Choosing a broker is an important step when investing. There are many different options available, so picking the right one for you is challenging. We compare investing in ETFs through BUX and DEGIRO, two brokers available to European investors. The goal of this article is to help you find out which broker is best for you for investing in ETFs. We’ll compare the brokers based on their fees, convenience, the ease of setting up an account and importantly the safety of your assets.
The table shows an overview of how BUX compares to DEGIRO for different criteria. Read on to get the full details!
Story of BUX 🇳🇱
BUX is a fast growing Dutch neo-broker and has been around since 2014. BUX, their trading app, makes commission-free investing easy and lets users invest in the companies they believe in. However, it's not an entirely free app as we'll discover below. BUX has grown rapidly and claims to have 700,000 customers across the EU and 100k in Belgium alone.
Fees for ETFs
Buying €1,000 of the popular IWDA ETF will be free of transaction fees if you do a "Zero Order". However, BUX is quite a rare broker in that it was one of the first to charge a service fee of €2.99 per month. The fee is automatically deducted from your account balance. If you don't have sufficient balance, they will continue charging you for a maximum of one year for €36. After this, they can delete your account.
BUX allows you to create an "investment plan" with self-chosen asset allocation and offers fractional shares for euro-cost averaging strategies. BUX promotes trading including risky investments like cryptocurrencies. As an Italian investor, you'll receive an annual tax report from BUX. You'll have to manually take that date and input it into your tax reports. You'll have to declare your income, capital gains as well as the IVAFE (wealth tax).
Fortunately, for Belgian customers BUX handles the Belgian stock exchange transaction tax (TOB) but not the dividend tax or Reynders tax, requiring investors to manage these tax obligations. Additionally, Belgian users must declare their BUX account annually to the National Bank of Belgium.
Setting up an account
Setting up a BUX account involves a simple process of registering with an email, answering questions, and providing ID and address proof for verification. Unfortunately they don't have itsme. Users can create an account through both the BUX web and mobile platforms, but the app's interface, crowded with details irrelevant to many investors, leads to a somewhat clunky experience, particularly on mobile. BUX does not offer the option to set up children or joint accounts; accounts can only be individually owned.
BUX, a regulated entity in the Netherlands overseen by the AFM, has not faced issues with regulators and offers standard protections for investor. However, BUX engages in securities lending, a practice of lending stocks and ETFs to third parties, which they transparently report quarterly, but this carries the risk of insolvency where BUX might not return the lent financial instruments. To address this, they have a security structure with Stichting BUX Collateral holding collateral. Contrary to many other brokers, BUX does not engage in payment for order flow (PFOF), a practice that could compromise trade execution quality.
The full review
Discover all the pros and cons in our review of BUX.
Story of DEGIRO 🇳🇱🇩🇪
The founders of DEGIRO were former employees of BinckBank. They founded the company originally in 2008 and originally focused on professional investors. However, they started to reach success once they launched their online trading platform in 2013. They quickly grew across the European Union and now serve more than 2.5 million customers which makes it one of the largest brokers.
DEGIRO is now part of the German Flatex bank. It has thousands of ETFs and stocks to choose from and it’s one of the brokers on the market that offers the best value. Like many brokers, they started with stocks, but you can now also trade commodities and make margin calls.
Fees for ETFs
Essentially, DEGIRO charges two types of fees:
- transaction fees
- connectivity fees
The transaction fee depends on the inclusion of the ETF in their core selection. For those ETFs, the transaction fee consists only of a €1.00 handling fee, instead of €3.00 for ETFs not in the core selection. There's a caveat though: you need to buy the ETF on the right exchange. ETFs are traded on stock exchanges. Famous ones are the New York Stock Exchange (NYSE) or Nasdaq, or Xetra and Euronext Amsterdam in Europe.
As an example, buying €1,000 of the popular iShares MSCI World Accumulating ETF (known as its ticker IWDA) when using the Dutch DEGIRO will cost just a €1 transaction fee when buying it Euronext Amsterdam.
A peculiarity of DEGIRO in comparison to other brokers is that they charge a connectivity fee of €2.50 per stock exchange per year. This means that you need to pay €2.50 in a given year for each stock exchange where you've purchased or sold anything.
As an investor, you have to choose which exchange to use in order to reduce the fees. DEGIRO waives the connectivity cost for the home exchanges:
- 🇳🇱 DEGIRO.nl: no fee for Euronext Amsterdam and Euronext Brussels
- 🇫🇷 DEGIRO.fr: no fee for Euronext Paris and Euronext Brussels
- 🇮🇹 DEGIRO.it: no fee for the MTA Italian exchange
DEGIRO's fee structure varies per country which can make it confusing.
For Italian investors, you'll receive an annual tax report from DEGIRO. You'll have to manually take that date and input it into your tax reports. You'll have to declare your income, capital gains as well as the IVAFE (wealth tax). Note that you'll have to complete this manually as DEGIRO puts the burden on you as an investor and they have previously made errors in their tax reports.
For Belgian investors, the handling of the stock exchange transaction tax (TOB) is what DEGIRO sets apart from the other foreign brokers. However, you're still responsible for declaring any dividends yourself, as well as the Reynders tax. On top, you have to declare your DEGIRO account to the Belgian National Bank.
Setting up an account
Account openings for DEGIRO are quick and usually only take a day. A drawback is that DEGIRO does not use itsme, meaning that you'll have to get out your ID card or passport for identification. They also don't support children accounts nor joint accounts.
DEGIRO is one of the few brokers that have had past issues with regulators, namely the Dutch regulator (AFM). They also lend out your securities, as well as receive payment for order flow, a controversial revenue model for brokers.
The full review
Learn about all the pros and cons of investing with DEGIRO in our in-depth review.
Switching from BUX to DEGIRO
Even though DEGIRO does not charge any incoming transfer fees, you still can't move over your assets from BUX.
When BUX introduced the subscription fee of €2.99/month, they lost a lot of their members and many have been searching online for instructions to switch. Unfortunately BUX does not offer any transfers away from their app. Essentially, what you'll have to do is sell all your assets on BUX and then transfer the money to DEGIRO to buy again. You'll have to pay any taxes when selling on BUX and then buying again on DEGIRO.
Curvo: easier than a broker
Brokers push you to trade and to pick individual companies to invest in. Rather than picking individual stocks such as Amazon or Tesla, index funds are a way to buy the whole market, across all sectors and regions of the world. Essentially, you own a small portion of thousands of companies throughout the world. Instead of betting on a particular company, you are placing a bet on the global economy.
Rather than having to pick the right stocks or ETFs among the thousands available through BUX or DEGIRO, you invest in a portfolio that is tailored to you and your goals. These portfolios are composed of globally diversified index funds, meaning you earn a piece of the growth of the global economy, and they're best suited to make the most of your savings long term. And they're secure, as they're managed by NNEK, a Dutch investment firm under supervision of the regulator in the Netherlands (AFM).
We believe that investing is an important tool for our generation to improve our financial well-being and to prepare for our future. We are building Curvo to fulfil that vision, by making good investing easy and accessible to all:
- Diversified portfolio set up for you: The best portfolio for you is built by NNEK based on your time horizon and financial goals. Simply answer a short questionnaire and you’ll get everything set up for you.
- Automated savings plans: Through Curvo’s app you can set up a monthly contribution from €50. That means that money is automatically invested for you in your portfolio. Put your savings on autopilot!
- Fractional shares: All the money you send towards your portfolio is fully invested by NNEK. No cash is left on the side.
- No TOB 🇧🇪 : Significant savings as the portfolios aren’t liable for the Belgian transaction tax (or "TOB"). This saves you between 0.12% and 1.32% for every time you buy or sell!
- Sustainable investments: Your investments focus on one guiding principle: don’t invest in companies that are considered destructive to the planet. This means that sectors like non-renewable energy, vice products, weapons and controversial companies are all excluded.
- Project yourself into the future: Through Curvo you can see how much your portfolio is expected to be worth in the future. You can answer questions like “how will increasing my monthly contribution by €50, €100 or €200 affect my long-term savings?” to give a concrete idea for the “future you”.
In this article we highlighted the key differences between BUX and DEGIRO, two brokers accessible to Europeans. Due to the fact that BUX has a subscription model, you need to ask if it's worth the monthly fee to invest through their app over the long-term. But cost is not the only factor to take in consideration when you’re putting your savings to work. For instance, you should also take into account the ease of use of the app and their help with taxes. The fact that BUX offers fractional shares is a big benefit in comparison to DEGIRO.
Questions you may have
What's a good alternative to BUX?
There are many alternative brokers for BUX available across the EU:
We have a resource that specifically looks at alternatives in more detail for ETF investors in Belgium 🇧🇪.