DEGIRO vs Interactive Brokers for European Portfolio: Who is cheaper in 2024?
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DEGIRO and Interactive Brokers are great brokers for European investors. But how do they compare exactly? Which one should you choose?
In this article, I compare DEGIRO vs Interactive Brokers in terms of price for a European ETF portfolio. I compare different scenarios that should cover the needs of most long-term investors.
We only compare the costs of both brokers, not the features and usability. If you are interested in the features, I have written reviews of both brokers.
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.
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Great broker for Europe
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My top pick
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4.5
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5.0
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Our investment portfolios
For this comparison of brokers, we consider two different portfolios.
Since the fees do not change, we are not interested in the exact ETFs used. We are only interested in which exchange you purchase the ETFs.
For a choice of ETFs, I wrote about possible portfolios with European ETFs. To know why we must invest in European ETFs, you can read why we may lose access to superior U.S. ETFs. Swiss investors still have access to US ETFs, but European investors have already lost access.
The first portfolio is for a Swiss investor. This investor has 25% of his portfolio in a Swiss ETF (from the SIX stock exchange). The rest of the portfolio is from a European ETF (from the Euronext Paris stock exchange).
Our second portfolio, for a European investor, is even more straightforward. This investor has 100% of his portfolio in European ETFs (from the Euronext Paris Stock Exchange).
In both cases, each investor only invests once a month in one ETF. It is a perfect way to invest with low fees. Some people are investing every quarter. But it barely reduces fees, and it makes you keep more cash. Investing every month is also an excellent way to build an investment habit. So monthly investments make more sense.
For these two investors, we compare the prices of two brokers: DEGIRO vs Interactive Brokers. These two brokers are among the cheapest available in Europe. But which is more affordable for each scenario?
DEGIRO Fees
First, we study the fees for each service, starting with DEGIRO.
With DEGIRO, you pay a connectivity fee of 2.5 EUR (2.68 CHF) per year and per stock exchange on which you own shares. If you have an ETF on SIX and one on Euronext Paris, you pay 5 EUR per year. However, your local stock exchange is free. So, if you are a Swiss investor, you get SIX for free.
If you convert currency on your account, you pay a fee of 0.25%. It can quickly become expensive once you invest a large amount of money. A currency exchange happens if your base currency is CHF and you buy an ETF in EUR.
The fee system of DEGIRO is pretty simple. Unfortunately, it is slightly different for each country. I wish DEGIRO had the same prices regardless of which country you come from.
A collection of Core ETFs is also cheaper with DEGIRO. It used to be free, but the service fee still applies. You also still have to pay currency exchange fees if necessary, but the other expenses are waived. We do not use that for this comparison since that would significantly restrain our choice. But if you choose ETFs in the core selection, you can make it cheaper.
With DEGIRO, a Swiss investor pays 3 EUR (3 CHF) for each purchase of a Swiss ETF. The price is also the same (3 EUR (3 CHF)) for a European ETF. 2 EUR goes to DEGIRO while the other 1 EUR covers the third-party (the stock exchange) costs.
Now, for the European investor case, I take the example of DEGIRO France. The fees are a bit different from country to country. So, if you are not in France, you can check out the prices on your DEGIRO website.
Interestingly, this investor only pays 2 EUR (2 CHF) for each purchase of a European ETF. DEGIRO gets 1 EUR, and 1 EUR is for the third-party costs. It would be the same price for a Swiss ETF. However, European investors are unlikely to invest in Swiss ETFs. Interestingly, this is significantly cheaper than investing for a Swiss investor.
In the past, another account type was the DEGIRO custody account. But as of 2022, this account is not offered anymore to new customers.
Interactive Brokers Fees
Now, we also have to study the fees for Interactive Brokers. They do not have two account types but have two fee systems: Fixed and Tiered. So we compare these two. Other than the prices, there are no differences between the two pricing systems.
Regardless of where you live, you pay the same fees, which simplifies them a bit. In both cases, there are no custody or inactivity fees!
For both account types, you pay 2 USD (2 CHF) for currency exchange. The Swiss investor must exchange some CHF into EUR to buy European ETFs.
Fixed Pricing
The Interactive Brokers Fixed pricing is straightforward.
For buying an ETF on the Swiss Stock Exchange, you pay 0.10% of the total transaction. The minimum fee is 10 CHF, and there is no maximum fee.
For purchasing an ETF on the European Stock Exchange, you pay 0.10% as well. But the minimum fee is only 4 EUR (4.28 CHF), and the maximum is 29 EUR (31.05 CHF).
In some cases, your order may use IB Smart Routing. In that case, the fees can be even lower. However, it is difficult to know which order uses which routing system. Therefore, I assume the higher fees. But it is good to know that fees can go even lower!
Tiered Pricing
The Interactive Brokers Tiered system is more complicated.
First, you must pay some transaction fees to IB for each region. Then, based on the stock exchange, you must pay some extra fees. And they are entirely different based on the exchange.
For buying an ETF on the Swiss Stock Exchange (I took EBS), you pay 0.05% in transaction fees to IB (with a minimum of 1.50 CHF and a maximum of 49 CHF). You then pay a flat fee of 1.5 CHF for the exchange and an exchange fee of 0.015%. On top of that, you pay a 0.38 CHF clearing fee and a 1 CHF trade reporting fee.
For buying an ETF on the European Stock Exchange (Euronext Paris), you pay 0.05% in IB transaction fees with a minimum of 1.25 EUR and a maximum of 29 EUR. You pay a 0.01% exchange fee (with a minimum of 0.8 EUR). And the clearing fee is 0.10 EUR.
We can observe that it is much cheaper to trade on Euronext than on SIX. Switzerland has a reputation for being expensive!
As you can see, this is much more complicated than the Fixed system. But you do not have to worry about this; I do all the math for you!
Swiss Investor
We can start with our Swiss portfolio, with 25% of a Swiss ETF and 75% of a European ETF.
In this case, our example investor invests once every four months in the Swiss ETF and the other months in the European ETF. The Swiss Investor has CHF as its base currency. It means that buying the European ETF incurs a currency conversion.
It is the kind of portfolio that most Swiss invest in. If you do not want a Swiss ETF, skip to the next section for a complete Europe ETF Portfolio. However, the following section uses EUR as a base currency.
We compare DEGIRO vs Interactive Brokers for this Swiss investor for several scenarios.
Starting investor
Our first scenario is with a person starting to invest.
The investor begins with 25’000 CHF and invests 1000 CHF every month. It is a typical scenario for someone just investing in the stock market. But this is only an example. There is no problem starting with zero CHF.
Here are the total fees for each broker account:
In this case, Interactive Brokers Tiered and Fixed are slightly cheaper than DEGIRO, but it is not significantly different. We can see that the Tiered pricing of IB is more affordable than Fixed for small investments.
So, in this particular case, Interactive Brokers Fixed and Tiered are the best choices.
Standard Investor I
For the second scenario, we can take an investor who has 100’000 CHF and invests 2000 CHF monthly. After a few years of investing, this is the state that many investors can reach.
Here are again the total fees for each broker account:
Both Interactive Brokers Tiered accounts are now significantly cheaper than DEGIRO.
So, in this particular case, Interactive Brokers Tiered is the best choice. However, it is only marginally cheaper than Interactive Brokers Fixed. Both are excellent choices for this scenario.
Standard Investor II
Here is what happens if we invest 5000 CHF monthly instead of 2000 CHF. It is still a typical investing case.
This scenario would give us the following totals:
We can see that Interactive Brokers Fixed is the best option here. Interestingly, Fixed is now cheaper than Tiered. And Interactive Brokers is now twice as cheap as DEGIRO.
Once again, in this particular case, Interactive Brokers Tiered would be the best choice.
Advanced Investor
We should check the last scenario for our Swiss investor. This time, our investor has 500’000 CHF and is investing 10’000 CHF every month. This scenario is not typical since this is a lot of money. But this is still possible.
We get the following totals from this case:
Not a lot of things have changed in this scenario. We can note that the gaps between the different options are increasing. The Fixed account is still the best option. Tiered is still relatively cheap as well. However, Interactive Brokers is now more than three times cheaper than DEGIRO!
In this case, Interactive Brokers Tiered is the cheapest option.
Conclusion Swiss Investor
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
We can draw several conclusions for Swiss investors:
- Interactive Brokers Tiered is the cheapest account for small investors
- Interactive Brokers Fixed becomes cheaper for the higher amount invested per month.
- The difference between Interactive Brokers Tiered and Interactive Brokers Fixed is relatively small.
- DEGIRO can become several times more expensive than Interactive Brokers
- Most of the fees of DEGIRO come from currency exchanges.
For Swiss investors, I recommend using Interactive Brokers.
It does not mean that DEGIRO is a bad broker for Swiss investors. In the worst scenario, you would pay 264 CHF more per year. This is not a considerable amount. DEGIRO is still a great broker, not just as cheap as IB. If you do not want a broker from the United States, go with DEGIRO!
European Investor
If you live in Europe, you likely have a portfolio with only European ETFs.
In this case, the example investor invests monthly in a European ETF. It is a simple scenario. Since a European investor has euros, there will be no currency conversion in this scenario. It makes a significant difference!
This should be the case for most European Investors except for Swiss investors. It could also be different for people from the United Kingdom since they do not have euros.
Some of the prices from DEGIRO vary from country to country. For this example, I took the prices from France. Interactive Brokers has no difference based on where you come from.
We compare DEGIRO vs Interactive Brokers for the same scenarios for this European investor.
Starting investor
Our first scenario is for a person that is starting to invest. The investor begins with 25’000 EUR and invests 1000 EUR every month. This scenario is typical for a European investor just starting to invest in the stock market.
Here are the total fees for each broker account:
In this case, DEGIRO is very slightly cheaper than Interactive Brokers. But both are affordable in this case. Interactive Brokers Tiered is better than Interactive Brokers Fixed.
So, in this case, DEGIRO is the best option. But IB is also very cheap.
Standard investor I
Our second scenario is with a person in the second stage of investing. The investor already has a portfolio of 100’000 EUR. This standard investor invests 2000 EUR each month.
Here are the total fees for each broker account:
Nothing changed in this scenario. So, in this case, DEGIRO remains the cheapest option by a small margin. But IB is also very cheap.
Standard Investor II
Here is what would happen if this standard investor invested 5000 EUR per month instead of 1000 EUR.
This scenario would give us the following fees per broker account:
Now that the investments increase, IB becomes more expensive while the prices for DEGIRO do not change. The gap is starting to be more significant here. Interactive Brokers Fixed is now cheaper than Interactive Brokers Tiered.
For this particular case, DEGIRO is the best option.
Advanced Investor
Finally, we also check the final scenario for our European investor. Our last investor has 500’000 EUR and is investing 10’000 EUR every month. It is not a typical scenario since this is a lot of money. However, this is still possible for dedicated investors or high-income earners.
Here are the prices for each broker account:
Once again, DEGIRO is the best option, twice cheaper than Interactive Brokers Fixed.
Conclusion European Investor
We can draw several conclusions for European investors:
- DEGIRO is the cheapest account
- Interactive Brokers Tiered is a good option for small investors
- Interactive Brokers Fixed is a good option for investors with more money
- Investing without currency exchanges can save a lot of money.
Most European Investors should go with DEGIRO.
One advantage of IB is that you can move from country to country without changing your account to a new entity. With DEGIRO, the entity you use depends on where you live. So, if you move abroad, you may have to switch your account, which is not free. So, if you plan to move abroad or be a nomad, I recommend Interactive Brokers.
Conclusion – 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
There you have it! We now know the cheaper option between DEGIRO vs Interactive Brokers for several scenarios. Interestingly, both broker accounts are competitive. There is no bad option between these two brokers.
We can draw some conclusions from this comparison:
- For a Swiss Investor, Interactive Brokers Tiered should be the most affordable broker unless you invest a lot, in which Interactive Brokers Fixed becomes interesting.
- DEGIRO should be the most affordable broker option for a European investor.
- There is very little difference in prices between DEGIRO and Interactive Brokers. Both brokers are very affordable.
So which should you choose? Swiss investors should probably go with Interactive Brokers Account. If they do not want a US broker, they should go with DEGIRO.
European investors, on the other hand, should probably go with DEGIRO. It is significantly cheaper for beginner investors.
If you need more information on these brokers, you can read my reviews:
What about you? Which broker do you use?
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Hi,
Thank for great comparison!
Do you think it would be possible to add a longterm investor, who buys once and then forgets about stocks for many months or years or buys every few months like quartely/half year/yearly?
For example with 25.000CHF/EUR, then 100.000CHF/EUR, and 500.000CHF/EUR?
Best regards,
AMartin
Hi AMartin,
Do you mean a comparison between DEGIRO and IB for these three scenarios? It’s fairly easy:
* 25’000 invested will cost you more at IB (because lower than 100K)
* 100’000 invested will be almost the same (slightly cheaper with IB because no connection fee)
* 500’000 invested will be the same as 100’000
If you want to do that for each brokers, only take custody fees into accounts and one with the lowest custody fee wins :)
Thanks for stopping by!
Hi,
do you mind publishing your Excel Sheet or Google Sheets where we can put in our own numbers?
Hi Sven,
Sure, here it is: https://docs.google.com/spreadsheets/d/1Ksl5mbKiQme0aWYBOfnINnuZW6AOeB7XsNj5hqfPAOw/edit?usp=sharing
If you find any mistakes, let me know :)
Hi Mr. Poor Swiss,
Great stuff, very nice read!
I had one question, maybe an obvious one. Based on your analysis, it is cheaper to be with Degiro until you have $100k and switch to IB afterwards.
Question is: Assuming you hit $100k, how expensive would be to transfer the funds to IB? Assuming there are costs at both parties, does it make sense to switch or do transfer costs outweigh the savings?
Many thanks in advance.
Hi D,
Actually, I do not recommend switching later. If you know you are going to end up with more than 100K and want to use U.S. ETFs, then directly go for IB and pay the fee.
The costs of transferring a portfolio will depend on how many positions you have. If you use the securities transfer feature, it will cost between 20 EUR and 80 EUR per position (depends on which stock exchange).
For me, the main reason to go with IB is to use U.S. ETFs. The 120 CHF per year will not kill your budget if you are serious about reaching 100K.
Does that make sense?
Hi, Mr The Poor Swiss,
Thank you for sharing your knowledge with us. I am a total beginner and I am learning a lot. Big thanks.
You focus your analysis on two brokers according to criteria such as safety, price and quality. However, I am reading a lot about eToro and I see that is even cheaper. I am interested in reading your opinion about eToro. Could you please share it with us?
Thank you
Thamy
Hi Thamy,
Thanks for your kind words :)
So, I have not yet done a fully analysis of Toro. But there are two things that I do not like at first:
* They do not support CHF deposit, this means you will pay large fees to transfer money to them. You could go through Revolut, but I do not trust Revolut with large amount of money (and only 5000 CHF per month are free).
* They have expensive currency conversion fees, comparing to IB, and even comparing to DEGIRO. So if you have mostly CHF and need to convert a large part to USD, you will waste a lot of money doing that.
(And also, I hate their advertisements on Youtube…)
With these two things, I think it makes it more expensive than the others. But I would need to do a full comparison of both. I will put that on my list, but I do not know when this will come :)
Thanks for stopping by!
Hi,
don´t tell me that you cannot open an account in USD within some swiss bank (convert using Revolut) and send USD to eToro? Even in CZE I can hold an account in CZK, USD, EUR, CHF, for free.
My concerns with eToro are the spreads. That is someting more “fluid” :-) thant some exact fees. I use eToro for, what you call it “fun money” and works well.
Michala
Hi Micha,
To my knowledge, there is no free USD bank account in Switzerland. And I do not trust Revolut to convert large amounts of money.
Indeed, eToro spreads maybe where we lose more than the fees that we gain.
Thanks for stopping by!
Thanks or sharing your research & experience!
It seems to me that you only take into account a relatively short investment time span. But at some point in the future, you will want to go short and start selling. This will also incur fees that are presumably different for each broker.
Have you also calculated the cost of exit scenarios?
Hi Samuel,
On the other hand, Itake into account a very long investment span. If you invest for the long term, buying fees matter more during the accumulation phase. But for all brokers I know, selling fees are the same as buying fees, so this should not be an issue.
What do you mean by going short? If you just mean selling, then I answered this question. But if you mean short selling, I will not compare the fees since simple passive investors should never need that.
Thanks for stopping by!
Thanks for your reply! Yes, I just meant selling.
You are right: It seems that the fees for selling shares/ETFs are usually the same as for buying. So a cheep broker for investing (like IB) will presumably still be a good choice once to want to leave.
Thank you, Samuel
Hello Mr Poor Swiss :-)
I apologize if the questions are a little stupid. I’ve really enjoyed your posts and tried to compare DEGIRO and IB with my personal investment profile.
I have a question:
“Standard Investor I” (Swiss) starts with 100,000 CHF. He invests 2,000 CHF in Swiss ETF, and incurs 2 EUR (2.15 CHF) and 0.03% of the transaction value.
Are you suggesting hte initial 100,000 CHF are not (or not entirely) invested in Month 1 ?
Apologies if I got your table completely wrong…
Thanks for your content anyways!
Hi Tristan,
This is not a dumb question :)
I should have made this clearer in the article. I meant that this standard investor already has 100’000 CHF invested in the stock market. And then, he invests 2000CHF more every month.
The difference is in the custody fees for IB and in the dividend fees for DEGIRO.
Does that make sense?
Thanks for stopping by!
Hello,
I see that many ETFs are traded in several currencies at the SIX Swiss Exchange. Many of them are listed also in CHF. By buying these we can save the currency conversion fees. What do you think?
Thanks
Hi Marco,
You will save on some fees yourself, yes. But the fees are still present because when you buy it, the currency is still converted. And you will take on extra currency risk. The base currency still remains USD for instance,
I much prefer to hold funds in their base currency.
Thanks for stopping by!
Hi
whats the minimum to open with IB?
Can we short stocks with Degiro? I doubt…
thanks
R
Hi Ray,
There is no minimum with IB for a cash account. And there is a 2000$ minimum for a margin account. But if you have less than 100K$, you will have to pay 10$ each month (minus your transaction fees) in custody fees.
You can short sell stocks on DEGIRO, yes. But you will have to opt for an Active or Trader account, not a Basic or Custody.
Thanks for stopping by!
Hello, I would like to know the difference between a “Custody” account to a classic account at Interactive Brokers?
Hi Jean,
Sorry, I do not understand your question. The custody account is something at DEGIRO, not at Interactive Brokers.
And it’s already compared with Interactive Brokers normal account if that’s what you are asking.
Thanks for stopping by!
Hi, keep in mind that low fees predominantly mean that the company is currently building a customer base and those fees will, most likely, increase as soon as they reach a set target of number of customers.
Hi Jason,
That’s sometimes true indeed. But IB is quite old already and DEGIRO has been pushing since the beginning with low prices. I do not think either of them is going to significantly increase their prices. But it could happen, that’s true.
We’ll see what to do when the times comes.
Thanks for stopping by!