Degiro is a low-cost dutch broker established by a group of former bankers aiming to disrupt the brokerage industry in Europe. Offering cheap commissions and a solid trading platform they have experienced rapid growth with 250,000 customers, managing close to €30 billion in transaction every year. Since launching in Ireland in 2015, they have made waves within the Irish market, charging lower fees than well-known brokers such as Davys, Goodbody Stockbrokers and Cantor Fitzgerald. They provide access to a range of assets classes including bonds, mutual funds, stocks, trackers, futures and options. Degiro currently operate in 18 countries across the EU and are regulated by the Dutch Central bank. Luckily they are not regulated by the Irish Central Bank, everyone knows how incompetent they are.
Opening an Account
The whole account setup process is relatively straightforward which is rare for an online stock broker. There is no need to fill out any paperwork as they use a “derived bank identification” to verify accounts, your account should be approved within two to five business days. In total it takes ten minutes to fill in the required registration information. When signing up there are five different account types to choose from:
- Basic – not allowed to borrow money or trade with margin.
- Custody – no margin but you can trade some leveraged products.
- Active – Up to 50% margin available.
- Trader – 100% margin available.
- Day Trader – 100% margin with additional margin offered during trading hours.
If you’re new to the stock market go with the basic or custody account, I’ve seen so many inexperienced traders blow up accounts with margin. Using margin basically means you’re borrowing money from your broker, it’s used when short selling an asset class to profit from a drop in price. I’ve seen online some people have concerns about giving their PPS number but like all stock brokerages Degiro need this information. When joining, provide your IBAN number for your bank account, transfers generally take 2-3 business days to clear. If you bank with AIB or Permanent TSB, Trustly can be used to make an instant deposit at a cost of €1. There are two options for funding an account, via bank transfer and SOFORT. You can only make withdrawals via bank transfer, SOFORT is not allowed.
Degiro offer the lowest fees on nearly all of their investment products. Unlike other brokerages, they don’t charge inactivity or stupid maintenance fees. Buying Irish shares on the ISEQ is really cheap! Example, purchasing €1,000 worth of Bank of Ireland shares will cost €2.40, in comparison with Goodbody stockbrokers it would cost €25 in commissions. That’s a staggering €22.60 difference in fees!
List of Extra Fees:
Real Time Stock Quotes – Degiro charge extra for real time prices which is annoying. Prices displayed on the platform are delayed by 15 minutes. The fee depends on the exchange, it ranges from €1.50 to €21 per month.
Currency Conversion Cost – If you are buying a financial asset in a different currency, the conversion cost will be the daily exchange rate and a 0.10% foreign exchange fee.
Exchange Connection Fee – This a new cost introduced and does not apply to the ISEQ. It’s cost €2.50 per year for each exchange traded on regardless of how many trades you make. Example if you trade on the Nasdaq, London Stock Exchange and Hong Kong Stock Exchange it will cost €7.50 every year. This fee is charged on a monthly basis, 20 cent for each exchange.
Dividend Processing Fee – Assets such as ETF’s and stock may give dividends, the fee charged on dividends will depend on your account type. With a basic or active account, there is no fee for processing dividends, with a custody account the charge is €1 plus a 3% dividend.
Degiro has both a desktop (webtrader) and mobile trading platform for customers. They have a solid platform that has all the features you would expect such as stock market news, charts, transaction history and portfolio management. Out of 10 I would rate their platform a seven, not amazing but considering how cheap the commissions are I don’t care too much. In addition, the user interface is easy to navigate, so it doesn’t take long to learn how to place trades.
- Great low-cost alternative to Davy and Goodbody Stockbrokers.
- There is no account minimum required, perfect for beginners who want to start out with under €1,000 to gain some experience.
- They offer access to a wide range of financial products.
- Perfect for long-term investors just looking to buy shares without being charged expensive inactivity fees.
- Allows investors buy shares on all major exchanges.
- Safe and reliable – all customers deposits are held in a separate custodian account so if they go bust, client deposits will not be recoverable assets to creditors.
- Customer service needs to improve, don’t have enough staff to support all customers and it can take days to receive a response.
- Not suitable for active day traders.
- No demo account available for beginners.
- No education or research options available.
- €20,000 is the maximum amount that is protected in case of bankruptcy.
- Exchange connection fee is a small but sneaky charge not many customers know about.
Degiro is a great broker for those new to investing and have €1,000 to €20,000 worth of capital to invest. Interactive Brokers is a better option for experienced day traders looking for faster executions. While no broker is perfect, Degiro does receive negative reviews from clients. Customers complain about the company not offering tax efficient accounts, slow executions and poor customer service. It’s simple, if you want a better service sign up with a more expensive broker such as Interactive Brokers.