DEGIRO vs eToro: Which Is Better For You in 2024?
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There are many good brokers available. Today, we are comparing DEGIRO vs eToro, two popular European brokers. So how do you choose between them?
You will need a broker account to trade in the stock market. You must choose your brokerage company well. You will likely keep the same one for a long time, and changing brokers is a significant pain.
DEGIRO is a broker from the Netherlands that advertises very low fees. And eToro is a broker from Israel that mainly promotes social trading.
So, how can you choose between the two? This article helps you decide by comparing in detail DEGIRO vs eToro. The comparison will be made on many levels: fees, availability, security, etc.
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?
DEGIRO is a brokerage company from The Netherlands. It was founded in 2018. They offer services in 18 countries and have been available in Switzerland since 2018. They are claiming about two million customers as of 2022.
The main selling point of DEGIRO is its low fees. They use fees as their primary advertising point and have been growing very fast.
They offer access to many investing instruments (stocks, bonds, ETFs, and so on) on many different stock exchanges. However, this article will only compare these two brokers for stocks and ETFs.
If you want more information about them, I have written a full review of DEGIRO.
What is eToro?
eToro is a brokerage company founded in 2007 in Israel. They now operate in more than 140 countries and claim 11 million users. The company is currently valued at over 800 million dollars. These are impressive numbers!
eToro selling points are on two fronts:
- Their low commissions.
- Their social trading systems.
The first point is self-explanatory. But the second point is where eToro differs from other brokerage companies. They have two significant features for that. They have the CopyTrading feature that you can use to copy the trades made by the most successful traders in the customers. You can also use the CopyPortfolio feature to copy the portfolios of other users or famous investors.
They offer access to many investing instruments: stocks, bonds, ETFs, CFDs, and even cryptocurrencies. But we will only talk about stocks and ETFs in this article.
For more information, you can read my review of eToro for Swiss investors.
Which has better minimums?
First, we compare the minimum of DEGIRO vs eToro.
First, eToro has a minimum deposit limit of 200$. You will need at least this amount to start trading with them. On the other hand, DEGIRO has no minimum deposits. So you can start with a tiny amount. It is probably not a big deal since this is a small minimum.
eToro supports fractional shares, so you buy fractions of shares (with a minimum of 10 USD). DEGIRO does not support fractional shares, so you must buy entire shares. For most people, this should not matter either.
Overall, both brokers have good minimums.
Which is more available? DEGIRO vs Toro?
Then, we can check the availability of DEGIRO vs eToro worldwide.
eToro is available in more than 60 countries, including the United States. There are some countries where eToro is blocked.
On the other hand, DEGIRO is available in 18 European countries.
From an availability point of view, eToro is much better than DEGIRO.
Support in Switzerland?
We cannot look at the details of each country. But we should look at the details for these two brokers in Switzerland.
As a Swiss, you can open an account with both platforms. However, there is an essential difference regarding currency.
DEGIRO offers access to Swiss Francs (CHF) if you have a Swiss account. You can deposit money directly (and for free) to your account in CHF. You can hold other currencies, but this requires manual currency conversion, which is more expensive.
On the other hand, eToro operates with U.S. dollars (USD). You can deposit dollars directly to your account. They also support deposits in other currencies (EUR, GBP, AUD, RMB, THB, IDR, MYR, VND, PHP).
If you are paid in EUR, you can deposit your money directly on eToro. However, this will not be free, and it will be expensive. You will pay a 0.5% fee on each deposit and withdrawal. This fee is terrible.
However, you cannot deposit CHF into your account. So, you must convert it to USD or EUR before wiring it to eToro, for instance, with Revolut or Wise. Or with your bank, but this will be excruciatingly expensive.
Regarding access to stocks, both DEGIRO and eToro give you access to the SIX Stock exchange. SIX is the principal stock exchange in Switzerland. Both brokers will give you access to all the Swiss shares you need.
So, for Swiss investors, DEGIRO is miles better than eToro. eToro is only acceptable if you have USD directly. Otherwise, the conversion fees are terrible.
Which has more features? DEGIRO vs eToro
We can take a look at the features that both brokers offer.
Since we are primarily passive investors, we should start by looking at the offer of ETFs. And there is a big difference between these two brokers here. The choice of ETFs on eToro is minimal. You do not have access to all the ETFs on the stock exchanges. On the other hand, DEGIRO does not limit your choice.
So, if you are a passive investor, ensure that eToro supports your ETFs before using them. You can also simply directly use DEGIRO instead.
They both offer a mobile application and a web application. I have seen that eToro applications are better designed and more polished than DEGIRO applications. But this is mostly a matter of taste. They are both aimed at being very simple to use, even for beginners.
For trading, both brokers offer similar features. You can buy and sell shares with the typical stock market order types. There is nothing special here for either of the two brokers. They both have more trading features than you need.
One difference is that DEGIRO does not let you trade currencies by default. You can enable AutoFX to trade multiple currencies, but this will make currency conversions even more expensive. eToro, on the other hand, lets you trade currencies directly.
From a research point of view, eToro offers more information on each stock than DEGIRO does. This does not matter to me since I only invest in few ETFs.
On top of that, DEGIRO does not have other features.
On the other hand, eToro has several features for what they call social trading. As I mentioned in the introduction, with eToro, you can copy the trades of another investor, or you can replicate some famous portfolios. Again, I do not think this matters much if you are a passive investor. But these features are still quite interesting.
eToro makes it very easy to use advanced features. It may be why 75% of people on eToro are losing money. Leverage investing should not be easy to use. On the other hand, even with DEGIRO, the majority of users are losing money.
So, eToro has many more features than DEGIRO. But it only matters if you need these features. And if you are a passive investor and want to invest in ETFs, DEGIRO offers many more ETFs. DEGIRO is more suited for passive investors, while eToro wants to attract active investors.
DEGIRO vs eToro – Which is cheaper?
Both brokers are cheap, but which of DEGIRO vs eToro is cheaper?
For stocks and ETFs (the only two things I am interested in), eToro has zero fees! Yes, you heard that right. You can trade in stocks and ETFs for free with eToro. This commission-free trading is only for long positions without leverage. But this is fine because we are all about passive investing here.
On the other hand, DEGIRO is only free of transaction costs (other fees apply) for the Core ETFs. However, DEGIRO has low fees on most exchanges.
We can compare both to take a look at the differences:
| Operation | eToro | DEGIRO |
|---|---|---|
| Buy 10’000 USD of Apple | 0 USD | 2 EUR |
| Buy 5’000 CHF of Novartis | 0 USD | 6 CHF |
| Buy 1’000 EUR of Audi | 0 USD | 4.90 EUR |
So, at first sight, eToro is much cheaper than DEGIRO. While DEGIRO is still cheap compared to other brokers, eToro zero-commission trading cannot be beaten.
The spread between the bid and ask prices will be significantly higher with eToro. This is one of the ways they make money. However, it is challenging to quantify.
That is true only if you can transfer USD directly to your eToro. As we have seen before, eToro does not accept CHF. It means you will have to convert it somehow. And while eToro accepts EUR, they charge a horrendous fee of 2.5% per deposit and withdrawal. This insane fee completely dwarfs all the fees you would ever pay with DEGIRO.
We can also briefly discuss currencies. DEGIRO does not allow you to trade currencies. Once you need another currency, it will be converted automatically. This conversion will cost 0.25% of the transaction, and this fee is not negligible.
On the other hand, eToro lets you buy foreign currency. The fees vary from currency pair, from 0.03% to 0.50%. You can find the actual spreads here.
Finally, we should also look at non-trading fees. Deposits are free with both brokers. Withdrawals are free with DEGIRO but will cost 5 USD for eToro. Also, eToro has an inactivity fee of 10 USD per month if you have not logged in to your account in a year. Everybody can ignore this fee since everybody should connect to their broker account at least once a year.
DEGIRO has one extra fee: the exchange connectivity fee. For each exchange you use (excluding your local stock exchange), you will pay 2.50 EUR per year.
Which is more secure?
We need to take a look at the security of DEGIRO vs eToro. Your assets must be secure if you plan to invest money.
From a technical point of view, both brokers are secure. They both offer Two-Factor Authentication. And I have not found any information about leaks or breaches in these brokers.
Technical security is probably more important than you think. If you have money accessible online, you must be careful about your online security.
How are these brokers regulated?
Both brokers are well regulated by European and International laws.
Since eToro operates in many countries, it must comply with several laws. So, there will be different regulations based on where your account will be. The German Authorities (BaFin) regulate DEGIRO.
How are your assets protected?
In both cases, you will have the same protection of 20’000 EUR if you use their European accounts. This protection is only protecting your cash. Assets should generally be in your name and, as such, be safe from bankruptcy.
DEGIRO and eToro are holding your assets in segregated accounts. Segregation means your assets are not on their balance sheets but on a subsidiary company. This segregation is essential because this should ensure that if the main company bankrupts, your assets are safe with the second company.
In both cases, when you buy stocks, you will directly buy the real stocks, which will be held in your name. Now, there are two exceptions to consider.
First, by default, DEGIRO will be able to lend your assets. It means they can lend your assets to a short seller without you knowing. It incurs a small extra risk.
eToro also has some exceptions where stocks are held as Contracts for Differences (CFDs) and not real stocks. This can be a major issue if you are buying US ETFs. Indeed, all US ETFs are purchased as CFDs instead of the stock itself.
This should not be a problem for European ETFs unless you use the Milan Stock Exchange or the Helsinki, Copenhagen, and Oslo stock exchanges. In these stock exchanges, stocks are purchased with CFDs. You should read the list of eToro exceptions to be sure.
CFDs are not regulated as well as stocks and are not protected either. So, if something happens to eToro, you will not have the same level of protection as if you had stocks. When owning a CFD, you do not own the stock!
Reputation -DEGIRO vs eToro
We can also compare the reputation of DEGIRO vs eToro.
Both brokers have an average reputation. They both have some big fans and some prominent detractors. But they do not have an excellent reputation.
We can take a look at the user reviews of DEGIRO on TrustPilot. They are graded at 3.6 out of 5. The main issues pointed out by customers are mainly about customer service (or the lack of customer service). Other problems are related to withdrawals that seem to be slow in some countries.
We also need to remember that many reports are simply from people who did not read the conditions and are salty for paying a fee they did not research. We should also keep in mind that many people are complaining about the waiting list that is in place during the coronavirus crisis.
We can do the same for the user reviews of eToro on TrustPilot. They do worse than DEGIRO, with 2.4 out of 5. The main complaint about eToro is that they often change the fees and conditions. It means that when you create your account, the conditions could be different than a few months later when you trade.
Other complaints are about the high currency conversion fees and spreads. Many people also complain about the lack of transparency in advertising zero-commission. They also seem to have several issues executing orders, which is concerning. Finally, there are also some complaints about customer service, but fewer than DEGIRO.
Some of the bad eToro reviews are simply from people who did not research. However, the official information indeed lacks transparency for fees.
When comparing the reputation of DEGIRO vs eToro, DEGIRO has better reviews than eToro. But neither of them has an excellent reputation.
DEGIRO vs eToro – Summary
To finish this comparison, here is a summary of the primary comparison points between the two services:
|
Great broker for Europe
|
|
|
4.5
|
2.5
|
|
Low trading fees
|
Zero trading fees
|
|
|
|
|
- Great prices
- Many investing instruments
- Free deposits
- Poor customer service
- No trading fees
- Many trading features
- Poor transparency
- Expensive deposit conversion
- Poor customer service
- Poor reputation
There are some good and some bad with each of these two brokers. eToro has extra features for social trading and offers zero commission fees. However, eToro is bad if you do not have USD to deposit in their accounts. Because of that, it will be more expensive than DEGIRO.
You need to be careful about that because many people do not realize that before they start depositing money into their accounts. I would never use eToro unless I could directly deposit USD into my account.
Also, eToro lacks transparency and makes a lot of changes to its policies and fees without the proper information. Some of the things I have read about this worry me. But I will let you form your own opinion.
DEGIRO vs eToro Conclusion
We have now compared DEGIRO vs eToro in detail.
DEGIRO and eToro are very different brokerages. DEGIRO is suited to European countries, while eToro is more of an international brokerage.
Now, for Swiss investors, DEGIRO is much better than eToro. Since eToro does not support CHF deposits, you must convert your money with your bank or a service such as Revolut. But this is highly inconvenient. And even if you have access to EUR, the conversion fees are just outrageous (2.5%!).
eToro is only good if you have access to USD. Otherwise, it simply does not make sense. The fees you will pay for the conversions will outweigh the benefits of having zero-commissions trading, and by far! On top of that, the fact that many positions are held through CFDs is a severe lack of safety for investors.
On the other hand, DEGIRO handles CHF and EUR deposits and also has very low fees. If you want to learn more, read my review of DEGIRO.
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“Assets should generally be in your name and, as such, be safe from bankruptcy.”
NOT CORRECT!
Not sure about DEGIRO, but eToro is the beneficial holder of the stocks that you buy there. Given that they offer fractional shares, the have to pool the trades and appear on the share register (instead of their clients)
Also the fact that you cannot transfer the shares you hold there to another broker means that once they are bust, so are your shares held in that account (see link below)
https://www.etoro.com/customer-service/help/1281273772/what-do-i-purchase-when-i-buy-stocks-on-etoro/
While I do use eToro myself, I would never put significant amount of my portfolio there.
Hi Victor,
Are you sure about what you say? In the link you mentioned, it’s written ” you are investing in the underlying asset, and the stock is purchased in your name” and they mention in their regulations that all assets are segregated.
Note that it’s true that you do not have an account in your name in another bank. Everything is pooled together but that’s done by almost every broker, degiro, IB and eToro.
You can have more information about asset segregation.
Note that most, if not all (?), the ETFs offered on eToro are US listed, and as stated in the eToro “Help” section: “All US ETF positions opened by clients of eToro (Europe) Ltd and eToro (UK) Ltd are only available as CFDs”. Obviously, if you hold a CFD position on an ETF you do not own the ETF and therefore also not the underlying assets of such ETF. I personally find this a very big negative with eToro. Also, as per the eToro website: “All stock trades made on the Copenhagen, Helsinki, Milan, Oslo and Saudi Arabia stock exchanges are executed as CFDs”. Again, when transactions are executed as CFDs, you do not not actually own any assets, i.e. you hold the credit risk of the counterparty.
Hi JD,
I had mentioned the exceptions such as Helsinki, but I did not mention the US ETFs. Thanks for letting me know, this is now updated!
And this is indeed a huge problem.
There is one thing that should also be highlighted. Bid-ask spread is way higher than DEGIRO if you have eToro account which is the hidden cost of zero-commission trading.
You are absolutely right, I forgot to mention that! Thanks!
Hi, thanks for the great comparison.
I have been using Degiro for quite a while now and am generally happy with it. However as I primarily trade in US securities my account is in CHF all of my trades get a currency hit every buy and sell. Do you know any way around this issue?
Hi Clint,
With DEGIRO, I do not think there is a way to get cheap USD/CHF conversions. You could go on margin to avoid buying USD, but then you would pay interest on the loan.
You could consider interactive brokers instead. For large conversions, it’s cheaper.
Thanks, really interesting.
I miss a section who could tip the choice one way or another: tax.
Do they provide “swiss-friendly” tax reports? Can I see what my dividends have been? And how much was retained?
Do you (or anyone elso) have experience when presenting these trades to Mr Taxman?
Hi,
DEGIRO provides a useful tax report. I have used it in the past for Swiss Taxes. I think it should be good enough.
For eToro, I have no idea.
In general, a simple annual statement is enough for the tax office, they do not need an official Swiss tax statement.
Thanks for stopping by!
Hi both. I started using eToro this year and I am freaking out about the tax implications, because I copied popular investors who have done various microtransactions, used leverage, etc. From eToro you can export a report, but I have been told the Swiss authorities need a detail on all assets that paid dividends? Also if the ETF is reinvesting you need to provide further info. Gosh, I think I did a terrible mistake.
Hi Francesco
If you are using eToro and its feature to copy investors, you will indeed need to provide details to the tax authorities. And given that this is by far not passive investing, you have a risk of being classified as a professional investor and see your capital gains taxed. But this will also depend on the numbers we are talking about. Unless these are huge numbers, this won’t be too bad for your taxes.
But this will make filing your taxes much more complicated indeed.
Very nice article. Thanks.
Hi.
I have used Degiro from Swizerland pretty much since they started. I like the low fees but miss tools for following-up the portofolio development long term.
Recently Inoticed that trading in ethereum trackers have been disabeld. I do not know if it is only for me or if they changed the category of this tracker to D. Just saw a message that trading category D has been disabled. No other info or explanation so that is a bit disappointing.
Thanks for the blog!
Hi Anders,
DEGIRO is awful at communicating. They implement changes, tell nobody. It’s been that way since the beginning.
In that case, I do not have an explanation either. It may be a risk-thing. But it’s not good doing it that way…
Thanks for stopping by!
Hi,
Thanks for the analysis. But I didn’t get your emphasis on the currency exchange fee when depositing/withdrawing to/from etoro’s account. Isn’t it true that if you use for example Revolut, you can deposit directly in USD using Revolut’s exhange fee and the same thing when you withdraw? And that’s actually a very simple process since Revolut does the conversion automatically for you at a fair rate. In that case you wouldn’t be hit by any extra fee from Etoro correct? All that can happen is that the exchange market naturally turns unfavorable to you(i.e USD loses value against CHF).
Thank you
Hi JP,
Yes, you could move your CHF to Revolut and then deposit this money to eToro.
But there are issues with that:
* It’s slightly more complicated
* You only get 1250 CHF of conversion for free per month, after this, you pay fees
* You have to trust Revolut with potentially a lot of money every month
For some people, this would be an okay solution. But not for me. If that is a good solution for you, then, go for it :)
For me, it’s a big blocker, for a Swiss investor.
Thanks for stopping by!
Thank you for the interesting review! may I ask you how did you come to this 2.5 % fees of eToro? I am using it and concerned about the fees. I found this on their website (https://www.etoro.com/trading/fees/#others) which tells actually a 0.5 % instead of 2.5 % for users using Euro:
Initial Deposit: 10,000 EUR
EURUSD rate: 1.1189
Deposit in USD: 11,189 USD
Deposit in USD (deducting conversion fee)
11,139 USD (1.1189 – 0.0050) * 10,000 EUR
I can imagine when you want to withraw the same story happens and you should consider it 1% actually. Am I right?
Hi M,
I actually can’t find it back. I may have been wrong with this 2.5% or they change it. It seems to be 0.5% now. But even 0.5% on each transfer is bad compared to DEGIRO.
Thanks for pointing that out!
Thanks for your reply! you are right! even 1% is high. I checked the website again, if you deposit via PayPal or credit card, Etoro may charge up to 2% (deposit plus withdraw excluding the withdrawal fees). The bad thing about Degiro is the order fee and the additional costs which seems to me a bit complicated. I could find this which may help:
https://www.degiro.de/preise/kostenrechner
Hi,
Yes, with a credit card or PayPal it’s even worse. But I do not really see why people would use a credit card for transferring money to their broker.
Thanks for sharing the details about DEGIRO. It’s indeed more than eToro for that, but if you do not day trade, these fees are really low. And if you want to pay even less, go with Interactive Brokers, it’s better :)
Thanks for stopping by!
Thanks! This was a great analysis! I know nothing about investing, but have been meaning to learn more for ages..
Thank you so much! Excellent review…
Thanks Tham :)