DEGIRO is one of the most popular brokers in Europe. Unfortunately you can’t automate your investments through the broker which means it's difficult to invest periodically and stay the course. In this article we look at what the benefits are of periodic investing, why you should invest periodically and how you can get 50% of the way there using DEGIRO. We also show you how Curvo can solve all of these considerations for you.
What is periodic / automatic investing?
Periodic investing, known as dollar-cost averaging (DCA) or euro-cost averaging in Europe, offers a more balanced approach to investing. Instead of putting in a large lump sum all at once, you invest smaller amounts at regular intervals, such as monthly. This method works irrespective of market conditions, and you can automate it to ease your financial life.
Why you should invest periodically
There are several reasons why investing periodically is the best strategy for most investors:
- Set up a good financial habit
- You're likely paid monthly
- You don't miss out on returns when you invest monthly
- No temptation to time the market
- Avoids regret
- Best suited for long-term investing
Set up a good financial habit
By committing to a regular investment schedule, you're enforcing a disciplined approach. It's a way to ensure you're consistently setting aside money for the future.
You're likely paid monthly
Your finances then progress at a monthly rhythm. Investing at the same frequency simplifies saving and budgeting.
You don't miss out on returns when you invest monthly
The best time to invest was yesterday, the second best time is today.
The financial markets go up and down. But the long-term trend is upward. The longer you wait to invest, the more likely you are to miss out on returns. By investing part of your salary as soon as you receive it, you force yourself to invest as early as possible.
No temptation to time the market
Timing the market is incredibly difficult. The global economy is amazingly complex, and the financial markets are impacted by many factors that are completely out of our control. For instance, no one could predict the exact timing of the Covid pandemic. When timing the markets, the odds are against you. You may get lucky, but in most cases you'll be worse off.
Diligently investing every month without considering market performance removes any temptation to time the market.
Avoids regret
Trying to time the markets can be exciting, but it's also stressful. You don't know whether you're buying or selling at the right time, and you'll inevitably make a wrong decision at some point. Don't regret your decisions. Investing periodically takes away the stress and potential regret, and brings peace of mind.
Best suited for long-term investing
Consistent monthly investments are the best way to save for the long term. As your career progresses, you will likely increase your monthly income. Through DCA, you can easily increase your monthly contribution to adapt to new financial situations.
Can you invest automatically using DEGIRO?
No, you can't. A couple of workarounds exist, but they only get you part of the way there or they're technically complicated:
- Sending money by standing order to your DEGIRO account. You'll still have to make the investments manually though.
- Using an (unofficial) API library. People have reverse engineered DEGIRO's API calls and offered it as an open-source library.
1) Sending money by standing order
Here are five steps to consider before you set up a direct debit automatically towards your DEGIRO account:
Step 1: Set a budget
Decide how much you can afford to invest each month. Make sure you choose an amount that doesn't compromise your other financial obligations.
Step 2: Set up a standing order
Most bank apps allow you to set up a standing order, where a transfer is repeated periodically.
Step 3: Set a reminder in your calendar
Since DEGIRO doesn’t offer automatic investing, you can set a monthly reminder to manually place your trades and buy.
Step 4: Log in to DEGIRO to buy
On the day of your reminder, log in to your DEGIRO account and manually place your buy orders.
Step 5: Monitor your plan
Every so often, review your portfolio to ensure it aligns with your goals. You may need to rebalance your asset allocation or adjust your monthly contribution.
2) Using an API library
The second option is more technical. DEGIRO does not have an official API. But people have reverse engineered DEGIRO's API calls and offered it as an open-source unofficial API library. We haven't tested the API script ourselves but there seems to be an active community using it. You can automate your investments on DEGIRO by coding your own software that utilises this library. It naturally requires sufficient coding skills (the library is written in TypeScript). So it's probably not worth it unless you know what you're doing, and you have sufficient trust in the library that it won't put your assets at risk. Also, be careful as DEGIRO can block your account if they catch you using automation scripts.
Problems with investing monthly through DEGIRO
You can use DEGIRO to invest every month. Unfortunately, this method can be costly for small investment amounts because of the fees. It also doesn't take advantage of using all of your cash available because DEGIRO does not support fractional shares. And, we saw that it's very hard to automate unless you're a programmer.
The fees add up
DEGIRO charges two types of fees:
- transaction costs
- connectivity costs
The transaction cost is the fee you pay for every purchase or sale you make on the stock market. DEGIRO charges €1.00 or €3.00 for ETFs, depending on the inclusion of the ETF in the core selection and the exchange you trade on.
A peculiarity of DEGIRO 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 an stock or ETF.
For Belgian investors 🇧🇪
Belgian investors also have to pay a tax on every transaction, called "beurstaks" or "taxe boursière" or TOB. Depending on how the broker interprets the law, the tax varies from 0.12% to 1.32% of the transaction value. DEGIRO withholds and declares this amount for you.
Tedious manual task every month
It's fun to calculate the shares and make your investments every month when you first start investing. But over time this process becomes repetitive and annoying. Yet you'll have to repeat it every month when investing through DEGIRO.
Cash is left uninvested
DEGIRO doesn't support fractional shares which means you have to buy whole units of shares. Often cash is left on the side as this is money that is not invested. The cash stays on your broker account and does not even earn an interest through DEGIRO, so it's not particularly useful.
Curvo: the best way to invest monthly
As you saw, using DEGIRO for periodic investing is not a simple task. The same holds for other brokers. The task was so cumbersome that it led co-founders Thomas and Yoran to create Curvo in the first place. After all, consistent monthly investing is a cornerstone habit for a better financial future.
Through the Curvo app, you can fully automate your periodic investing. And you can make sure all your money is invested thanks to fractional shares.
Savings on autopilot from €50 per month
Through the Curvo app, you can access the investments offered by NNEK, a Dutch investment firm supervised by the AFM. And through direct debit ("domiciliëring" or "domiciliation"), you can set an amount that will automatically be debited from your bank account and invested for you. It's possible to change the amount any time, or even cancel the debits. You can just sit back, relax, and watch your savings work for you. And with the time you save, you can get back to the things that are important in your life rather than worry about your investments.
All your money is invested
Unlike investing with DEGIRO, investing with NNEK through the Curvo app supports fractional shares. No matter the price of the shares and the amount you invest, all your savings are invested and put to work. There is no cash left behind just sitting on an account.
Summary
Periodic investing, often called dollar-cost averaging (DCA), is a strategic and balanced approach to growing your wealth over time. By investing smaller sums at regular intervals, you align your investment strategy with your monthly financial cycle, mitigate market volatility, and sidestep the pitfalls and stress of trying to time the market.
Unfortunately, using DEGIRO for periodic investing poses challenges such as transaction fees, no fractional shares, manual execution, and idle cash. However, apps like Curvo offer an automated option that makes monthly investing seamless, cost-effective, and fully automated, allowing you to focus on what truly matters in your life while your money works for you.
Questions you may have
Can I set up a savings plan on DEGIRO?
No. DEGIRO does not offer an automated savings or investment plan feature. This means you can't automated your savings through DEGIRO. However, you can manually buy stocks and ETFs. So in theory, you can create your own savings plan by sending money monthly every month and making the purchases yourself. This is tedious and manual work. Learn more about investing through DEGIRO in our extensive review.
How to invest monthly with DEGIRO?
DEGIRO does not offer any built-in automated monthly investing features. Due to this, you'll have to make sure you send money from your linked bank account towards your DEGIRO account.
Can I use DEGIRO in Belgium?
Yes you can use DEGIRO in Belgium. You have to create an account through the Dutch degiro.nl or the French degiro.fr. Make sure you follow our guide on how to declare your DEGIRO account to the Belgian authorities as it's a foreign broker.