Trading 212 Review 2024 – Pros & Cons
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Trading 212 is a European broker that offers commission-free trading on many stock exchanges. Many of you have asked my opinion about this broker.
Today, I review Trading 212 in-depth, including its fees, features, and security. By the end of the review, you will know whether Trading 212 is a good choice for you to invest with.
| Custody Fees | 0 CHF |
|---|---|
| Inactivity Fees | 0 CHF |
| Buy Swiss ETF | 0 CHF |
| Buy American Stock | 0 CHF |
| Currency Exchange Fee | 0.15% |
| Languages | English, French, German, and Italian |
| Mobile Application | Yes |
| Web Application | Yes |
| Custodian Bank | Interactive Brokers |
| Established | 2012 |
| Headquarters | Bulgaria |
Trading 212
Trading 212 was established in Bulgaria in 2004. They later moved to England but kept their entity in Bulgaria. They now have several entities (UK, Bulgaria, and Cyprus).
Although the platform has been available for some time, Trading 212 only became well-known when it switched to commission-free pricing.
As of 2022, they claim about 1.5 million users, most created during the Gamestop saga. In two years, they went from 50’000 users to 1.5 million users. They had so many new customers that they had to halt onboarding to be able to handle everybody.
They also claim 14 million downloads of their mobile application.
Investing with Trading 212
Trading 212 offers two main types of accounts:
- Invest: To invest in stocks and ETFs
- CFD: To invest in Contracts for Differences (CFDs)
In this review, I only focus on Trading 212 Invest. CFDs should be avoided at all times by the immense majority of investors. CFDs are derivatives that allow high leverage and have very lax regulations. About 70% of people lose money with CFDs.
Unlike many brokers, you can only invest in stocks and ETFs, no other instruments. However, this is not a disadvantage since most people only need ETFs to invest passively.
Trading 212 gives you access to over 7000 stocks. This number may sound like a lot, but it is comprised of stocks and ETFs available in both accounts. They do not share how many stocks are available in the Trading 212 Invest account, but this is more limited. You can see the list of all stocks available.
I have two ETFs in my portfolio: Vanguard Total World (VT) and iShares Core SPI (CHSPI). Unfortunately, only CHSPI is available at Trading 212. So, I would have to settle for subpar ETFs at Trading 212 for VT. This lack of great ETFs is a disadvantage.
I understand the lack of US ETFs since these are not allowed for European investors. However, they are available for Swiss investors, but most brokers do not care enough to differentiate.
You can deposit money into your account with a bank transfer. They also support other methods such as credit cards or PayPal, but all other methods are expensive, so it is not worth it.
Interestingly, they properly support CHF. If your base account is CHF, you can wire CHF into your account. However, remember that if your base account is CHF, you need currency conversions to buy stocks in other currencies. It is essential for Swiss investors since they generally hold most of their investments in foreign currencies.
Overall, they have access to many things, but the choice of ETFs is quite limited. Maybe I am unlucky, but none of my ETFs seems available.
Fees
We should look at the fees of investing with Trading 212.
Buying stocks and ETFs is free with Trading 212. There is no commission when buying or selling stocks.
There is also no custody fee or inactivity fee, so maintaining your account is free. All deposits by bank transfer are free.
On the other hand, if you buy a stock that is not in your base currency, you have to pay a 0.15% conversion fee. And you have to pay the same fee when you sell the stock. This fee makes currency conversions expensive with Trading 212. It is not the worst fee, but not the cheapest either.
So, if you only buy stocks in your local currency, you pay no fees with Trading 212.
However, be careful that commission-free trading often has hidden downsides. We will see several of these downsides below.
How does Trading 212 make money?
We just said that the investors do not pay any money when using Trading 212, so how do they survive?
In 2021, Trading 212 reported 45 million GBP in profit. So, how does it generate money if it does not charge fees?
CFD trading is a very lucrative business, especially since it is very poorly regulated. Indeed, brokers mainly make money from CFDs. They have a large spread on CFDs and charge interest rates on the leverage overnight or during weekends.
On top of that, Trading 212 can make money by lending your shares. Fortunately, you can opt out of this feature. Also, if you opt-in, you will get 50% of the profits.
Overall, they do not make much money on the Invest accounts, but they make more money from CFD accounts.
Is Trading 212 technically secure?
We start with technical security. The technical security of your online accounts is fundamental.
Overall, technical security looks fine. Trading 212 offers a second factor of authentication for access to the account. I have not heard of any bad reports about the technical security of Trading 212.
Although it is not directly related to security, they had many issues with the influx of people during the Gamestop saga. They had significant failures. These failures do not worry me much about the security of the data, but if they cannot handle too many users, it is worrying for the execution of trades.
Overall, they seem technically secure, but their infrastructure does not scale well with many issues.
Is Trading 212 safe?
It is important to look at how a broker is regulated and what would happen should the broker go bankrupt.
As mentioned before, Trading 212 has several entities. If you are a Swiss investor, you deal with the Cyprus entity, not the UK entity.
It is essential to mention that the reputation of the Cyprus regulation entity (CySEC) is quite alarming. It is considered corrupt and willing to close its eyes against fraud. I have no evidence of that, but I would prefer to deal with the UK entity regulated in the UK.
As for the protection of the assets, they should be safe. Interactive Brokers, one of the largest brokers, holds stocks.
On top, 20’000 EUR is guaranteed by European regulations. On top of that, Trading 212 has taken insurance with Lloyds from London that protects their customers up to 1’000’000 EUR. This is a massive amount of insurance for a broker, significantly higher than all other brokers I know.
As mentioned before, the company reports being highly profitable. A company’s financial status is also essential to determine whether it will survive.
On paper, it appears that Trading 212 is safe for your assets. I would not necessarily rely on the 1M guarantee, but it is still good that they take this kind of insurance.
One big problem is that you cannot transfer your shares from your account to another broker. This impossibility of transferring is a red flag because reputable brokers handle this well. This makes me worry that the shares are not well handled by Trading 212 if they cannot be transferred out.
Reputation
We should also consider the reputation of a broker in our review.
I have looked at the reviews on Trustpilot. They got a 4.6 score out of 5 stars. This score is quite impressive. It is difficult to believe they got such a good score, but let us give them the benefit of the doubt. However, this is not a perfect proxy for user reviews.
74% of the reviews are rated Excellent (5 stars). The good reviews mention several things repeatedly:
- Easy to use for beginners
- Good customer service
- Good fees
On the other hand, 8% of the reviews are rated Bad (1 star). These reviews mention a few points:
- Difficult to open an account (onboarding was halted for several months)
- Some trades are not properly executed
- High interest rates on CFDs
- New fees are introduced without proper communication
There was also a considerable controversy during the Gamestop saga, where some users reported that Trading 212 sold their GME shares. Considering that most people using CFD do not know what they are doing, it may have simply been margin calls. However, there were many reports like this. We also must remember that there were many reviews like this for other brokers during the same period.
Overall, it looks like the reviews of Trading 212 are quite mixed. I have heard many bad stories that were quite visible. However, unhappy users are generally noisier than happy ones. And the reviews on TrustPilot are pretty good. This does not worry me too much.
Alternatives
There are many better alternatives to Trading 212.
First, I would recommend Interactive Brokers. They do not offer commission-free trading, but they have extremely low prices. But more importantly, they offer access to US ETFs and a wide range of investment products. The quality of the ETFs is more important than the price of the transaction costs for most investors. It is the broker I am using currently. You can read my IB review for more information.
DEGIRO is also an interesting option for Swiss investors. They give access to more or less the same instruments but are more established. They have more expensive fees, but their reputation makes up for that. I also have a review of DEGIRO.
Finally, if you prefer to remain in Switzerland, Swissquote is also an interesting alternative. They are significantly more expensive, but the security is considerably higher. Again, you can read my review of Swissquote for more information.
FAQ
Can Trading 212 lend your shares?
Yes, by default, Trading 212 can lend your shares to other investors. But you can opt out of this feature.
Can you transfer your shares out of Trading 212?
No, for some reasons, Trading 212 never allowed transferring shares out of the platform.
Who is Trading 212 good for?
Trading 212 is good for investors that absolutely want free trading in ETFs and do not mind their shares to be lent by default.
Who is Trading 212 not good for?
Trading 212 is not good if you do not want your shares to be invested by default. And it is also not good if you want a way to transfer your shares to another broker later.
Trading 212 Summary
Trading is a broker from Bulgaria, later relocated to the United Kingdom. They have many users and claim to be very cheap.
Product Brand: Trading 212
3
Trading 212 Pros
Let's summarize the main advantages of Trading 212:
- No transaction fees on stocks
- You can wire CHF directly to your account
- No account fees
- Good customer reviews
- Technical security looks okay
Trading 212 Cons
Let's summarize the main disadvantages of Trading 212:
- A limited set of ETFs to invest into
- Expensive currency conversion fee
- Encourages people to gamble with CFDs
- Regulated in Cyprus
- Cannot transfer shares out of the broker
Conclusion
Overall, Trading 212 is a legit broker that has interesting features. The commission-free trading of stocks is an exciting feature.
On the other hand, there are some significant issues. First, Trading 212 does not offer access to every ETF. Also, they do not let users transfer shares out of the broker. They also lend shares by default, so you have to opt out. Finally, they have had many problems with their recent growth. These issues make me think there are better alternatives out there.
I mentioned alternatives, but Interactive Brokers appears significantly better than Trading 212. DEGIRO is probably slightly safer than Trading 212 but also more expensive. You can read about the best brokers for a Swiss investor.
Overall, I would not recommend using Trading 212. Free trading is not enough, and with a good broker, trading is cheap. So, other factors become more critical.
What about you? What do you think about Trading 212?
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Hi Babtiste,
Thanks for the rewiev!I just want to correct your statement on sharelending. Currently you can opt-out from share lending on Trading 212 and they should realease an option for outgoing portfolio transfer in 2024 as they have claimed on their social media platforms. I really like the whole app, the functionality and easiness to use, but that cyprus regulation scheme is a big red flag for me.
Thanks for sharing Zuzana, I will update that!
If they allow share transfers out, it would make them more trustworthy already!
It also appears that Trading 212 stops you from making profitable trades as soon as its algorithm notices that you are doing well. It will then for example tell you that the maximum number of shorts you can have is zero when the price of a CFD is dropping, whereas it will still let you buy.
Hi,
Did that happen to you or did you see reports of it?
Hi, thanks for asking. It happened to me; it is what it feels like because Trading212 had not done that before, in similar situations, which gave me nice profits. Maybe I was ahead of it at the time and maybe Trading212 is just limiting its risk and stops entering into certain CFDs for everyone. So let’s test that. It’s 13:30 in London at the time of writing, 31 July. What does it say for “remaining sell quantity” for PRFX, BFRG, EVLO and ENZ when you take a look at the instrument details?
Thanks for sharing.
I am not sure I get your question. I don’t have a Trading 212 account and I have never traded in CFDs in my life.
For some reason, I can’t reply to your reply below. So here goes (but I am not going to explain in depth the details you said you didn’t understand):
So, you are reviewing something you have no experience with at all? Yep, what else is new… Sigh. As I am a scientist, facts like these sometimes still take me by surprise.
Anyway, I’ve explored some more, and while I can’t say whether it is an automated feature that kicks in when a stock rises by more than, say, 60% within a specific time period or is only implemented manually in any situation when staff believe that they may be dealing with a pump and dump and then stop everyone from shorting the CFD in question, regardless of whether it actually is a pump and dump or for example the news that made the stock move is hard to find, I don’t think it’s targeted at specific traders even though it can certainly feel that way.
What I find very annoying at times is the dynamic spread. It’s annoying when you’ve set a stop loss and it gets triggered by a fluctuation in the spread instead of by a genuine price movement. If the price never actually moves beyond your intended stop loss, this can really suck. It’s good to be aware of this.
Also, I’d advise you to differentiate between trading and investing. They are not the same at all, even though a lot of people (and companies) use these two words interchangeably. Just sayin’… because if you do, your writing will become so much clearer.
Hello, many thanks for your review on trading 212. what do you make up of the following section in their FAQ?
Do I own the shares that I purchase?
We hold the shares you invest in on your behalf. Whenever you invest with Trading 212, your equity is held in custody at Interactive Brokers. They are the biggest broker in the world by the number of daily trades, holding 160B US dollars in client assets.
Hi Issam,
As long as you trust them to deposit all the money probably at IB, the money should be safe.
But there are two worrying facts: You cannot transfer your shares to another broker and they are regulated by an entity with a terrible reputation.
Many, MANY brokers don’t let you transfer shares out of them due to the way their backend is set up. Just for your education, I can tell you out of my own experience that neither IG nor Interactive Investor give you the option to change broker while still holding stock, you need to close every position before changing brokers.
Interesting, I was expecting most brokers to allow this. But it’s still a bad point in their favor compared to a broker like Swissquote or Interactive Brokers which let you transfer shares.
Thanks for adding the review.
I would like to mention some of its cool features as well.
————————————-
-You can make a practice demo account to test before deciding to go with real money:), that is a good feature too for new users.
-Pie feature(auto invest). It gives a good nice customize view over your stocks, ETC..etc.
-Details of every companies is clearly visible + shares info(net profit..etc)
-Notification on the market changes
-Free share from referal link
-Fractional shares
They keep on adding new ETFs, Stocks from time to time. Their Mobile app is very user friendly.
For nuance, Trading 212 used to be Commission free(100%)where you didnt need to pay even conversion fee(what led to its popularity). This conversion fee of 0.15% was recently added. Lending shares is what keeps it free commision I think.
As for adding Money, you can add freely using a debit card up to 2000CHF?then there is a small fee if you do debit/credit transfer. Bank transfer is free indeed. They do not charge any fees for withdrawal, you can withdraw your money anytime you like. Make sure to check if your bank if they incure a fee or not.
One thing I noticed is that when you recieve dividents it goes into you cash side(seperatly) so you can decide if you want to re-invest or keep it for withdrawal. For transfer positions out to another broker, they stated that it is not “YET” supported on their platform so my guess it will be one day possible?
Security wise, i think the reason why they halted onboarding is also to work on the legal aspect of trading in other juridictions. I think they stated in the forum prior that.
Never theless, it is one of many apps and in the end it is a personal choice. I wont say it is the best but also not the worst.
I am just wondering from tax reporting aspect how effecient it is for Swiss investors.
Cheers~
Thanks for sharing your experience on Trading 212!
Hi S
Tax reporting should be easy as long as you enter every transaction, at least in ZH the proper dividends are calculated automatically.
Have you experiences regarding transfer fees from Swiss account to T212 and vice versa?
I was surprised at the costs using a EUR account at T212.
Have you tried the IBKR GlobalTrader app? Very easy to use but I agree that the default Web interface is kinda complex.
On of the biggest downsides of this broker, except for the fact that is based in Cyprus, is that it doesn’t allow you to transfer positions out to another broker. This is a very serious risk, and why would you do business with a company that only accepts you in but not out?
So if you would want to transfer your positions in the future, you would have to sell all your assets, potentially generating insane taxes, just to be able to change your broker.
I wouldn’t trust anyone with this practices to take care of my money.
Excellent point about the lack of share transfers, I have added that to this article. This is indeed worrying!
212 has probably one of the nicest interfaces. If they don’t have all ETFs, it might be a good broker for your “satellite” investments as it is good practice to keep play money from your core.
However, don’t choose a CHF account as the transfer fees from Switzerland to the French bank in CHF are rather high and withdrawing cost me CHF 31! I assume if I had chosen an EUR account these fees would have been lower. BTW they also make with currency conversions.
Hi Eon,
Thanks a lot for sharing your experience! This is valuable!
So, they do not have a CH IBAN in Switzerland? That indeed sucks.
i am am 100% sure that there is not better customer support.They are one of oldes online exchange in world and second biggest.About security.This application is built on Java one of more secure languages.Interface is easy to use as well.
Hi,
I don’t agree with you here regarding IB at all. And I wonder if it’s only me having so many issues with IB. My personal experience with Interactive Brokers has been disastrous:
1. To make a transaction you need to click 50 times and confirm that you know what you are doing.
2. You are constantly being annoyed to provide documents for compliance reasons.
3. The platform is very unstable and causes many errors.
4. Transactions keep going wrong due to technical issues.
4. … and this is the worst: When I wanted to withdraw money, it didn’t work and I was held up for weeks. Interactive Brokers blocked my money and I couldn’t access it. The reason was that an API for verifying Swiss IBAN numbers was not working and my money was blocked due to the lack of verification.
While the fees look good and I’m (unfortunately) still with Interactive Brokers myself, I’ve only had negative experiences. The support is a disaster and technically just doesn’t work. You will be kicked out of the chat and have to explain everything again. I’ve certainly wasted some valuable DAYS (not hours) on IB. I waited for 2.5 hours on the phone until someone picked up. I would not trust my money to IB in the future.
I wonder if it’s only me having so many issues with IB?!
Hi Sime,
That’s indeed weird, we don’t share the same experience at all :)
1) I have never had to click more than once (and confirm once) for each of my monthly transactions.
2) I only got to submit these documents once
3) I Never had any errors and all my transactions went through.
Maybe I was lucky or maybe you were unlucky.
It would be interesting to hear from other people on the comments. But almost all people I know using IB are quite happy about it.
Never had to contact support myself, and never got asked to re-send any compliance documents. I never withdrew either, so I cannot comment on that.
But it’s true that every time you buy, you have to click 4-5 times in the standard user interface, for example, since “you don’t have updated market data”, only available in other UIs, or if you decide to put your investment in CHF (instead of number of shares), that it asks you to confirm that the number of shares you will get can be tricky to calculate exactly. Then the confirmation. Then, if you do it outside market hours, another confirmation that it will be executed the next day…
Not a big deal anyways.
Normally, you can click a button on these windows to not see them again the next time, no? This should remove the window alert for the next time.