 + €1 | €0 + €1 | €2 + €1 |
| 🇵🇹 PT - Portugal | Euronext Lisboa | €1 + €1 | €1 + €1 | €0 + €1 | €2 + €1 |
| 🇬🇷 GR - Greece | Athens Stock Exchange | €1 + €1 | €0.50 + €1 | €0 + €1 | €2 + €1 |
| 🇪🇸 ES - Spain | BME | €1 + €1 | €1 + €1 | €0 + €1 | €2 + €1 |
| 🇨🇭 CH - Switzerland | SIX | €1 + €1 | CHF 5 + CHF 1 | €0 + €1 | €2 + €1 |
| 🇫🇮 FI - Finland | Irish Stock Exchange | €1 + €1 | €3.90 + €1 | €0 + €1 | €2 + €1 |
| 🇮🇹 IT - Italy | Borsa Italiana | €1 + €1 | €1 + €1 | €0 + €1 | €2 + €1 |
| 🇩🇰 DK - Denmark | OMX Copenhagen | €1 + €1 | 10 DKK + 10 DKK | €0 + €1 | €2 + €1 |
| 🇵🇱 PL - Poland | GPW | €1 + €1 | 1 PLN + 10 PLN | €0 + €1 | €2 + €1 |
| 🇨🇿 CZ - Czech Republic | Burza cenných papírů praha | €1 + €1 | CZK 20 + CZK 10 | €0 + €1 | €2 + €1 |
Convenience of DEGIRO
While DEGIRO shines in cost-effectiveness, it’s important to consider the overall convenience. Here’s what you need to know:
Savings Plans: Unfortunately, DEGIRO does not offer automated savings plans, which might be a deal-breaker if you’re looking for a fully hands-off experience. However, on this site, we'll show you how to set up your own automated savings strategy without relying on financial advisors or robo-advisors that often charge higher fees than necessary. With the right tools and approach, you can achieve the same results while keeping your costs low.
Access to Global Indices ETFs: DEGIRO provides access to a broad range of global indices ETFs, particularly through its Core ETF selection. These ETFs cover major global indices, offering you the opportunity to invest in diversified portfolios with low fees. Some of the most popular ETFs from DEGIRO's Core list include:
iShares Core MSCI World UCITS ETF (Ticker: IWDA, ISIN: IE00B4L5Y983):
Tracks the MSCI World Index, covering large and mid-cap stocks across 23 developed markets.Vanguard FTSE All-World UCITS ETF (Ticker: VWRL, ISIN: IE00B3RBWM25):
Tracks the FTSE All-World Index, which includes large and mid-cap stocks from both developed and emerging markets.iShares MSCI EM UCITS ETF (Ticker: EIMI, ISIN: IE00BKM4GZ66):
Tracks the MSCI Emerging Markets Index, offering exposure to large and mid-cap companies in emerging markets.Fractional Shares: DEGIRO doesn’t support fractional shares, meaning you need to buy whole shares, which can be limiting if you’re investing smaller amounts.
Customer Support: DEGIRO’s customer support is available via email and phone, and they’re generally helpful. You can even reach them until 10 PM, which is a nice touch.
Read all you need to read?: Take the plunge and open your account today.
Setting Up an Account with DEGIRO
Setting up an account with DEGIRO is fairly straightforward. Here’s a quick overview of the process:
Time to Open an Account: Most users can have their account up and running within a day.
Mobile and Web App: DEGIRO offers both, but the web app is usually smoother to use, especially for setting up your account.
Ease of Use: DEGIRO’s interface is functional, but not the most user-friendly. It’s more of a no-frills platform that gets the job done.
Is DEGIRO Safe?
When it comes to investing, safety is a top concern. Here’s what you need to know about DEGIRO’s safety measures:
Regulation: DEGIRO is regulated by BaFin (Germany) and AFM (Netherlands), providing a solid layer of oversight.
Past Issues: DEGIRO has had some regulatory issues in the past, including a significant fine in 2020 for organizational shortcomings. New management has been brought in to address these issues and most recently Oliver Behrens, long-standing CEO of Morgan Stanley Europe SE, as CEO from October 1, 2024.
Investor Protection: Your assets are protected by the European investor protection scheme up to €20,000.
Deposit Guarantee: Cash deposits are protected up to €100,000 by the German deposit guarantee scheme.
Securities Lending: DEGIRO’s terms allow for securities lending, which could expose you to some counterparty risk, although they claim not to engage in this practice at present.
Currency Compatibility: Is DEGIRO Right for You?
DEGIRO’s platform is designed with European investors in mind, but it’s important to consider how well it works depending on your currency preferences and location. Here's a quick overview of who DEGIRO is best suited for:
Region | Currency Compatibility | Recommendation |
|---|---|---|
Europe | EUR, GBP, CHF | Excellent choice for European investors due to no connectivity fees on home exchanges and broad market access. |
United States | USD | Not ideal for U.S. investors, as it does not offer USD as a base currency and lacks support for U.S. tax compliance. |
Asia | - | Probably not unless you are geting paid in EUR, GBP, CHF or already have a bank account in one of these currencies. |
Summary: Is DEGIRO Right for You?
DEGIRO stands out as one of the most cost-effective brokers in Europe. Its low fees, especially for their Core ETF selection, make it an attractive option for many investors, but it’s not without its drawbacks. The lack of fractional shares, connectivity fees, and past regulatory issues are worth considering. However, if you’re looking for a no-nonsense platform with a broad selection of ETFs and low transaction costs, DEGIRO might just be the right fit for your investment needs.
Want to read more about how DEGIRO stacks up against Interactive Brokers (IBKR)? Check out the detailed comparison here.
Frequently Asked Questions
How does Trading 212 make money?
Trading 212 makes money through the 0.15% currency conversion fee when you trade assets in a currency different from your account's base currency, and from share lending proceeds, which are split 50/50 with the investor. Additionally, on the CFD side, they earn revenue through overnight interest fees and CFD spreads.
Is Trading 212 safe to use?
Yes, Trading 212 is regulated by reputable authorities such as the FCA in the UK, CySEC in Cyprus, and ASIC in Australia. Client assets are protected up to €20,000 under the European investor protection scheme.
Does Trading 212 charge commission fees?
No, Trading 212 offers commission-free trading on stocks and ETFs. There are no fees for buying or selling these assets.
What are the currency conversion fees with Trading 212?
A low fee of 0.15% applies only when converting funds from one currency to another. This fee is lower than many other brokers, such as DEGIRO, which charges 0.25%.
Does Trading 212 support multiple currencies?
Yes, Trading 212 supports 13 global currencies, including USD, EUR, GBP, CHF, DKK, NOK, PLN, SEK, CZK, RON, BGN, and HUF. This allows you to deposit, withdraw, and invest in your preferred currency, potentially avoiding currency conversion fees.
Can I invest in fractional shares with Trading 212?
Yes, Trading 212 allows you to invest in fractional shares, enabling you to invest from as little as €1, even in high-priced stocks.
Does Trading 212 offer automated investing or savings plans?
Yes, Trading 212 offers an 'AutoInvest' feature that allows you to set up automated savings plans and build a diversified portfolio.
What is securities lending on Trading 212?
Securities lending is an optional feature where your shares can be lent out to other financial institutions. The revenue generated from this is split 50/50 between you and Trading 212. This feature is enabled by default but can be turned off if you prefer not to participate.
Does Trading 212 offer CFDs, and are they risky?
Yes, Trading 212 offers CFD (Contracts for Difference) trading. CFDs are complex financial instruments that come with a high risk of losing money rapidly due to leverage. They are generally not recommended for beginners or for those following a long-term, passive investment strategy.
Is Trading 212 available in my country?
Trading 212 is available in multiple countries through different entities. However, residents of Belgium are currently unable to open an account with Trading 212 due to regulatory restrictions. Before signing up, check the list of supported countries to ensure that Trading 212 offers services in your country of residence.
Does Trading 212 provide tax support?
Trading 212 provides limited tax support. You'll need to handle your own tax reporting and calculations, as they do not withhold taxes like the TOB (Belgian transaction tax) or dividend taxes for you.
Does Trading 212 pay interest on uninvested cash?
Yes, Trading 212 pays competitive interest rates on your uninvested cash balances in various currencies.
Can I open joint, children, or business accounts with Trading 212?
No, Trading 212 does not currently support joint accounts, children accounts, or business accounts.
Are there any hidden fees with Trading 212?
Trading 212 maintains a transparent fee structure with no hidden fees. They do not charge fees for deposits (up to certain limits), withdrawals, or account maintenance. However, be aware of the 0.15% currency conversion fee when converting funds and any regulatory fees imposed by governments.
Can I move my assets from Trading 212 to another broker?
No, currently Trading 212 does not support transferring assets to another broker. You would need to sell your assets and withdraw the funds before investing through another broker.
Does Trading 212 engage in Payment for Order Flow (PFOF)?
No, Trading 212 does not engage in Payment for Order Flow practices. This means they do not receive compensation for routing your orders to specific market makers, which can help ensure better trade execution for you.
Does Trading 212 offer educational resources for beginners?
Trading 212 offers some educational content, but it may not be sufficient for complete beginners. The platform is feature-rich and may be overwhelming for new investors. If you're a beginner seeking extensive educational resources, you might consider other platforms.
Disclaimer: The information provided on this website is for educational and informational purposes only and does not constitute financial advice. Investing in financial markets involves risk, including the potential loss of principal. Past performance is not indicative of future results. We recommend consulting with a qualified financial advisor before making any investment decisions. Wealthy Forever is not responsible for any investment decisions made based on the information provided here.
We encourage you to conduct your own research and consider your personal financial situation when making investment decisions.