DEGIRO Review

Top Takeaways for 2020

After reviewing DEGIRO, here are our top findings (Investing can be rewarding but it is not without risk. You can lose (a part of) your deposit.):

• Founded in 2013, DEGIRO has more than 450,000 customers in 18 countries. DEGIRO charges some of the lowest commission fees for bonds, gilts, ETFs, and shares. Fund trading at DEGIRO costs more than the industry average.
• As a result of DEGIRO's focus on low prices, the broker offers practically no fundamental research beyond basic company information. Also, DEGIRO does not offer ISA or SIPP accounts.
• DEGIRO's charting platform and mobile app are average at best, offering minimal features and functionality focused primarily around placing trades.

Overall Summary

Commissions & Fees

DEGIRO's fees for trading individual stocks in the UK, Europe, and the United States are significantly lower than most offerings from other major UK online brokers.

Although the costs of trading are so low, there is an absence of any significant fundamental research and no educational content. Nevertheless, a frequent trader or an investor seeking a "no-frills" option would likely be attracted by DEGIRO's very low fees.

Stock pricing: The fee for trading individual shares in the UK is £1.75 + 0.014% per trade, with a maximum charge of £5.00. For US markets, the cost is €0.50 + USD 0.004 per share (but with no maximum), while for European markets, the charges range from €2.00 + 0.118% up to €10.00 + .0168%. There is also an annual charge of €2.50 per the calendar year per exchange traded on (outside of LSE).

Fund pricing::Fees for trading funds range from €7.50 plus 0.10% for exchange-listed investment funds up to €75.00 plus 0.10% for non-exchange-listed investment funds. There is also an annual charge for holding unit trusts/funds (a custodial fee of 0.2% per annum).

Market data: By default, customers receive free delayed market data for available exchanges. To access real-time streaming market data, customers must subscribe to each exchange individually, by paying between €2.50 - €10.00 per month.

Bottom line: Traders focused on stocks will appreciate DEGIRO’s industry-leading fees. Traders with a mixed approach of stocks and funds should check out FinecoBank, which offers competitive commissions for stocks and better commissions for funds.

Scenario pricing: When calculating annual share dealing costs, trading frequency and account balance are the two most important factors to consider. Assuming a £30,000 portfolio in a traditional, taxable share dealing account, here are four scenarios of how much DEGIRO would cost based on trade frequency:

• 5 deals per year (£5,000 trade value) = £12.25 (£2.45 x 5)
• 12 deals per year (£5,000 trade value) = £29.40 (£2.45 x 12)
• 36 deals per year (£5,000 trade value) = £88.2 (£2.45 x 36)
• 120 deals per year (£5,000 trade value) = £294 (£2.45 x 120)
• 3 fund deals per year (£5,000 trade value) = £67.5 (€7.50 plus 0.10%) + (.20% service fee) x 3

Platforms & Tools

DEGIRO has a minimalistic platform, trailing top competitors such as Saxo Markets and Interactive Brokers.

Charting: DEGIRO has improved its charting over the last year. Pop-out interactive charts now allow traders to utilize 13 different indicators, nine drawing tools, and multiple chart types and views. Traders can even save chart templates. While it is a bit annoying to open a new web tab to access these features, it is still an improvement.

Mobile Trading: DEGIRO's mobile app, like the desktop platform, is basic in terms of research offered. Research aside, the app is user-friendly and straightforward to navigate. The ability to create watchlists (described as "Favourites" on the DEGIRO platform) and trade directly from the mobile app is helpful. The Favourites automatically synchronise between the website and the mobile app (which is not the case on some other apps competitors offer). Although charting capabilities are improved, pulling up an interactive chart takes you out of the app into a third-party website, which is a nuisance.

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Research

There is little to no fundamental research on the DEGIRO platform. Minimal company information is available on individual shares in the key figures section. For funds you can download key information documents, a prospectus, and fact sheets. However, no proprietary research or third-party analysis is available.

DEGIRO does offer some general market news, although the news available for individual shares does not compare to brokers such as Hargreaves Lansdown and Interactive Brokers.

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Offering of Investments

DEGIRO offers its clients access to a broad range of investments, including stocks, funds, bonds and gilts, ETFs, options, and futures. DEGIRO currently provides access to 30 international exchanges, providing either Direct to Market access or Smart Order Routing (SOR) through Morgan Stanley. All 30 exchanges lie within Europe, North America, Asia, and Oceania.

Currently, DEGIRO offers only a general trading account. Unfortunately, UK clients cannot open an Investment Savings Account (ISA) or join a personal pension saving scheme (SIPP). The cheapest UK brokers that offer ISA/SIPP accounts are IG (for shares) and Lloyds Bank (for funds).

Education

While DEGIRO's educational offering is limited, the content it does provide is of high quality. Built internally by the company, DEGIRO offers ten educational videos through its Investor's Academy, which covers shares trading and the broader investment journey. Aside from the ten videos, DEGIRO has a couple additional videos depicting things like how to buy a stock and how to buy a bond.

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Final Thoughts

If you are an investor looking for a low-cost way to trade stocks, DEGIRO is a great choice. The trading platform is basic, but it is efficient and straightforward to use.

However, if you are a longer-term investor and require strong fundamental research, cheap funds trading, or are looking for an ISA or SIPP account type, DEGIRO does not deliver.

About DEGIRO

Established in the Netherlands in 2013 by five previous Binck Bank employees, DEGIRO offers a low-cost alternative to the current range of brokerage platforms. Low trading fees and charges, alongside an advanced trading platform, have seen DEGIRO grow significantly (it is currently active in 18 countries). According to its website, the company has over 450,000 customers.