Investing with Low Cost broker Degiro

Who are Degiro?

Degiro was founded in 2008 in the Netherlands and is Europe’s fastest growing online stockbroker. They boast 150,000 customers facilitating over €30 billion worth of transactions each year. Degiro launched in Ireland in 2015 and has continued to perform well with over 6,000 customers exceeding the number of investment customers Rabo Direct had before they chose to leave the market. Degiro operates across Europe under the regulatory capital supervision of the Dutch central bank and under the general regulatory scope of the Netherlands authority for financial markets. They have been well covered in the Irish press including Irish Times, Independent, Examiner as well as forums such as boards.ie and askaboutmoney.com

What does Degiro do?

Degiro is an execution only stockbroker. This means they only facilitate trades and do not offer financial advise or suggest stocks/ETFs to invest in. It is up to the individual customer to do their research and decide which products to invest their money in. Degiro offers a wide range of investment options depending on your account choice including stocks, shares, bonds, trackers, options, futures.  They offer very low fees and a simple trading platform.

Custody -v- Basic/Active/Trader Accounts

Degiro offers four different types of accounts Custody, Basic, Active and Trader accounts. If you are new to trading I strongly suggest you start off with a Basic or Custody account and do plenty of research into futures/options/shorting before taking the plunge. I know a few guys who got burnt by jumping into the deep end without knowing what they were doing.

When signing up to Degiro they are very clear about the difference in Custody v Basic/Active/Trader account. With a Custody profile the securities are held separately and are unable to be loaned out to third parties. With a Basic account Degiro may lend your securities out this could result in you loosing money but it is very very unlikely. I found a post on boards.ie that explains it a lot better than I can so I recommend reading it.

Signing Up

Signing up is very straight forward and can all be completed online. It took me less than 20 minutes to get everything filled out online and initiate the SEPA transfer to Degiro. You need to wait for the transfer to clear into Degiro before the account will be fully active. After 2 days I was all set to invest. I noticed some people having concerns about supplying your PPS number. You shouldn’t be worried about this, degiro are required like all stock-brokers to obtained the PPS number.

Depositing Funds

When signing up to Degiro you need to enter in the IBAN of your nominated bank account. All deposits to your Degiro account must come from this IBAN in order to be assigned to your account. In my experience it takes one working day for a transfer to clear into your Degiro account. There are no fees for SEPA transfer into Degiro. Customers with AIB or Permenant TSB can use Trustly for instant deposit to Degiro. Each instant deposit costs €1.

Fees

Degiro offer very low fees compared to traditional brokers. There are no account opening or monthly maintenance fees. Below are the fees you are likely to encounter if you are just buying stocks/shares/bonds/ETFs and not doing more complicated transactions such as shorts.

Exchange Connection Fee

€2.50 per exchange you transact on. This fee does not apply to Irish Stock Exchange. For example, if you buy stocks on the Irish stock exchange, London stock exchange and the New York stock exchange you will be charged €5 (2x €2.50) per year regardless of the number of times you transact on each exchange. This fee is charged monthly approximately 20c per month per exchange.

Currency Conversion Fee

Your Degiro account will be in Euro. If you are purchasing products denominated in a different currency, the conversion will happen at the daily exchange rate + a 0.10% currency exchange fee

Dividend Processing

Many ETFs and Stocks will pay out dividends. The fee charged by Degiro to process these dividends depends on the type of account you have. If you have a custody account with Degiro the fee is €1.00 + 3% of dividend. The maximum fee is 10% of the dividend amount.

If you have a Basic/Active/Trader account there is no fee for dividend processing.

Real Time Prices

As standard, the prices you see on Degiro are delayed by 15 minutes. Should you wish to have real time prices the fee depends on the exchange. They range from €1.50 per month to €21 per month.

Transaction Fees

Most transactions on Degiro attract fees. Trading on the Irish Stock Exchange cost €2.00 + .04%. Purchasing €1,000 Bank of Ireland shares would cost €2.40 with Degiro. This is much lower than the traditional brokers in Ireland who could charge €100+ for this transaction.

Trackers/ETFs cost €2.00 + 0.02% to trade with Degiro. However, Degiro offer over 700 ETFS that are free to purchase. Every calendar month you can make one free trade (buy/sell) per free ETF. Additional trades of the same ETF in the same direction (a buy must follow a buy) will be free as long as the volume of the transaction is over 1,000USD/EUR. If you complete a trade of the same ETF in the opposite direction for example selling after already buying that month the free trades no longer apply.

Screenshots

Degiro Market Overview Screen

 

Degiro Product Overview

Degiro Buy Screen

 

Degiro Portfolio Overview

Overall opinion

I’m by no means a investing guru. I stick mainly to non UCIT ETFs (for tax reasons) and buy shares in the odd company. I’ve steadily increased the number of investments with Degiro as I find everything easy to use. I would recommend Degiro to investment newbies. Its straightforward and best of all the fees are so low investing with only small amounts is no longer cost prohibitive.

4 comments

  1. are there any online resources to explain ‘Non UCIT ETFs’ that you would recommend, I’m not finding much that explains the implications for tax purposes in any detail, any info would be appreciated. Really like the blog also, nice work.

  2. It is 2€ + 0,02% fee for ETFs, not 200€ + 0,02% 🙂 and the link to free ETF list is not correct.

    Their support is terrible though, usually takes 2-4 days for an answer, and sometimes they don’t answer at all.
    Free ETF search is terrible too, the list is on PDF, so you can’t sort by any criteria. If you search for an ETF through their system, there is no info if the ETF is free and whether it is free on all of the exchanges you can trade on or only in the exact given exchange… The problem is that if you have to buy free ETFs via different exchanges then you have to pay Exchange Connection Fee for every of them.

  3. They are after removing Vanguard US ETFs from their platform so its mostly UCIT ETFSs that are available now. Any recommendations of which ones to purchase now? I dont want to buy UCIT ETFs because of the Tax that I will have to pay here in Ireland.
    Thanks

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