DEGIRO Review 2024: Pros and Cons
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It is time for a complete review of DEGIRO. I will discuss its advantages and disadvantages.
DEGIRO is a great European broker with low fees. I have used their broker account for two years. And I want to bring you my unbiased review of this broker.
We will see the different account types and the details of DEGIRO fees. I will also go over the broker’s fees and limits. Finally, we will discuss the pros and cons of this service.
So, should you use DEGIRO?
And remember: Investing involves the risk of loss. Always do your research before you invest and know why you invest and what you invest in.
| Custody Fees | 0% per year |
|---|---|
| Inactivity Fees | 0 CHF |
| Buy Swiss ETF | 3 EUR |
| Buy American Stock | 2 EUR |
| Currency Exchange Fee | 0.25% |
| Languages | English, French, German, and Italian |
| Mobile Application | Yes |
| Web Application | Yes |
| Custodian Bank | Flatex |
| Established | 2008 |
| Headquarters | Netherlands |
What is DEGIRO?
Before the review, what is DEGIRO?
DEGIRO was founded in 2008, so it is a pretty mature broker. Their headquarters are in the Netherlands. It only opened to the public in 2013 in the Netherlands. They started support for Switzerland in 2016. But they are now available in 18 different European countries.
Since its inception in 2008, DEGIRO has grown very fast. DEGIRO develops all its tools in-house, and it now employs more than 200 people.
DEGIRO bases its business on four primary values:
- Access to exchanges of the entire world
- Low Fees
- In-house development of their tools
- Regulated Activities
Over time, they have been working on improving these four pillars. As a result, they are now one of the most popular brokers in Europe.
DEGIRO now has more than 2.5 million customers (in 2023). This number is an impressive result. They have doubled their customer base in less than two years. In 2020, they managed more than 24 million transactions. They are in excellent financial health.
What can you invest in?
When you choose a broker, it must give you access to all the investing instruments you need. For example, if you are a passive investor, you may only need access to Exchange Traded Funds (ETFs). But if you are a more sophisticated trader, you may want access to futures and other advanced instruments.
DEGIRO gives you access to a vast array of investing instruments.
First, you can invest in shares in 30 stock exchanges: 22 stock exchanges in Europe, four in North America, and four in Asia and Oceania. They have access to the most important stock exchanges in the world.
The choice for bonds is slightly more limited. You can trade bonds from the most prominent European stock exchanges, which are 6 European stock Exchanges.
You can trade Exchange Traded Funds (ETFs) in 19 different stock exchanges: 17 in Europe and 2 in Asia and Oceania. DEGIRO should give you access to the essential European ETFs.
Finally, you also have access to advanced instruments. You can trade futures in 14 different exchanges. And you can also trade options in 12 different stock exchanges.
Overall, DEGIRO offers access to an extensive range of investment products. This offer should satisfy every European Investor. For me, this is more than enough products for investors.
DEGIRO Account Types
DEGIRO has several account types: Basic, Active, Trader, and Day Trader.
We start with the Basic account. It is the default account and the most versatile. You have access to every feature except leverage, and there are no extra fees or limitations compared to the other accounts.
Active, Trade, and Day Trade account types are similar to Basic, except you can access leverage. The leverage limitations are different for each account. The Basic account is more useful for most investors than the other three.
If you want all the details about the different DEGIRO Account Types, you should read their Profiles document. It contains all the information about the different account types. However, it is not very easy to understand.
Securities Lending with DEGIRO
One thing that is important to know is that with these accounts, DEGIRO can lend your shares to other investors.
When some investors are selling short, they sell shares they do not yet have. Therefore, somebody needs to lend shares. In this case (and a few others), DEGIRO will lend your shares to the other investor.
DEGIRO will guarantee the lending with collateral equal to 104% of the value of the shares. The short seller will also need to meet margin requirements. However, there is minimal risk with this.
In the past, people uncomfortable with DEGIRO lending their shares could opt for the Custody account instead. The custody account meant more fees but not share lending. Unfortunately, DEGIRO removed the custody account in 2022.
I do not think there is considerable risk with securities lending. Your shares are not held directly by DEGIRO but by SPV, a separate legal entity. So if DEGIRO shuts down unexpectedly, you can still arrange to get back your shares from SPV. If nobody borrowed your shares, there will not be any issues, regardless of your account type. If somebody borrowed your shares, you still have a right to them, and the borrower still has to give them back.
The collateral should cover your losses if the borrower cannot return the shares. If the borrower defaults at the same time as DEGIRO, then you will be in trouble. But this should be an infrequent event.
DEGIRO Fees
If we talk about DEGIRO, we need to talk about fees. They have been getting a lot of clients because of their very low fees. Starting in May 2023, fees have changed. I have already updated the article to use the new fees.
DEGIRO fees are different from country to country. However, they are not very significant differences. As an example, I will take the fees for Swiss investors.
Contrary to most other brokers, the prices for ETFs differ from those for stocks. So, we will look at them separately. Also, DEGIRO makes a difference between the fee they charge and the fee of the external party (the stock exchange). So, I will show them separately, but the total is what matters to investors.
We should start with stocks. The price you will pay for stocks will depend on the exchange you are using. Here are some examples:
- Switzerland: 5 CHF + 1 CHF
- United States: 1 EUR + 1 EUR
- France, Germany, Italy: 3.9 EUR + 1 EUR
- Hong Kong: 5 EUR + 1 EUR
All these prices are low. But if you are a passive investor like me, you are probably more interested in Exchange Traded Funds (ETFs). So, we also look at the price to trade ETF:
- Worldwide: 2 EUR + 1 EUR
Overall, the prices are good. But I wish they would clarify them, not trying to hide the extra 1 EUR service fee on each transaction.
And there is something even better with DEGIRO: You can trade some ETFs with lower transaction costs! Every month, you can make one trade (buy or sell) for one of the Core ETFs. If you make another trade in the same direction for the same ETF during the same month, it will also be free. You will significantly reduce your fees if your portfolio is mostly in free ETFs.
It is essential to remember that only the transaction costs are waived on the Core ETFs. The service fee still applies. So, Core ETFs are not free. They cost 1 EUR instead of 3 EUR.
If you buy an ETF (or a stock) that is not in your account currency, you will pay fees on the currency exchange. By default (Auto FX Trader), you will pay 0.25% of the transaction value. You can also opt for manual exchanges. In that case, you will pay 10 EUR + 0.25%. For most investors, there is no point in making manual trades with DEGIRO. So, the manual fee is what matters.
These foreign currency fees are not particularly cheap. However, they are already twice cheaper as the cheapest Swiss broker. Remember that this fee is due in both directions (buy and sell).
The final fee is a connectivity fee for each stock exchange you use. This fee is 2.5 EUR per year per stock exchange. The stock exchange for your home country will be free (SIX for Swiss investors).
Overall, DEGIRO fees are low. You will not find another European broker with such low prices!
On the other hand, there are three things I do not like about their fees. First, the currency exchange fee is too high. As soon as you start making large trades, it will be significantly higher than the transaction fees.
The other thing I do not like about these fees is their prices differ from country to country. I wish they would unify their pricing system.
If you want more details, you can consult DEGIRO Fees for Switzerland.
Is DEGIRO technically secure?
You want your broker account to be technically secure. I have not heard of any security breach at DEGIRO. It is a good sign because there have been many breaches of many online services over the years.
The other thing you want is Two Factor Authentication (2FA). It is imperative to secure your account. And DEGIRO offers it. So, from a technical security point of view, everything is in order.
What if DEGIRO went bankrupt?
You also want to protect your assets from the broker itself. If DEGIRO goes bankrupt, you want to keep access to your shares. None of your shares are held directly by DEGIRO. They are all held by a separate legal entity (SPV). It means there is complete asset segregation. And this is a great thing.
If DEGIRO goes bankrupt, your assets are safe inside SPV. If something bad happens with segregation, you will get 20’000 EUR protection through the German Investor Compensation Scheme.
Your cash is stored in a separate bank account, so it should also be safe. In case of bankruptcy, you get a protection of 100’000 EUR.
I mentioned securities lending before. Securities lending on DEGIRO will only incur a real risk if both DEGIRO and the borrower go bankrupt simultaneously. It is an improbable event. But there is still this risk that you may want to take into account.
DEGIRO Reputation
A broker’s reputation is essential. You do not want to store your hard-earned money with an untrustworthy broker.
DEGIRO has won many awards since its creation. At the time of this writing, they have won more than 90 international awards.
The press is generally praising them as a great broker in Europe. They have received many positive reviews from the media.
But what do the users say about DEGIRO? It is often more important than the press. On TrustPilot, there are more than 2000 reviews about DEGIRO. Out of these reviews, DEGIRO got a 4.19 score out of five 5. It is a great score.
When we read the positive comments, we see that people like the platform’s low fees and simplicity. They also mention that the platform improves very quickly.
On the other hand, there are also some negative comments. 26% of the comments give a score of 1 out of 5. Here are some of the complaints of the users:
- Poor customer service. This one comes up a lot in the negative comments.
- Slow bank transfers to and from DEGIRO.
- Low amount of research available on stocks.
- People are losing access to their accounts while moving to another country.
You have to take some of the comments with a grain of salt. Indeed a lot of people do not even read the fees before trading. Then they are surprised by a charge they did not know about. Do not make the same mistake! You always need to do your research.
I never had any issues with customer service. It is pretty fast in Switzerland, both by email and by phone. But I did not have to use it a lot. And I would not be surprised if it was not good in Europe. Companies that are growing very fast often cannot keep up with customer service.
As for the bank transfers, I would have to agree on that one. It is pretty slow. But since I do a transfer once a month, I do not care about that.
And for research, I never needed any research since I do my research myself. And you do not need fundamentals for an ETF anyway.
Finally, for people losing their accounts, this is due to regulations. They need to be regulated to avoid trouble. They probably could handle it better, indeed. But they have to do it.
It still concerns me a little to have 21% of Bad reviews. However, most are on customer service, and some are from people who do not research. So, I do not think it is a blocker. Also, the average score is quite good!
My experience with DEGIRO
It is time to talk about my own experience with DEGIRO. I have used them for almost two years.
Overall, I am satisfied with my usage of DEGIRO. It is very straightforward to use. When I started using this broker, I was a total beginner in investing. I feel like DEGIRO is a good broker for beginners. They are straightforward to use, and their fees are entirely acceptable.
On the other hand, changing bank accounts is way too complicated. I do not understand the limitation of only accepting one bank account, but changing bank accounts should be at least faster. When I changed bank accounts, I had to contact support, transfer money from my new account, and wait for them to acknowledge it. It took more than a week to change my bank account. It is too long.
Finally, the last issue I have with DEGIRO is their handling of the United States Exchange Traded Funds. In early 2019, DEGIRO stopped offering access to ETFs from the United States. That was because some new regulations (FinIA/FinSA) would only let Swiss investors invest in certain funds. However, these regulations should not have applied to DEGIRO since it’s a foreign broker. So, they actually applied unnecessary regulations to their Swiss customers.
Indeed, in 2019, Swiss investors still had access to these funds. My biggest issue is that they did it without any communication. One day, I could not purchase more of my ETFs, and I had to contact support to understand why. They should have emailed every Swiss investor to let them know about that.
The lack of US ETFs is the main reason I switched to Interactive Brokers (more info on my review of IB).
We can also look at my experience with the different process steps: account creation, web application, and mobile application.
Account Creation
Creating an account at DEGIRO is a straightforward process.
You have to go to the website, click on Open An Account, and they will guide you through the process. You will need to scan your ID to prove your residency. It is also when you will have to choose your account type. Selecting an account type is crucial since you cannot change it later.
Once you have filled in all the necessary information, you must transfer some money to your account. DEGIRO will only activate your account once the money is there. You can use an instant deposit for free during the activation. Like this, you can create an account in a few minutes.
Creating an account on DEGIRO is simple. I do not think it could be any simpler. I dislike only one thing: you cannot change the account type.
If you want even more information, I have an article on how to create a DEGIRO account.
Trade with DEGIRO web Application
I like the fact that DEGIRO also has a web application. I am old-school and prefer web applications.
The web application is straightforward to use. It is not the prettiest thing in the world, though. Several of the reports are simplistic. It would need some polishing, but it gets the job done.
From the web application, you can do everything:
- Buy and sell shares
- See your portfolio results
- See information about a stock or position
- See general information about the market
- Manage your account
The web application could give more information on the shares and the portfolio. Some better statistics and graphs on my returns would be great.
One thing I would like to see in the DEGIRO application is more transparency in fees. For instance, you cannot see how much you have paid for currency transaction fees. For each transaction, there should be a breakdown of all the fees incurred.
For more details, read my article on how to buy ETF with DEGIRO.
Trade with DEGIRO Mobile Application
DEGIRO also has a mobile application.
You can do most things from the mobile application. There are just a few things that you cannot do to manage your account. But overall, this should not block you.
The one thing that is done well on the mobile application is that it is easy to use. It is a great thing, especially for beginner investors.
However, the mobile application is not great. The views are not very well optimized and could show much more information. Some features are also a bit difficult to find out. For instance, you must touch the daily results to get the total results. It took me several months to find out (by mistake!).
I also feel like it is not well thought out together. Some of the views do not match other views. Keep in mind that I dislike mobile applications in general. So I may be biased. But this mobile application could profit from some extra work.
And the last thing I do not like about the mobile application is that a five-digit password can unlock it. For me, this is not enough! You should need a full password for this.
DEGIRO Pros
We can recap the main advantages of DEGIRO.
The first obvious advantage is the low fees. DEGIRO is one of the cheapest European brokers. It is an important fact. And this is what they are building for their entire business. You can save a lot of money by trading with them.
The fact that you can trade one ETF cheaper every month is also a great advantage of DEGIRO. If you take this into account when you build your portfolio, you can significantly reduce your overall fees.
A great thing about DEGIRO is that it is straightforward to use. I never had any issues trading on the web or mobile applications. It is essential if you are starting to invest. You do not want a significant barrier to invest in.
Another advantage is that they offer mobile and web interfaces. Nowadays, some brokers only offer one of these. I much prefer trading on my computer to on my phone, but it is great to be able to access my stocks from my phone as well.
DEGIRO is a fast-growing broker. It has been profitable for several quarters in a row. They are adding new clients very quickly to their platform. In 2019, they had more than 450’000 clients and processed more than 50 billion euros in transactions. They are still adding tools and new features to their platform. I think this is an excellent sign of a healthy broker.
DEGIRO Cons
We also need to list the main disadvantages of DEGIRO.
I am not a big fan that, by default, DEGIRO lends shares of their customer. I realize this is one of the ways they keep the fees very low. However, this should be an option for the customer, not the default option. The risks are not significant with this process. But there are still some risks. Therefore, it should not be the default option.
For me, the biggest con of DEGIRO is their lack of access to United States ETF. Since 2019, DEGIRO has stopped offering access to these ETFs because of the future laws preventing brokers from providing these products in Europe. Nevertheless, this limitation is only a disadvantage for Swiss investors, not European investors.
They also change their fees very often. Between 2021 and 2023, they added fees three times. And every time, it was for adding fees, never removing them. Several things used to be free but are not anymore.
Finally, DEGIRO should communicate better sometimes. When they stopped offering access to US ETF, they did not communicate. They stopped the ability to purchase them. Most investors had to find out for themselves why. It is stupid. The same thing happened when their bank in Switzerland had an issue for several days: there was no communication.
Alternatives
It is essential to compare DEGIRO with some alternatives.
DEGIRO vs Interactive Brokers
The broker you need to buy stocks and ETFs reliably and at extremely affordable prices. Trade U.S. stocks for as little as 0.5 USD!
- Extremely affordable
- Wide range of investing instruments
I am currently using Interactive Brokers as my main broker. So, we can compare DEGIRO and Interactive Brokers (IB).
From a features point of view, they both have more than enough features to help you start investing in the stock market. They both give you access to many investing instruments.
Regarding usability, DEGIRO is slightly easier to use than IB. But once you are used to the few functions from IB that you need, it also becomes easy.
IB has a huge advantage for Swiss investors: IB gives you access to US ETFs, the most efficient ETFs available. DEGIRO stopped offering this access a while ago. It does not make much difference for European investors since they cannot legally access these ETFs.
Both are very affordable in terms of fees. The main difference is in currency conversion fees. If you need to convert a significant amount of currency, IB will be significantly cheaper than DEGIRO.
IB leads the way for safety and security by providing up to 500’000 USD in protection against 20’000 EUR for DEGIRO. Also, DEGIRO will lend your shares by default, and IB will not. Finally, I find IB more professional than DEGIRO in their execution of trades.
Overall, Interactive Brokers is better than DEGIRO, especially for Swiss investors. The difference is slight for European investors, who may appreciate that DEGIRO comes from the EU while IB comes from the US.
DEGIRO vs Swissquote
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- Swiss broker
- Easy to use
Many Swiss investors prefer using a Swiss broker rather than a foreign broker. A Swiss broker presents the advantage of keeping the money in Switzerland and making it easier to work through regulations if something goes wrong.
In that case, we should briefly compare DEGIRO and Swissquote.
Swissquote is the most famous Swiss broker, which presents a significant advantage for many Swiss investors.
On the other hand, Swissquote will be significantly more expensive than DEGIRO. The transaction fees are considerably higher, and you must pay the Swiss stamp duty.
Both brokers have all the necessary features for most investors, and they both have different trading apps.
One other advantage of Swissquote is that it has higher regulations. It also has a better reputation and is more professional in its execution.
Overall, both brokers are pretty good. If you prefer a Swiss broker, go with Swissquote. If you do not mind a foreign broker, choose DEGIRO or Swissquote.
FAQ
Is DEGIRO good for beginners?
Yes, it is a good broker for beginners. It has low fees, and it is straightforward to use. It also offers a wide range of investments, more than enough for beginners.
Is DEGIRO safe for your shares?
Yes. DEGIRO has a robust security model. Assets are held by a secondary legal entity (SPV). And lending of securities is always guaranteed by collateral.
Is DEGIRO good for European investors?
Yes, DEGIRO is a good broker for European Investors. It offers access to a wide range of investments for very low prices.
What happens if DEGIRO goes bankrupt?
Since a separate legal entity holds your assets, you should still be entitled to your assets. You will be able to transfer them to another broker.
Who is DEGIRO good for?
DEGIRO is a good broker for European investors that will trade mostly in EUR in European ETFs.
Who is DEGIRO not good for?
DEGIRO is not good for Swiss investors since they would pay high currency conversion fees and would not have access to US ETFs.
Summary
DEGIRO is a good broker from the Netherlands. It offers a vast range of investments at an affordable price.
Product Brand: DEGIRO
4
DEGIRO Pros
Let's summarize the main advantages of DEGIRO:
- Relatively low fees
- You can trade one ETF cheaper every month
- Straightforward to use
- Mobile and a web interface
DEGIRO Cons
Let's summarize the main disadvantages of DEGIRO:
- DEGIRO lends the shares of their customer
- Transparency is not optimal
- DEGIRO does not offer access to US ETFs
- DEGIRO has poor communication
- DEGIRO increases its fees regularly
Conclusion
DEGIRO is a a good broker with low fees. It provides several interfaces that are very easy to use. Because of that, I believe DEGIRO is among the best brokers for European Investors.
Of course, not everything is great. DEGIRO’s customer service is not always top-notch, and its communication is terrible. Also, their applications are not as good as they could be.
But, overall, I still believe that DEGIRO is a good broker for European investors.
For Swiss investors, DEGIRO is a good choice. However, it is not necessarily the ideal choice, in my opinion. Indeed, DEGIRO lacks access to US ETFs. But if you want to invest with a European broker, DEGIRO is a great choice. If you want to use other ETFs, I recommend going with Interactive Brokers.
Have you ever used DEGIRO? What did you think of it?
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Hello! Thank you so much for this. I’ve opened a Degiro Switzerland account in August and started trading with ETF and options on swiss shares. I was astonished about the easy to use the platform and the very low cost compared to Swissquote and PostFinance.
Now I do have a question to you, asking for advice because since August, the cash of the account was in Fonds Monetaires (monetary funds), a solution I have read about and has my trust. Since beginning September, Degiro asks me at every log-on to fill-out a form and open cash account with them at flatexDEGIRO bank.
I hence should agree to shut down the monetary fund and have my cash managed on with these accounts (I could have 1 for each currency in my portfolio).
What do you advice, is this a trustworthy solution to sign for that solution?
Hi Laurent,
Thanks for your feedback on DEGIRO!
I believe it’s trustworthy and was expected. Before, DEGIRO was not a bank, so it could not hold cash. Therefore, all the cash was held in money-market funds instead. Now, DEGIRO has been bought by FLATEX which has a bank license. So, they can now store cash with them via the Flatex Bank.
Thank you for the feedback
Kind regards
Laurent
Thank you so much for this. I have been wanting to start investing in stocks and ETFs since ages and seriously considering it and gathering information since a year but until now I haven’t started. I know this will be one of my biggest regrets: not starting investing early enough.
But now I am really serious to start opening DeGiro account and of course the universe is against me. I just lost my wallet with my Swiss residence permit in it in Italy last week. So my questions are:
1. Can I open DeGiro account in Switzerland without a valid Swiss residence permit or should I wait until I get the new one (which can take weeks or a month)?
2. I am a Dutch citizen living in Switzerland, can I open a Dutch DeGiro account instead of a Swiss one?
Thanks!
Hi MH,
1) I don’t remember exactly which documents are necessary, but I would be surprised if you can open it without a residency permit. Maybe with a driving license, but not sure.
2) You may be able, but it depends if they take non-residents. The issue would be that you won’t be a CHF account to send money to and that will make it difficult.
In your case, I would wait until your get the card back or try it now regardless and see whether you can move forward or not.
Mr. Poor Swiss, first of all thank you for the blog, it’s a great thing you are doing raising the awareness around this topic and de-mystifying it for regular folks like myself.
I need to bother you with a question. I’m trying to use Degiro to buy the SIX CHF listing of an ETF (UBS MSCI World Socially Responsible) however I cannot seem to find in the Products list or by searching. I find only the XETRA EUR listing.
Total noob situation here I know, and I am wondering if this is a common situation, i.e. low fee brokers (Degiro in particular) not having all the products of an exchange available to trade?
I was set on buying the CHF listing for long term keep, now I’m wondering if I should just buy the EUR listing (currency conversion fees be damned) and what will the long term impact might be.
I also wrote Degiro customer support, but haven’t heard back yet.
Anyway, thanks again, all the best!
Bogdan
Hi Bogdan,
In theory, DEGIRO should have all the ETFs of SIX. But it’s sometimes difficult to search for ETF because they have different names on different exchanges and the tickers are different.
Have you tried searching by ISIN?
I would personally buy it in USD on SIX since this is the currency of the fund, even though at DEGIRO this may be more expensive because of currency exchange fees.
Note that I have not used DEGIRO in a while now and things may have changed in the meantime.
“Manual exchanges are only worth it for very large transactions (more than 12’500 EUR)”
OR when you do multiple trades…
I live in Germany and traded Tresla in USD on Nasdaq with DeGiro. First thing I did (after realizing that the costs are huge otherwise) was change all my currency to USD from EUR.
I am not sure I understand. If you do multiple trades with manual exchanges, won’t you pay 10 EUR for each transaction and it will still 12’500 EUR for each transaction to be interesting.
Hi, thanks for this! I am a beginning to invest for the first time and also saw a new trading platform Flow Bank has started recently based in Geneva. Could you do a comparison between Flow and DEGIRO please? Thanks
Hi Minx,
I have done a review of Flow Bank.
There is one major problem with FlowBank, their custody fees have no maximum. So, it’s like adding 0.1% TER on an ETF. As long as they have this fee, they will not be interesting.
Hi, i did 30minutes of reading through article and comments, only to understand that i wasted time, because information presented here is obsolete. Am i right? DeGiro is on the verge of losing that little credibility, eToro is not at best when it comes to exchange costs, IB is expensive if one is small investor.. what is left for us? Do not say LLC, please ;)
Poor expat,
I am sorry you feel that way. What information is obsolete? I do not think anything changed, no. And this article has nothing to do with IB or eToro. But IB is definitely not expensive even for small investors.
Small addition, forgot to mention:
1. They also asked me for a document that i couldn’t figure out what it was. I called and asked. The person on the phone couldn’t say. He even went to his supervisor and they still couldn’t figure it out. Can you imagine?
They also promised to call and explain. And they never did. My further request, they ignored as well.
It became clear to me what they aim for. It was never about the proof.
2. And if it was ever about the proof. The only plausible reason I was on the list is because of Swiss residence. This is derived from that document they sent me. There is no other explanation available. Therefore I warned that Swiss customer could be by default on that list and then they go all the way to almost ask you who you sleep with, until you tell them where to go…
Hi RI,
Thanks for sharing more information about your case!
This is indeed very concerning! I am sorry that you had to go through that.
I hope they will improve that, or else investors are going to be in trouble.
Thanks for sharing!
Degiro is a fraud. They started cleaning up their database from “passive” customers by demanding all sorts of private documents that go far beyond the usual financial audit and giving the deadlines that are very tight. Even for customers who used their platform for 5 years, while they made a lot of money on all the fees.
Furthermore when asked to transfer my portfolio to another broker account, since their demands were simply ridiculous, they asked for several hundreds of Euros for that service. And even then, they didn’t transfer it. Instead the liquidated all my positions even though some the positions were negative and I explicitly warned them to avoid this from happening.
This can happen to you as well at any moment.
They also have one of the worst customer service I ever experienced and the worst data privacy standards. I am not even sure they are within the legal boundaries.
I will start a lawsuit against them as well as write complaint to all European financial regulators.
And last but not least, to all Swiss customers I would like to warn additionally. You are in the “high risk” group by default. Stay away from these “cheap” prices. In the end you will pay a higher price.
Hi RI,
Sorry to hear about your experience with DEGIRO.
Do you mind sharing what kind of documents they are asking?
Thanks for stopping by!
Sure.
First they asked me for income and wealth statement. I provided those.
Then they asked for a complete tax declaration. Which was kind of strange, as all other data there is just personal data and has no concern to some broker.
I asked them for the reason and or the law based on which they request such information. They forwarded a huge document, where all kinds of documents related to income and wealth statement were mentioned, but even there, there was no mention of tax declaration, even for high risk profiles.
I also asked why am I a high risk, oll of a sudden after 5 years? They never replied to any of my requests. Instead they started threatening to sell all my portfolio and gave a few das to deliver. Which is ridiculous and perhaps not even legal (I am checking that).
In that case I asked to transfer my account to another broker. They never did, and in fact terminated my account and sold all positions even earlier than the declared deadline and collected all strange fees I never agreed to.
I still can’t believe this kind of expropriation exists in the “developed world”.
Hi, great review. I am a DeGiro customer from Italy and I am generally happy with it, but I agree with your pros and cons. Let me add a few considerations.
1. I gather that all brokers including Interactive Brokers stopped selling US ETFs due to EU regulations requiring that a Key Information Document (KID) is provided to European customers. I don’t how the rule applies to Swiss customers though.
2. Interactive Brokers is an excellent broker, according to what I read, but it has some special rules such as a minimum deposit and the inactivity fee etc., so it’s good for many but not for everybody. Besides IBKR doesn’t provide a report that we, in Italy, can use directly for the annual tax declaration, while DeGiro does provide the report for free (even though they are a bit late this year).
3. I gather you just cannot switch from an ordinary DeGiro account to the Custody type or viceversa, not even paying. You can open a second account though and move your assets there, either selling and buying again, or transferring the assets (in the latter case DeGiro applies a 7 euro transfer fee for each asset, I have been told by the customer service).
4. I agree with you that asset segregation is a good thing, but some users say they don’t feel comfortable with it because the SPV where assets are segregated is just another company owned by DeGiro as well, it’s not a bank. So, they say, that kind of segregation would not really help in case of illegal behavior, while the Dutch investor protection scheme only protects up to 20,000 euros. What do you think? I generally trust the Dutch regulators, but I an not entirely clear on the matter.
Regards
Hi Poor Italian ;)
1) Indeed, for EU residents, there are unfortunately no exceptions. For Swiss residents, it’s more complicated. We will probably lose this later, but for now, some brokers can still offer access to U.S. ETF, like Interactive Brokers.
2) There is no minimum deposit (there used to be, but it was lifted), but there is a custody/inactivity fee of 10$/month if you have less than 100k on your account. I agree that if you never plan to reach 100k, IB is not that great. But 10$ per month is not the end of the world either.
Is it complicated to fill your taxes in Italy?
3) Yes, it sucks that they do not let you switch for free. I got the same answer from their team.
4) That’s kind of true indeed. It would be significantly better if they used a custodian bank, but this is not something that is being done often with brokers. The segregation is indeed weaker in that we have to trust them that the segregation is effective. The guarantees are slightly better on IB, but they do not have segregation with a bank either. I would trust the regulators here, but I have more trust in IB than DEGIRO.
Thanks for stopping by!
As a true passive investor I’d like to invest AUTOMATICALLY. This means that I don’t have to transfer the funds manually every damn month for the next 40 years and waste precious time. So, does degiro offer automatic investments in an ETF once a month?
Keep up the good work.
Hi Newguy,
I am using passive investor as a term coining an investor investing in passive funds, not necessarily a person investing automatically.
If you want to be as passive as possible, you should opt for robo-advisor, not investing directly.
You cannot do that with DEGIRO.
Thanks for stopping by!
That’s a shame. My current broker in Italy offers automatic investments and it saves my a lot of time over the years.
I’m moving to Switzerland next month and I’m eager to find a broker in Switzerland that offers the same thing. There must be one??
Robo-advisor sounds sinister. What is it? I don’t need no advice from robots. I already have picked my single world etf to invest in monthly for a few decades. I only need an automatic plan sigh…
Doesn’t it save like 5-10 minutes a month? This does not seem like a deal-breaker.
If you already have an ETF, you do not want a Robo-advisor indeed. Then, you will have to keep looking. Maybe one of the Swiss brokers have this feature.
Ok, let’s ignore 10 minutes per month although every minute spent behind a computer is a precious time wasted, especially if you do this for 30-40 years!
The biggest problem is not the wasted time actually. Many books and passive investing gurus will tell you that the human mind is fickle. Meaning you can FORGET to invest every month. This is detrimental to your future gains if you skip months, isn’t it? Of course, you can set up a reminder on your calendar but this is not desired; we want as little annoying reminders and alarms as possible in our stressful lives, don’t you agree?
The other problem with fickle mind is that you need to be DISCIPLINED and strong-willed to be able to invest manually every month. Meaning you have to consciously set aside the money no matter what happens. But what if you car needs an unexpected service this month and it will cost a lot? Or your washing machine dies and you need to buy a new one? Or your child needs the money for a school trip. Or you saw a REALLY good deal on a brand spanking new 8K OLED TV just in time for the football world cup! Or that, or this. There are numerous “traps” lurking in our lives that will take the focus/money away from regular monthly investing. So due to various reasons and circumstances it can happen that you will not invest a single frank in months. A long term disaster! With an automatic investing plan you are guaranteed to invest the fixed amount of money every month no matter what happens. That’s because you can’t be bothered breaking the investing plan and setting it up again when you have the money. You will just clench the teeth and live through it.
Not being able to set up an automatic investment plan is a deal breaker for me indeed. I know this depends on individual character and you might not fall into this undisciplined and weak-minded group of people I’m talking about but the fact is MOST people are like that – undisciplined and weak. That’s why I believe the ability to invest automatically is an important factor that you need to consider when reviewing online brokers in the future.
Thank you and good luck!
Hi Newguy,
This is a good point. For most people, the benefit of not having the temptation to do something stupid is a very big advantage (much bigger than the 10 minutes).
In my case, I prefer making this a habit. But I consider myself to be very organized and disciplined. And this is not the case for everybody. And not everybody wants to be in control of their finances.
Regarding the traps you mention, you should have an emergency fund for some of them.
But I agree with your points. A lot of people would be much better off with having automated investments! If I find a broker that does that, I will mention in on the blog.
Thanks for stopping by!
Hi,
why don´t you stay with your Italian broker? Since everything is online, why changing?
Michala