Choosing between DEGIRO vs eToro can be a challenge, especially because traders are losing money rapidly due to bad investment decisions. If you must protect your assets and grow your investments, you need to select a good broker that aligns with your trading strategies.
This article compares eToro vs DEGIRO’s features, transaction fees, and security to equip you with the information you need to protect your assets and double your profit. Let’s dive in!
Key Takeaways
- eToro is famous for its Smart Portfolio and Social Trading features, allowing users to share insights and replicate trades from experienced investors.
- DEGIRO offers low trading fees for stocks and ETFs, as well as trading tools, to both short-term and long-term investors.
- eToro offers over 3,000 products, including stocks, cryptocurrencies, bonds, and commodities, with zero commission on certain trades. Meanwhile, DEGIRO supports two million investment products in stocks and commodities but lacks crypto and forex trading.
- For beginners, eToro is more user-friendly due to its intuitive interface and social trading features. DEGIRO on the other hand, is more complex and has limited educational resources.
DEGIRO vs eToro: Overview
When you start investing, selecting a good broker becomes important. Among the many options available, we have reviewed DEGIRO and eToro using factors like transaction fees, convenience, customer support, availability, and other features. Now, let’s dive into their differences to help you decide on the broker to use.
What is DEGIRO?
DEGIRO is a Dutch and German online brokerage firm established in 2008 by five former Binck Bank employees. The founders initially started by serving professional investors, but in 2013, DEGIRO expanded by offering retail investment accounts to European clients in the Netherlands. This move increased their growth and helped them become the top broker across Europe.
DEGIRO is headquartered in Amsterdam and is popular for offering investors low trading fees and a user-friendly platform. DEGIRO currently serves over 2.5 million investors across 15 countries, offering them thousands of exchange-traded funds (ETFs) and stocks to diversify their investment portfolio.
As DEGIRO continues to grow and expand its services, you can now trade on margin, commodities, and stocks. But there’s more. In 2021, DEGIRO improved its platform by adding ESG ratings and Analyst Views. Since they do not offer investment advice, these features give European investors better data to make independent and informed investment decisions.
DEGIRO operates under the supervision of the Netherlands Authority for the Financial Markets and is part of flatexDEGIRO Bank AG, ensuring deposit protection up to €100,000. Besides asset protection, DEGIRO offers access to the Tradegate Exchange, enabling pre-market and after-hours trading allowing users to react quickly to market changes.
Pros of DEGIRO
- Low fees
- Large selection of ETFs
- Easy to use and available on mobile and web
- Regulated by BaFin (Germany) + AFM (Netherlands).
- No minimum deposits are required to open an account.
Cons of DEGIRO
- Transferring shares is expensive
- Limited research tools compared to eToro
- Customer support can be better
- Connectivity fees
- Does not support crypto investment
- No access to United States ETF
What is eToro?
eToro is a leading multi-asset investment platform founded in 2007, designed to make trading accessible to everyone. It allows users to trade a variety of assets, including stocks, cryptocurrencies, ETFs, options trading, and contracts for difference (CFD). This online broker provides features like CopyTrader to users to help them mimic the trades of successful investors.
Besides copy trading, the multi-asset platform also offers additional educational and financial tools through the eToro Club. eToro Club is a tier-based membership that gives users more online trading tools, valuable insights, and access to industry VIP events based on their tier level.
With 35 million users globally, eToro promotes a community-driven approach to investing, offering tools for both beginners and successful traders. They even offer sign up bonuses for first time users and additional rewards for traders who invite others to join.
Based on previous experience, eToro advertises ETF offerings, but in reality, you are getting CFDs for non-EU ETFs. This and the need to go through eToro Money to withdraw or add funds has raised concerns among users, especially those who are unfamiliar with the process.
Pros of eToro
- Social trading
- You can transfer your crypto holdings. But there are no crypto-to-crypto trading pairs.
- Free stock and ETF trading
- Supports crypto investments.
- Comprehensive educational resources, trading videos, demo accounts, and other financial tools for all investors.
Cons of eToro
- High spread fees for cryptocurrency trading.
- Minimum deposit of at least $10 to start trading.
- eToro only has USD as the base currency.
- Customer support can be better.
- eToro is not as transparent as DEGIRO. The online broker makes a lot of changes to its policies and fees without the prior information.
DEGIRO vs eToro: Features Comparison
Even though DEGIRO and eToro offer similar services, each of these brokers has features that differentiate them from other brokers. Let’s look at the features you should expect when you open an investment account with eToro.
- Smart Portfolio: eToro has ready-made investment strategies that allow you to diversify your portfolio with one click.
- Social Trading: eToro offers social trading, which allows a community of over 20 million traders and investors to interact, decipher price alerts, and share insights and ideas.
- CopyTrader: eToro’s copy trading feature is similar to the crypto copy trading interface on crypto exchanges. This feature enables traders to copy the strategies and investments of advanced traders on the platform.
- Multi-asset investment platform with access to 3,000+ financial assets.
- User-Friendly Interface: Designed for both beginners and experts, it provides a seamless trading experience.
- Demo Accounts: The platform offers a virtual trading function that provides you with a free $100,000 demo account to help you practice without risk.
On the other hand, these are features you can expect with a DEGIRO investment account:
- Wide Market Access: Provides access to over 50 exchanges in 30 countries, giving users access to extensive global investment opportunities.
- User-Friendly: DEGIRO has intuitive web and mobile platforms suitable for all investors, notwithstanding their experience. DEGIRO even offers tools like one-click trading and provides traders with real-time data.
- No Minimum Deposit: Users can open an account without worrying about a minimum deposit limit.
- More Investment Products: DEGIRO offers 2 million investment products and various ways to trade, including combination orders and margin trading. This makes it a great choice for long-term investors.
eToro has more features and financial tools for learning than DEGIRO, but DEGIRO has more investment products and no minimum deposit requirement. You can compare these features and opt for any of these brokers that meet your investment needs.
DEGIRO vs eToro: Fees
Let’s compare DEGIRO vs eToro fees for deposits, withdrawals, conversion, etc., to help you determine how much it will cost to use any of these platforms for active investment.
- Transaction Fees: eToro offers commission-free trading on stocks and ETFs, while DEGIRO charges transaction fees except for its core selection of ETFs, which costs €1 per trade.
- Fees for Investing in Crypto-related Products: For buying and selling crypto, eToro charges a 1% fee on all transactions, which is added to the price you see when you open or close a position. Conversely, you cannot invest in crypto on DEGIRO because it runs on a DMA (Direct Market Access) model, not a Market Maker.
- Deposit and Withdrawal Fees: DEGIRO has free deposits and withdrawals, whereas eToro charges $5 per withdrawal but zero fees on all deposits.
- Connectivity Fees: DEGIRO charges an exchange connectivity fee of €2.50 per stock exchange yearly. On the other hand, eToro does not charge traders any connectivity fee.
- Inactivity Fees: eToro imposes a $10 monthly inactivity fee after one year, while DEGIRO does not have this fee.
- Currency Conversion Fee: eToro charges 1.5% or 3.0% for currency conversions depending on the currency, making it more expensive for non-USD deposits compared to DEGIRO.
With both exchanges offering varying fees, like the connectivity fee on DEGIRO and the inactivity fee on eToro, it is difficult to determine which one is cheaper. However, both platforms are affordable compared to other online brokers in the stock market.
DEGIRO vs eToro: Minimum Deposit and Withdrawal
For deposits, eToro requires a minimum of $200, but it can be as low as $10 for US and UK traders and up to $10,000 for Islamic accounts or Israeli residents. On the other hand, DEGIRO has no minimum deposit on all account types, so you can start trading with any amount.
When using eToro for withdrawals, the minimum amount you can take out is $30, and this transaction attracts a $5 fee for each withdrawal. But DEGIRO has no minimum withdrawal amount and no internal withdrawal fees. Therefore, DEGIRO beats eToro when comparing minimums.
DEGIRO vs eToro: Supported Coins
eToro supports 20+ different cryptocurrencies in the US and 100+ for international traders, allowing users to trade popular coins, including Bitcoin (BTC), Ethereum (ETH), Bitcoin Cash (BCH), XRP (XRP), Cardano (ADA), Solana (SOL), Dogecoin (DOGE), Cardano (ADA), Polkadot (DOT) and more.
In contrast, DEGIRO does not offer any cryptocurrencies for trading or investment, focusing instead on traditional stock broking services. Therefore, if cryptocurrency trading is a priority for you, eToro is the clear choice. However, if you are only looking to store or trade cryptocurrency, consider using zero-fee crypto exchanges or other crypto wallets or exchanges with lower fees.
DEGIRO vs eToro: Supported Countries
DEGIRO operates majorly in over 30 countries, within the European Economic Area (EEA), including Germany, Amsterdam, Switzerland, France, and the Netherlands. However, it does not accept clients from the United States and has temporarily suspended services in the United Kingdom due to regulatory issues.
On the other hand, eToro has more reach than DEGIRO, offering services in 100+ countries globally, including the US and the UK. While eToro is accessible to a more global audience, US traders can only trade Bitcoin, Bitcoin Cash, and Ether on the platform.
However, if you are a resident of Hawaii, Nevada, or New York, you cannot trade or invest in crypto on eToro like the other 43 states. The only service available to traders in these three states is the virtual trading feature (demo account).
DEGIRO vs eToro: Security & Regulations
DEGIRO and eToro are regulated brokers, but they differ in their regulatory frameworks. DEGIRO is regulated by BaFin in Germany, primarily serving the EU market, while eToro is authorized and regulated by multiple entities due to its availability in more countries. Here are the bodies that regulated and authorized eToro in various regions:
- Financial Conduct Authority (FCA) for eToro (UK) Ltd.
- Cyprus Securities Exchange Commission (CySEC) for eToro Europe.
- Malta Financial Services Authority (MFSA) for eToro Money Malta Ltd.
- Financial Services Regulatory Authority (FSRA) for the Middle East.
- Australian Securities & Investments Commission (ASIC) authorized and regulated eToro AUS Capital Ltd.
eToro operates with these regulations because it serves many countries, and all of these countries require them to comply with several laws. So, there will be different regulations and licenses as you see above based on where your account is hosted.
In terms of security, eToro offers negative balance protection on retail investment accounts, enhancing its security profile. Additionally, eToro and DEGIRO separate all traders’ funds from corporate assets. This means that your stocks, bonds, and crypto in eToro’s case are in a subsidiary company. So if DEGIRO or eToro goes bankrupt, your assets will be kept safe.
DEGIRO offers investor protection up to €100,000, whereas eToro provides coverage up to £85,000 through the Financial Services Compensation Scheme (FSCS). While both brokers offer optimum security, there is a shortcoming of eToro for traders investing in US ETFs.
As discussed earlier, US ETF stocks are held as CFDs and not real stocks. Trading CFDs is a high-risk investment because they are not as regulated or protected as real stocks. So, if eToro goes bankrupt, your CFD trading assets will not be protected.
Final Thoughts: Which is Better?
Security, regulations, licensing, trading fees, and product offerings are all crucial for decision-making when choosing between eToro vs DEGIRO. eToro has more features than DEGIRO, but these features may not matter if you do not need them.
Another compelling selling point for eToro is its cryptocurrency trading option, access to international markets, zero commission fees, copy trading function, and no connectivity fees. However, eToro may not be ideal if you do not have USD in your bank account to deposit into your eToro balance.
If you decide to convert your local currency to USD to trade on eToro, you will spend more money than you would normally need on DEGIRO. This is not a problem for European traders because DEGIRO is dedicated to serving their regions, and it supports CHF deposits.
Besides that, DEGIRO is part of the publicly listed FlatexDEGIRO Bank AG so your assets are better protected. You also stand a chance to enjoy free deposits and no expected minimum on deposits and withdrawals for all assets. In the end, your choice of broker depends on your needs and strategies.
