DEGIRO is a well-established online brokerage firm that has gained a strong reputation in Europe and beyond for offering a low-cost trading platform. Launched in 2013, DEGIRO was created with the vision of providing retail investors with the same low-cost access to the financial markets as professional traders. Over the years, it has attracted a large user base due to its competitive fees, extensive market access, and user-friendly platform. With DEGIRO, traders and investors have access to a wide range of financial products, including stocks, bonds, ETFs, and derivatives, across multiple global exchanges. This review will delve into the background of DEGIRO, its account types, and the trading platforms it offers, providing a comprehensive analysis for prospective users.
Background Information
DEGIRO was founded in the Netherlands by former employees of a major European broker, aiming to disrupt the brokerage industry by offering low-cost trading to retail investors. Since its inception, the company has expanded rapidly across Europe, now serving clients in over 18 countries. In 2020, DEGIRO was acquired by flatex AG, a German online broker, forming one of the largest European brokerages in terms of client base and assets under management. This merger has strengthened DEGIRO’s position in the market, providing it with additional resources and infrastructure to enhance its services.
Regulation is a critical aspect of any brokerage, and DEGIRO is no exception. It operates under the supervision of the Dutch Central Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM). Additionally, after its acquisition by flatex, it became subject to German regulatory oversight, including that of the Federal Financial Supervisory Authority (BaFin). This dual regulatory framework ensures that DEGIRO adheres to stringent European financial regulations, offering a layer of security and trust for its users. However, it’s important to note that DEGIRO does not provide negative balance protection, a feature that is standard with many other brokers. This means that in extreme market conditions, clients could lose more than their initial investment.
DEGIRO’s reputation is generally positive, particularly praised for its low fees and extensive range of tradable assets. It has received numerous awards for its services, including accolades for best broker and best mobile trading platform in various European countries. However, some users have raised concerns about the lack of certain features, such as comprehensive research tools and advanced charting capabilities, which are often expected by more experienced traders.
Account Types
DEGIRO offers several account types tailored to different levels of investor experience and trading needs. The primary account categories are Basic, Active, and Trader accounts, each offering varying levels of access to financial products and leverage.
The Basic Account is designed for those who are new to investing or prefer a more straightforward approach. This account type provides access to a wide range of financial products, including stocks, ETFs, bonds, and investment funds, but it does not allow for leveraged trading or short selling. The Basic Account is ideal for long-term investors who are primarily interested in building a portfolio without engaging in more speculative trading activities.
The Active Account caters to more experienced investors who wish to engage in a broader range of trading activities. This account type allows for limited leveraged trading and short selling, making it suitable for those who want to take advantage of market fluctuations while still maintaining a relatively conservative approach. The Active Account also offers access to options and futures trading, providing additional tools for managing risk and enhancing returns.
For the most experienced traders, DEGIRO offers the Trader Account. This account type provides full access to all of DEGIRO’s financial products, including derivatives and leveraged products. With the Trader Account, users can engage in margin trading with higher levels of leverage, allowing for more aggressive trading strategies. This account type is designed for those who are comfortable with higher levels of risk and have a deep understanding of the markets.
In addition to these main account types, DEGIRO also offers a Custody Account. This account is unique in that it provides an extra layer of security by ensuring that clients’ assets are held separately from DEGIRO’s own assets. While this account type is slightly more expensive in terms of fees, it is popular among investors who prioritize the safety of their assets above all else. However, it should be noted that the Custody Account does not allow for certain trading activities, such as lending securities, which can limit potential income from the portfolio.
Trading Platforms
DEGIRO offers a proprietary trading platform that is accessible via web and mobile applications. The platform is designed with simplicity and functionality in mind, catering to both beginner and intermediate investors. The web platform is browser-based, meaning there is no need to download or install any software, which adds to its convenience.
The User Interface of the platform is clean and intuitive, making it easy for users to navigate through various sections such as their portfolio, order execution, and market data. One of the key features of the DEGIRO platform is its extensive market access, allowing users to trade on over 50 global exchanges. This includes major markets like the NYSE, NASDAQ, and London Stock Exchange, as well as smaller, regional exchanges. The platform also supports a wide range of order types, including market, limit, and stop orders, providing flexibility in executing trades.
Despite its user-friendly design, the DEGIRO platform does have some limitations. For example, while it offers basic charting tools and technical indicators, these features are relatively limited compared to more advanced trading platforms. This might be a drawback for experienced traders who rely on in-depth technical analysis for their trading decisions. Additionally, DEGIRO does not offer a desktop platform, which might be a limitation for those who prefer a more robust trading environment.
The Mobile App offered by DEGIRO is similarly well-designed, providing users with access to their accounts and trading capabilities on the go. The app mirrors the functionality of the web platform, allowing users to execute trades, monitor their portfolios, and access market data from their smartphones or tablets. The mobile app has received positive reviews for its ease of use and reliability, making it a good option for investors who need to manage their portfolios while away from their computers.
Range of Assets
One of DEGIRO’s key strengths lies in its broad range of assets, which caters to a wide variety of investors. DEGIRO offers access to more than 50 exchanges in over 30 countries, providing ample opportunities to diversify portfolios across different markets. Investors can trade a vast array of financial instruments, including stocks, ETFs, bonds, options, futures, and mutual funds.
Stocks and ETFs form the core of DEGIRO’s asset offerings, with access to major exchanges such as the NYSE, NASDAQ, Euronext, and the London Stock Exchange, among others. This gives investors the ability to trade popular global stocks and ETFs at competitive prices. DEGIRO also offers access to less common exchanges, such as those in Singapore, Japan, and Australia, allowing for a truly global investment strategy.
For those interested in bonds, DEGIRO provides access to government and corporate bonds, although the selection may not be as extensive as some dedicated bond trading platforms. However, it remains a viable option for investors looking to add fixed-income securities to their portfolios.
Options and futures trading is also available on DEGIRO, with access to options markets in Europe and the United States. This feature is particularly attractive to more advanced traders who wish to engage in derivatives trading. Additionally, DEGIRO offers mutual funds, although the selection is somewhat limited compared to other asset classes.
While DEGIRO covers a broad range of assets, it’s important to note that the broker does not offer direct access to forex trading, cryptocurrencies, or CFDs (Contracts for Difference). This could be a drawback for traders specifically interested in these markets. However, the wide variety of other asset classes more than compensates for this limitation for many investors.
Fees and Commissions
DEGIRO is widely recognized for its low-cost fee structure, which has been a significant factor in its growing popularity across Europe. The broker’s fees are often lower than those of traditional banks and other online brokers, making it an attractive option for cost-conscious investors.
When it comes to trading stocks and ETFs, DEGIRO offers some of the lowest fees in the industry. For example, trading U.S. stocks incurs a flat fee of €0.50 plus a small percentage of the transaction value (typically 0.004%). European stock trading fees vary by country, but they generally remain competitive, often costing between €2 to €4 per trade. Additionally, DEGIRO has a list of commission-free ETFs that users can trade once per month without incurring any fees, provided they meet specific conditions.
DEGIRO’s bond trading fees are also competitive, with costs typically ranging from €2 to €5 per transaction, depending on the exchange. For options and futures trading, DEGIRO charges a fee per contract, which varies by market but remains on the lower end compared to industry standards.
One of DEGIRO’s standout features is the absence of inactivity fees, a common charge among other brokers that penalizes users for not trading frequently. DEGIRO also does not charge for deposits or withdrawals, further reducing the overall cost of trading on the platform.
However, it’s worth noting that DEGIRO does impose a small fee for currency conversion when trading assets in a currency different from your base account currency. Additionally, there is a connectivity fee for accessing certain exchanges, which can be a minor drawback for traders who frequently trade on multiple international exchanges.
Customer Support
Customer support is a critical aspect of any brokerage service, and DEGIRO provides a decent level of support to its users. The broker offers customer service via phone and email, with support available during regular business hours on weekdays. While DEGIRO’s customer service is generally responsive, the lack of 24/7 support could be a limitation for traders who may require assistance outside of standard working hours.
DEGIRO’s website features an extensive FAQ section that covers a wide range of topics, from account setup and trading fees to platform functionality. This resource can be particularly helpful for resolving common issues without needing to contact customer support directly.
User feedback on DEGIRO’s customer service is generally positive, although some users have reported delays in response times, particularly during periods of high market volatility. Overall, while DEGIRO’s customer support may not be the most robust in the industry, it is sufficient for most users’ needs.
Educational Resources
DEGIRO offers a modest selection of educational resources aimed at helping traders enhance their knowledge and skills. The broker provides a series of guides and tutorials on its website, covering various topics such as how to use the trading platform, understanding different asset classes, and basic investment strategies. These resources are particularly useful for beginners who are still familiarizing themselves with the world of trading.
In addition to written guides, DEGIRO also offers a blog that provides market analysis and updates on current economic trends. While the content is informative, it is somewhat limited compared to the extensive educational offerings found on some other platforms. DEGIRO does not currently offer webinars, video tutorials, or interactive learning tools, which could be a drawback for users seeking more comprehensive educational resources.
Despite these limitations, DEGIRO’s educational materials are well-suited for new investors looking to get started, although more advanced traders may need to seek additional resources elsewhere to deepen their knowledge.
Security and Safety
When it comes to the security and safety of client funds, DEGIRO takes several measures to ensure a high level of protection. One of the main aspects of DEGIRO’s security framework is that it operates under the regulatory oversight of the Netherlands Authority for the Financial Markets (AFM) and is also registered with the Financial Conduct Authority (FCA) in the UK. These regulatory bodies require DEGIRO to adhere to stringent financial standards, ensuring that the broker operates in a transparent and responsible manner.
DEGIRO employs a policy of segregating client funds from its own assets, which means that in the unlikely event of the broker’s insolvency, clients’ funds are protected. This is a crucial security feature that gives traders peace of mind. Additionally, DEGIRO uses third-party custodians to hold clients’ securities, further separating them from the broker’s operational accounts. This practice adds another layer of protection against potential financial mishaps.
In terms of data security, DEGIRO implements industry-standard encryption protocols to protect user data during transactions. This is coupled with two-factor authentication (2FA), which adds an extra layer of security for account access. Although DEGIRO does not provide negative balance protection, meaning that in extreme market conditions clients could lose more than their initial deposit, this is not uncommon in the industry, and clients are advised to manage their risks carefully.
Overall, DEGIRO is considered a safe and reliable platform for trading, particularly because of its adherence to European regulatory standards and its robust system for safeguarding client assets.
User Reviews and Testimonials
User reviews and testimonials provide valuable insights into the real-world experience of using DEGIRO. Generally, DEGIRO receives positive feedback for its low-cost structure, with many users highlighting the platform’s competitive pricing as one of its main advantages. For retail investors who prioritize cost-efficiency, DEGIRO’s low fees and absence of inactivity charges are major draws.
However, user feedback also reveals some areas where DEGIRO could improve. One of the most common criticisms is related to the platform’s customer service. Users have reported long response times and a lack of immediate support channels like live chat. While DEGIRO does offer email support and a comprehensive FAQ section, the absence of quick, responsive customer service can be a drawback, especially for users who require immediate assistance during trading hours.
In terms of platform usability, reviews are mixed. Some users appreciate the simplicity and straightforwardness of DEGIRO’s web-based platform and mobile app, which provide the essential tools for trading without overwhelming users with too many features. However, more advanced traders might find the platform’s lack of sophisticated charting tools and advanced trading features limiting.
Moreover, user testimonials often praise DEGIRO’s access to a wide range of global markets. DEGIRO allows trading across different asset classes, including stocks, bonds, ETFs, and futures, on numerous exchanges worldwide. This level of access is especially appreciated by European investors looking to diversify their portfolios across various regions and markets.
Pros and Cons
As with any brokerage platform, DEGIRO has its strengths and weaknesses, which potential users should consider.
Pros:
- Low-Cost Trading: One of DEGIRO’s standout features is its low-cost trading structure. With some of the lowest fees in the industry, DEGIRO is particularly attractive to cost-conscious investors. The absence of inactivity fees and minimal transaction costs make it an appealing choice for frequent traders as well as those with smaller portfolios.
- Wide Market Access: DEGIRO offers access to a broad range of markets across the globe. From European exchanges to North American and Asian markets, the platform allows users to trade a diverse range of assets, including stocks, bonds, ETFs, options, and futures. This extensive market access is a significant advantage for those looking to build a diversified portfolio.
- Regulatory Oversight: Operating under the supervision of European regulatory bodies such as the AFM and FCA, DEGIRO provides a level of security and trust that is crucial for traders. The segregation of client funds and securities under third-party custodianship further enhances its reliability.
- User-Friendly Platform: DEGIRO’s platform is designed with simplicity in mind, making it accessible to both novice and experienced traders. The clean interface and easy navigation allow users to execute trades without unnecessary complications.
Cons:
- Customer Service: A notable drawback of DEGIRO is its customer service. Many users have reported delays in response times and limited access to immediate support, which can be frustrating for traders who need quick resolutions to their issues.
- Limited Advanced Tools: While DEGIRO’s platform is user-friendly, it may lack some of the advanced features that more experienced traders require. The absence of detailed charting tools, technical indicators, and advanced order types may be a limitation for those who engage in more complex trading strategies.
- No Negative Balance Protection: Unlike some other brokers, DEGIRO does not offer negative balance protection. This means that in volatile market conditions, traders could potentially lose more than their initial investment, which adds an element of risk.
- Currency Conversion Fees: For users trading in foreign markets, DEGIRO charges currency conversion fees. Although this is a common practice among brokers, it’s something to be aware of if you frequently trade in non-local currencies.
Conclusion
In conclusion, DEGIRO is a strong contender in the online brokerage space, particularly for European investors seeking low-cost access to a wide range of financial markets. While it excels in offering competitive fees and a user-friendly platform, it may not be the best choice for traders who require advanced tools and features. Nonetheless, with its solid regulatory framework and various account types catering to different investor needs, DEGIRO remains a compelling option for both novice and experienced investors alike.