Title

DEGIRO Broker Review

Review By: Alan LittleReview Updated: 2021-02-10

Address: DEGIRO Bank, Dutch Branch, Rembrandt Tower - 9th floor, 1096 HA Amsterdam , The Netherlands

etfstocks

Spread

N/A

Max. Leverage

1:5

Deposit Protection

Yes

Min. Deposit

£0

Spread

N/A

Max. Leverage

1:5

Deposit Protection

Yes

Min. Deposit

£0

Our Overall Rating

Rating4.5

Deemed authorised and regulated by the Financial Conduct Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

One of the most reliable ways to measure a broker are the number of clients on its platform. When you consider that DEGIRO has increased from 200,000 clients back in 2017 to over one million today, it’s clear that they are well on the way to becoming one of the largest retail stock brokers in Europe together with flatex DEGIRO. It’s strong in terms of fundamental concerns such as regulatory approval. On top of that is a very user-friendly platform which gives its clients an exceptionally cost-effective way to trade the markets.

It’s possible to trade a wide range of instruments at DEGIRO. Stocks, options, bonds and warrants are all available but the firm excels in terms of its ETF (Exchange Traded Fund) product range.

DEGIRO doesn’t try to be everything to everyone. In some areas it demonstrates a no-frills approach. This means some features that might be found on other platforms are not found here. These omissions might not be noticed by all but the associated cost savings probably are. DEGIRO is very happy to pass on those cost savings to its clients in the form of very low fees and charges.

DEGIRO was set up by former employees of another broker. They took the best aspects of traditional broking and added a range of neat new features. The platform has a strong focus on European markets and clients and this is reflected in the strong emphasis on client protection.

Head-quartered in the Netherlands the firm holds its cornerstone regulatory license with the tier-1 regulator the Dutch AFM (Netherlands Authority for the Financial Markets) and DNB (De Nederlandsche Bank).

DEGIRO is also registered with regulators of other countries, for example the Financial Conduct Authority (FCA) in the UK where it operates under number 595455.

The popularity of the broker with traders is mirrored by its impressive collection of industry awards. To date it has won no less than 66 international awards in a range of categories including.

  • Best Stockbroker – 2019 – Rankia (Spain)
  • Best Customer Service – 2019 – Rankia (Spain)
  • Best Discount Broker – 2020 – Broker Chooser (UK)
  • Best Low-Cost Stock Broker – 2018 – Financial Times and Investors Chronicle (UK) Investment and Wealth Management Awards

 

DEGIRO offers a wide range of tradeable instruments and a flexible, intuitive platform with easy-to-navigate mobile trading, so you can trade from anywhere at any time. There is an extensive knowledge centre and Investor’s Academy to help clients advance their education, along with a blog sharing ideas and insights for investors at all levels.

The broker holds all client funds in segregated accounts and the Dutch Investor Protection Scheme applies to all account holders; DEGIRO clients’ assets are segregated in separate entities and thus protected against insolvency of DEGIRO. In the unlikely event that the segregated assets cannot be returned to clients, DEGIRO falls under the German Investor Compensation Scheme, which compensates any losses from non-returned assets up to 90% (with a maximum of EUR 20,000). Furthermore, any money deposited on a DEGIRO Cash Account with flatexDEGIRO Bank AG will be guaranteed up to an amount of EUR 100,000 under the German Deposit Guarantee Scheme. Information about the German Investor Protection Scheme and the German Deposit Guarantee Scheme can be found in English on the BaFin website here.

Commissions & Fees

Rating

DEGIRO offers traders some of the lowest fees in the market and the pricing schedules are relatively transparent. There are for example 200 commission-free ETFs available to trade (conditions apply).

DEGIRO Trading Platform Features

There are areas where the pricing schedules does need some close analysis. In an effort to drive prices down and allow traders to pay for what they actually use DEGIRO breaks some fees out to a granular level.

The upside of this is that traders operating low cost strategies don’t unintentionally subsidise the trading of others. This is to be welcomed and means DEGIRO stands out from the crowd. The downside is that a full cost-benefit analysis of a trade requires careful consideration of the T&Cs.

DEGIRO does explain the details of what fees apply where, it just takes some getting used to. It might mean that there is some extra work required to build a complete estimate of costs on a trade, but there is something reassuring about the pay-to-use approach.

One example is Connectivity Costs. If you want real-time rather than delayed pricing, then there is a fee.

Another example of its approach to fees are the fee surcharges that came into place in August 2018. When the firm faced extra costs due to a new piece of regulation being introduced the platform applied. Where applicable, the surcharges are to be applied in addition to the standard fees. DEGIRO explained that the surcharges would be in place for a limited period of time and that it was reorganising its processing structures in an effort to remove the fees completely.

DEGIRO Costs Comparison

Such transparency not only means pricing is fair but confirms the company’s reputation as a cost-effective broker. The brokers with the most confidence about their position in the market are often the ones most willingly to offer a clear and detailed breakdown.

The areas where the pricing schedules do become a little bit more complicated do need some consideration. In most cases DEGIRO appears to be trying to squeeze out even lower rates for their clients; in others they explain the details of what extra fees they might have to pass on and why.

There are connectivity costs relating to trading outside of your home market. This is applied on a pay-per-use basis so the costs of trading on other exchanges apply to the traders actually executing trades in it. As a result, the costs of one person’s trading are not shared across all users, but if you are looking to cover a range of markets this will need some research.

The Fee Surcharges that came into place in August 2018 demonstrates DEGIRO’s approach to pricing. Faced with extra costs due to a new piece of regulation the platform has applied a surcharge for fees that will apply for a maximum of 18 months. Where applicable, the surcharges are to be applied in addition to the standard fees. DEGIRO is in the meantime looking to reorganise its processing structures so that the additional charges can be removed. It appears it is very keen to gain a reputation as a cost-effective broker and on keeping its headline rates as low as possible.

Platforms & Tools

Rating

The DEGIRO platform is intuitive and user-friendly. Developed in-house, it has streamlined functionality, which opens the door to a high-quality trading experience. The layout of the execution monitor is easy to follow and allows you to build trade instructions which take advantage of a range of risk-management functions.

There are various order types to choose from so you can execute at market price or build an instruction which incorporates a greater degree of patience. It’s also possible to look into the markets and check up to five levels of market flow.

The Fast Trading function is particularly useful. It’s a shortcut that takes you directly to the trading interface so that you can quickly respond to market moves.The markets available include stocks, bonds, options, warrants and futures. There are more than 50 global exchanges to trade and in most instances DEGIRO provides execution that is direct to market rather than through a local subsidiary.

The number of markets to trade when you opt for DEGIRO is one of the widest available in Europe.

DEGIRO favourite trading instruments app

The platform is tailored towards traders with a longer investment time horizon.

The Interactive Graph function allows for customisation of charts. There are a range of indicators to choose from and the available selection leans towards signals such as dividends and corporate actions. Two extra tabs ‘Key Figures and ‘Documents’ are part of the dashboard screen and display information useful to those with strategies based on fundamental analysis techniques.

There is also a monitor giving a numerical representation of price action and core details such as ISIN code identifiers to ensure trades are executed in the intended instruments.

The platform is streamlined in nature and easy to use.  Price history on all the instruments goes back quite a long way and it was very easy to move from the charting screen through to trade execution.

DEGIRO operates across many different territories, and it is possible to deal all over the globe in a variety of markets. The brokerage offers access to over 50 different exchanges in around 30 countries, including European, North American and Asian exchanges. Trading is available whenever the markets are open, and there is a section on the website showing exactly when the international exchanges open and close and when stock market holidays occur around the world.

The company offers access to a range of financial markets, asset classes, and instruments, including shares, investment funds, futures, bonds, options and exchange-traded funds.

Order types available vary between the different markets, with most order types available for shares, ETFs and bonds, but only day orders and market orders available for investment funds.

Market orders are routed either Direct to Market or via the Morgan Stanley Smart Order Router (SOR), depending on the product being traded. Day orders are routed via the SOR when the Morgan Stanley SOR is used for a product and good-till-cancel (GTC) orders are routed direct to market.

Customer Service

Rating

DEGIRO offer telephone and email customer support and have picked up heap of awards over several years.

During our testing we found the telephone response times to be more than satisfactory. The telephone help desk is only available during extended office hours Monday to Friday but the staff were professional, informed and resolved our queries on the first call. We didn’t experience any problems with accessing the help desk, even during peak hours.

Degiro Customer Service 1

There is no toll-free number to the Denmark based call centre so UK clients face charges for making an international call. This is in line with the firms approach of making users pay for what they use but might be an issue for some.

Degiro Customer Service 2

There is no Live Chat function but the FAQs is visually appealing and has the feeling of being very well thought out. Some brokers have FAQs that are circuitous and frustrating. That is not the case with DEGIRO. Working through the library of hints and tips helped our testers resolve most of their issues.

Research

Rating

DEGIRO has increased the amount of research and analysis material it offers its clients. This is a welcome change as the firm previously offered little in terms of research.

Degiro Research 1

Another positive feature is that the ‘How to…’ style materials are clearly segregated from the ‘What to …’ style articles.

The Investor’s Academy is a very user-friendly hub of investment knowledge. Using plain language, the broker explains how investing works, which products you can invest in, and what strategies you can use.

The Strategies section is a great resource for trading and investment ideas. Broken down into Technical Analysis, Fundamental Analysis, Options Strategies, Compound Interest and Dollar Cost Averaging. This offering represents an opportunity for novice and intermediate investors to develop their skills and improve their trading performance.

Degiro Research 2

The blog section of the site offers an insight into up-to-date trading opportunities. The articles are high-quality and a step up from the offering found at a lot of other brokers. Some of the pieces offer in-depth analysis of trading ideas and are institutional grade quality.

Degiro Research 3

Ease of Use

Rating

It might be that DEGIRO’s decision to not support demo accounts is another part of its passion for cost-saving. Even virtual accounts require time and money if they are to be supported properly.

Everyone likes low-cost trading and the growth in user numbers suggests the lack of a demo account doesn’t stop people signing up but it does make the firm stand out, and possibly not in a good way.

The only way to get onto the DEGIRO platform is to go through the full registration process. This is actually a very user-friendly experience. The questions the broker asks you about your investment experience and objectives are in line with other regulated brokers.

Degiro Ease of Use 1

It doesn’t cost anything to complete the online forms and the process takes minutes to complete. Your i.d. documentation will usually be verified and registration complete in less than 24 hours. Any factors that result in your application not being processed automatically can result in a delay of up to two days whilst human intervention takes place.

Degiro Ease of Use 2

 

The processes for depositing and withdrawing funds into accounts are clearly laid out. This is a positive feature as ‘hidden’ charges are becoming more common.

  • DEGIRO charges no fees to withdraw or deposit funds via manual money transfer
  • There are no annual, maintenance or service charges and even inactive accounts do not incur fees.
  • DEGIRO will only accept payments directly from the bank account which is associated with your account. Any transfer sent from a third-party bank will be returned to the account it was sent from.
  • If you do not immediately use funds paid into your DEGIRO account, the money will be automatically invested in one of the Money Market Funds. This is done via the standing order completed during the registration process and is a level of service associated with institutional grade investing.
  • Withdrawals typically take 2–3 working days to process.
  • In line with regulatory principles relating to segregated client funds, any money paid into your account are processed by the custodian entity (Stichting DEGIRO).
  • When transferring funds into your DEGIRO account, all transfers must be made in the base currency of your account. In the UK this is GBP and Ireland it is EUR.

 

Keeping payment options to the minimum and requiring base currency to be in the native currency of each country helps keep costs down. Fees associated with converting home currency to another one soon stack up.

Degiro Ease of Use 3

Depending on where you live, you can access a DEGIRO domain especially tailored to your country and language.

Mobile Trading

Rating

The mobile version of the platform is a seamless mirroring of the desktop version.  Available in free to download Apps for Android and iOS or the browser version, the layout provides an easy way to keep in touch with the markets.

Degiro Mobile Trading 1

The Apps support real-time quotes, a range of order types, market analysis and new reporting. Account administration can also be completed using handheld devices with portfolio and profit & loss reports all accessible on the move.

Auto-time outs and two-step verification to log on (through the use of a 5 digit code) are reassuring security orientated add-ons.

Degiro Mobile Trading 2

The professional approach to mobile trading has been well received. As well as a range of industry awards the Apps have a user-approval rating of 4.5 / 5 at both the Google Play Store and Apple Store.

Robo Trading

DEGIRO does not support automated, robo, copy, or social trading.

Crypto Currency

DEGIRO do not currently support trading in cryptocurrencies.  When we contacted them there was no indication that this situation would be changing in the foreseeable future.

Regulatory details

flatexDEGIRO Bank Dutch Branch, trading under the name DEGIRO, is the Dutch branch of flatexDEGIRO Bank AG. As a German regulated bank, flatexDEGIRO Bank AG is primarily supervised by the German financial regulator, the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin). The Bafin is the German equivalent of the Dutch Authority for the Financial Markets (AFM). In addition, flatexDEGIRO Bank AG falls under the indirect supervision of the European Central Bank (ECB). In the Netherlands, the Dutch Central Bank (DNB) is tasked with integrity supervision of DEGIRO and DEGIRO is subject to conduct supervision by the AFM. DEGIRO’s registration in DNB’s public register can be viewed here.

Securities Lending

When you become a client, you give DEGIRO the right to lend out your securities. This is done to be able to facilitate other market participants who are looking to go short. DEGIRO receives revenue for loaning out securities and there is a degree of counterparty risk involved.

There are checks and balances associated with this rehypothecation process. Deposits and security of assets come into play and it is a practise pursued by all the big investment banks because it is a reliable source of revenue.

Final Thoughts

DEGIRO started out as a wholesale broker and that shows in terms of the very attractive pricing it offers its clients. The firm has thankfully branched out to offer retail clients a taste of their specialist service.

The year-on-year growth in number of investors using DEGIRO has been as high as 45% in recent years. This is important as it reflects the firm has critical mass, but more so because the trading community is very good at spotting a good deal.

It doesn’t cost a broker much more to support 200,000 or 1,000,000 clients. As a result, there will be economies of scale associated with their ballooning client base, which suggests that the low-cost approach is here to stay.

If your approach to trading fits in with the DEGIRO structure, then you are primed to access the markets via one of the most cost effective routes out there.

The broker has recently upgraded other aspects of its business, particularly the research offering. The changes it has introduced have all been well thought out upgrades meaning that DEGIRO now offers a high-quality, low-cost way to access the markets.

Note: Investing will always involve a level of risk. You may lose (a part of) your deposit. It is our position that you should only invest in financial products matching your knowledge and experience.

Deemed authorised and regulated by the Financial Conduct Authority. The nature and extent of consumer protections may differ from those for firms based in the UK. Details of the Temporary Permissions Regime, which allows EEA-based firms to operate in the UK for a limited period while seeking full authorisation, are available on the Financial Conduct Authority’s website.

FAQ

Our DEGIRO review has everything you need to know. Every brokerage aspect is covered in detail to help you decide if they’re right for you.

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