(Disclosure: Some of the links below may be affiliate links)
It is time for a complete review of DEGIRO. I will go over all the advantages and disadvantages of DEGIRO.
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 detail of DEGIRO fees. I will also go over the fees of the broker as well as its limits. And we will end up with the pros and cons of this service.
So, let’s see whether you should use DEGIRO or not in 2022.
2022 Update: DEGIRO stopped offering the Custody account type.
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.
What is DEGIRO?
Before the review, let’s start with what DEGIRO is.
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 for 18 different European countries.
Since its inception in 2008, they have been growing very fast. DEGIRO develops all its tools in-house. And they are now employing 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 on these four pillars. As a result, they are now one of the most popular brokers in Europe.
DEGIRO now has more than 2 million customers (in 2022). This 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 very simple 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 Exchange in Europe, four in North America, and four in Asia and Oceania. They have access to the most important stock exchanges in the world.
For bonds, the choice is slightly more limited. You can trade in bonds from 6 European Stock Exchanges. These are the most prominent 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.
Let’s start with the Basic account. It is the default account and the most versatile. You have access to every feature except for leverage. And you have no extra fees or limitations compared to the other accounts.
Active, Trade, and Day Trade account types are very similar to Basic except that you have access to leverage. The leverage limitations are different for each account. For most investors, the Basic account is more useful than the other three here.
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 risk 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 are selling 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 of 104% of the value of the shares. Moreover, 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 shutdowns very unexpectedly, you can still arrange to get back your shares from SPV. If nobody borrowed your shares, there would 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.
If the borrower cannot give back the shares, the collateral should cover your losses. If the borrower defaults at the same time as DEGIRO, then you will be in trouble. But this should be an infrequent event.
Money Market Funds risk with DEGIRO
Another risk specific to DEGIRO is related to the way they store cash. Indeed, DEGIRO is not a bank. So, they cannot store cash. Therefore, they use money market funds to store your cash.
However, money market funds can move up or down based on the foreign currency market. So, in theory, you could lose money with this scheme. However, DEGIRO guarantees a loss of up to 3000 CHF. So, if you are not storing much cash in your DEGIRO cash account, you should never lose money for this.
Nevertheless, it is important to know that DEGIRO is not a good place to store large amounts of currencies.
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.
As an example, I will take the fees for Swiss investors. DEGIRO fees are different from country to country. However, they are not very significant differences.
Contrary to most other brokers, the prices for ETFs are different than the prices 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 for investors, the total is what matters.
Let’s 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: Free + 1 EUR
- France, Germany, Italy: 3.9 EUR + 1 EUR
- Hong Kong: 5 EUR + 1 EUR
All these prices are very low. But if you are a passive investor like me, you are probably more interested in Exchange Traded Funds (ETFs). So, let’s look at the price to trade ETF:
- Worldwide: 2 EUR + 1 EUR
- TradeGate: 3.9 EUR + 1 EUR
Overall, the prices are good. But I think it is bad that DEGIRO advertises free trading in US stocks, but they still have a 1 EUR trading fee. So, it is not free!
And there is something even better with DEGIRO: You can trade some ETFs without 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. If your portfolio is mostly in free ETFs, you will significantly reduce your fees.
It is important to keep in mind that only the transaction costs are waived on the Core ETFs. Other fees still apply.
If you buy an ETF (or a stock) 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 you will pay this fee in both directions (buy and sell).
The final fee you will pay 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 very low. You will not find another European broker with such low prices!
On the other hand, there are two 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 the fact that their prices are not the same from country to county. 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 bankrupts?
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.
Your cash is also not kept by DEGIRO but invested in money market funds. And the money in these money market funds is also kept separate from the fund provider.
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.
The reputation of a broker 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 63 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 3.6 score out of five 5. It is a good score but could be improved.
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 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 need to do your research, always.
I never had any issue 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 can often not keep up with customer service.
As for the bank transfers, I would have to agree on that one. It is quite slow. But since I do a transfer 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.
And finally, for people losing their accounts, this is due to regulations. They need to keep regulated to avoid trouble. They probably could handle it better indeed. But they have to do it.
For me, it still concerns me to have 26% of Bad reviews. However, most of them are on customer service, and some are from people who do not do any research themselves. So, I do not think it is a blocker. But there are brokers with a better reputation than DEGIRO out there.
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 very easy to use, and their fees are entirely acceptable.
On the other hand, it is way too complicated to change bank accounts. I do not understand the protection in 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 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 United States Exchange Traded Funds. In early 2019, DEGIRO stopped offering access to ETFs from the U.S. That was because some new regulations (FinIA/FinSA) would only let Swiss investors invest in certain funds.
However, in 2019, Swiss investors still had access to these funds. But DEGIRO did it earlier than the law required. And 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 the support to understand why. They should have emailed every Swiss investor to let them know about that.
The lack of U.S. ETFs is the only 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, using the web application, and using the mobile application.
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. Choosing an account type is an important step since you cannot change it later.
Once you have filled in all the necessary information, you will have to 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. There is only one thing that I dislike about this: 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. And several of the reports are simplistic. Overall, I think it would need some polishing, but it gets the jobs 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 for 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 they could show much more information. Some features are also a bit difficult to find out. For instance, to get the total results, you have to touch the daily results. It took me several months to find out, by mistake.
I also feel like it is not well thought together. Like some of the views do not match other views. Keep in mind that I dislike mobile applications to start. 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.
We can recap the main advantages of DEGIRO.
The first obvious advantage is the low fees. DEGIRO is the cheapest European broker. 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.
And the fact that you can trade one ETF for free every month is also a great thing in favor 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 issue trading on either the web application or the mobile application. It is important if you are starting investing. You do not want a significant barrier to invest in.
Another good advantage is that they offer both a mobile and a web interface. Nowadays, some brokers only offer one of these. I much prefer trading on my computer than 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 they 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.
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.
Another issue is the lack of transparency. They advertise that they have free US stock trading, but there is always a footnote saying they have a 1 EUR handling fee for each transaction. They should simply advertise for low fees rather than free with a footnote.
For me, the biggest con of DEGIRO is their lack of access to United States ETF. Since 2019, DEGIRO stopped offering access to these ETFs because of the future laws preventing brokers from offering these products in Europe. This is only a disadvantage for Swiss investors, not European investors.
Finally, DEGIRO should communicate better sometimes. When they stopped offering access to U.S. ETF, they did not communicate. They stopped the ability to purchase them. Most investors had to find out for themselves why. It is stupid. And the same thing happened when their bank in Switzerland had an issue for several days: no communication.
It is important to compare DEGIRO with some alternatives.
DEGIRO vs Interactive Brokers
I am currently using Interactive Brokers as my main broker. So, we can compare DEGIRO and Interactive Brokers (IB).
From the features point of view, they both have more than enough features to start investing in the stock market. They both give you access to many investing instruments.
As far as usability goes, DEGIRO is slightly easier to use than IB. But once you are used to the few functions from IB that you actually need, it becomes easy as well.
For Swiss investors, IB has a huge advantage: IB gives you access to US ETFs, the most efficient ETFs available. DEGIRO stopped offering this access a while ago. For European investors, it does not make much difference since they cannot legally access these ETFs.
As far as fees are concerned, they are both very affordable. 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.
For safety and security, IB leads the way 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 a better broker than DEGIRO, especially for Swiss investors. For European investors, the difference is small, and they may appreciate the fact that DEGIRO comes from the EU while IB comes from the US.
DEGIRO vs Swissquote
Many Swiss investors prefer using a Swiss broker rather than a foreign broker. This presents the advantage of keeping the money in Switzerland and making it easier to work through regulations in case something goes wrong.
In that case, we should shortly compare DEGIRO and Swissquote.
Swissquote is the most famous Swiss broker. So, for many Swiss investors, this presents a significant advantage.
On the other hand, Swissquote will be significantly more expensive than DEGIRO. The transaction fees are significantly higher, and you must pay the Swiss stamp duty.
Both brokers have all the necessary features for most investors. And they both have different apps that you can use to trade.
One other advantage of Swissquote is that they have higher regulations. They also have a better reputation, and I would say they are more professional in their execution.
Overall, both brokers are quite good. If you prefer a Swiss broker, go with Swissquote. If you do not mind a foreign broker, go with either of DEGIRO or Swissquote.
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.
DEGIRO is an excellent broker with very 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. Their customer service is not always top-notch, and their communication skills are quite lacking. Also, their applications are not as good as they could be.
But, overall, I still believe that DEGIRO is a good broker and a good choice 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 U.S. ETFs. But if you want to invest with a European broker, then DEGIRO is a great choice.
Have you ever used DEGIRO? What did you think of it?