DEGIRO is a large stockbroker conglomerate focused on the European market, while the smaller Trading 212 is a bit of a hybrid – part traditional stockbroker and part CFD provider. It tries to appeal to both worlds. Both firms are headquartered in London, with FCA and additional regulatory oversight from other regional bodies.
Investing involves risks. You can lose (a part of) your deposit. We advise you to only invest in financial products which match your knowledge and experience.
CFDs are complex instruments and come with a high degree of risk of losing money rapidly due to leverage. 77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
DEGIRO is a Dutch company, founded in 2013 with headquarters in Amsterdam. It is a subsidiary of flatex AG, a German stockbroker and bank traded on the German SDAX exchange. It has achieved a great deal by slashing commissions and traditional costs for being an online brokerage. It is heavily regulated. The European marketplace is its home, with 2 million+ customers, and the merger with its parent, though recent, has been completed successfully. It claims to be the largest online stockbroker in the European Economic Area (EEA).
Founded in 2004 in Bulgaria, Trading 212 has since moved its headquarters to the UK. It complies with the FCA, CySEC, and regulators in Bulgaria. It has gained immediate attention by eliminating commissions on stock and ETF trades. Revenues quadrupled in 2021, creating, as a result, a backlog in new account additions. Trading 212 is small in comparison to DEGIRO, but it competes along the same lines. It also offers CFD trading on thousands of instruments, but the FCA has curbed such trading in the UK by retail traders. It claims to have 1.5 million clients with over £3bn in assets managed.
DEGIRO, like a bank, makes opening an account free and easy with no minimum deposit. Funding your account is also like a bank – only by direct deposit or wire transfer. Trading 212 is more like a forex/CFD broker, offering convenient deposit methods with a minimum deposit of only one unit of GBP or EUR.
Retail investors across the EEA have flocked to DEGIRO since the firm focused heavily on slashing fees and scaling commissions down to zero. There may still be a pass-through of charges from any of the 50+ exchanges you can access, but this broker is determined to be the low-cost provider in the area. Opening an account is free. Making a deposit or withdrawal is free, and there are no inactivity fees.
Trading 212 started a revolution in the London market by waiving commissions on stocks and ETFs. It also waived commissions on CFDs. The result of these changes was an avalanche of new account requests. Employees have been added and additional capital has been raised to address these problems of hyper-growth. As with DEGIRO, basic deposit/withdrawal transactions are free. There are no hidden fees and no inactivity fees.
Both firms offer zero commission and tight spreads. Both strive to be low-cost providers in the EEA market, including the UK. As a banking-type entity, DEGIRO only offers limited margin trading, based on the equity present in your account. Trading 212 follows suit in the stockbrokerage area of its company. Leverage is also a possibility for CFD trading, but subject to current level limits imposed by EU regulators. Negative balance protection also applies.
Where DEGIRO offers one standard trading account, Trading 212 does one better by offering an Invest account for traditional buying and selling of stocks and ETFs, and a CFD account for trading forex pairs, stocks and other financial assets.
DEGIRO has always relied upon internally developed software to support the trading by its clients. It has won several awards for excellence and ease of use. Its mobile app has also been recognised in a similar fashion. With DEGIRO, you will not find CFDs or forex pair trading (with the exception of professionally traded options).
Trading 212 has also succeeded by only offering its proprietary trading platform, both for desktop and for mobile devices. As a small broker, it has been passed over for major award recognition, but the firm publishes extremely favourable ratings from Trustpilot on its website from clients, who were pleased with the ease of use and effectiveness of the platform. You will not find MT4, but you will find a free virtual demo system.
DEGIRO has access to 50+ global stock exchanges, and can help you buy and sell shares, ETFs, leveraged products, bonds, options and futures. Trading 212 has access to 10,000 stocks and ETFs via its Invest account, but its CFD account is less than 20% of that figure. You can, however, trade currency pairs with CFDs with Trading 212.
Trading 212 provides a free demo system for its platforms, while DEGIRO does not.
Both DEGIRO and Trading 212 serve the European market with low-cost offerings. Each has its pros and cons, but determining which broker is better may come down to your personal preference. Do you want to deal with a large, bank-like institution, or with a small company?