eToro vs Trade Republic

The overview

The table below shows an overview of how eToro compares to Trade Republic on different criteria. Read on to get the full details.

eToro

Story of eToro 🇮🇱

eToro was founded in 2007 in Tel Aviv. They've grown to 30 million users around the world by giving their customers easy access the stock market. Do note that there's "only" 2.6 million users with money in their account so the number is quite inflated. eToro has been at the forefront of the movement to make investing more "mainstream", as shown through their adverts featuring Alec Baldwin. One of the unique features of eToro is its CopyTrader function, which allows users to automatically replicate the trades of successful traders on the platform. This feature is particularly useful for novice investors who may not have the experience or knowledge to make their own investment decisions. Additionally, eToro offers a social feed where you can interact with your friends, share ideas, and discuss investment strategies. They were one of the first brokers to pioneer "social investing".

Fees for ETFs

eToro has a limited selection in comparison with other brokers. They only offer 263 ETFs to purchase. Buying €1,000 of the popular IWDA ETF will cost €0 in transaction fees. However, keep note of the currency exchange fee you'll be paying. Note that you can't actually purchase IWDA but you get the same fund with an alternative ticker SWDA. Even though you're most likely going to use eToro from the Belgium (or in the EU) if you're reading this, their entire app is in USD. This is where eToro makes the bulk of their revenue from! The conversions between € and USD are core to their business model. For example, if you deposit via a bank transfer, you'll pay 0.5% exchange rate costs. If you deposit via Paypal or Sofort, you'll end up paying a 1.5% exchange rate cost.

Convenience

eToro allows setting up recurring deposits, but investments must be made manually. They offer the ability to purchase fractional shares, facilitating euro-cost averaging strategies, particularly beneficial for investing smaller amounts periodically. However, eToro requires users to handle their own tax obligations irrespective of which European country you're using the app from. For example, in Italy, it's a declarative regime. For Belgian investors, you have to handle the Belgian transaction tax yourself, dividend tax, and Reynders tax on ETF profits, as well as declaring the account to the National Bank of Belgium annually, as eToro does not provide assistance in these areas.

Setting up an account

Setting up an eToro account is fast and user-friendly, requiring only an email for initial access, with full account creation necessitating ID and proof of address, typically approved within a few hours. eToro offers the convenience of signing up through both web and mobile platforms including the option to use Facebook or Google for registration. However, the app's design feels somewhat outdated, and its interface can be overwhelming with information, especially for buy-and-hold ETF investors. eToro does not offer children or joint accounts, though joint configurations for deposits are possible. You can set up a business account but the minimum deposit is $50,000.

Safety

eToro is regulated by multiple entities including the Cyprus Securities Exchange Commission (CySEC), the FCA in the UK, and the SEC in the United States, with its headquarters in Israel. They have faced regulatory issues, including being banned in India, fined €1.3 million in Italy for misleading advertising, and fined in Canada for operating without registration. While eToro's EU operations based in Cyprus offer €20,000 protection under the European investor protection scheme, cash is not protected by the €100,000 deposit guarantee scheme. Additionally, eToro participates in securities lending and engages in payment for order flow (PFOF) in the United States, with unclear practices for European clients.

The full review

We wrote an extensive review of eToro if you wish to dig deeper on their offer.

Trade Republic

Story of Trade Republic 🇩🇪

Trade Republic was founded in 2015 in Munich under its original name Neon Trading. It was incubated by Comdirect Bank and is now headquartered in Berlin, Germany. Trade Republic is a "neo-broker" meaning it's modern and fresh in comparison to older brokers. They are very much like the Robinhood app but built for Europeans. They are backed by some of largest venture capital firms in the world including Sequoia. In total they have raised over €1.1bn in order to become the leading trading app in Europe and have launched in 17 countries. Trade Republic claim to have over two million customers, spread across the countries they've launched in. They launched their app in Belgium in October 2022.

Fees for ETFs

Trade Republic really is one of the cheapest options for European investors. For instance, buying €1,000 of the popular ETF IWDA by iShares, that tracks the MSCI World index, would cost only €1. This makes it an attractive proposition for putting your savings to work but there are some downsides too.

Convenience

Trade Republic offers fee-free transactions for ETF purchases through its automated savings plans, enabling fixed monthly investments with selectable investment dates. However, Trade Republic's customer support is limited, lacking phone service and relying on automated responses. If you're a Belgian investor, you must handle your own tax obligations, including the transaction tax (TOB), the dividend tax and the Reynders tax, as well as declaring their account to the National Bank of Belgium annually. The same can be applied for Italian investors where you'll receive an annual tax report from Trade Republic. 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).

Setting up an account

Setting up a Trade Republic account easy requiring only a valid ID and tax residency in an EU country (and where they've launched), with account approval typically completed within a few hours. The platform allows account creation on both web and mobile though owning a smartphone is necessary. Design and information density can be challenging on Trade Republic's app particularly for buy-and-hold ETF investors. Trade Republic does not offer the option to create joint or children's accounts, restricting account ownership to individuals.

Safety

Trade Republic, headquartered in Berlin, operates under the supervision of BaFin, the German regulator, and faced scrutiny during the GameStop saga in January 2021, leading to numerous complaints but ultimately no finding of market manipulation by BaFin. While Trade Republic does not engage in securities lending, they do participate in payment for order flow (PFOF), a revenue model that has been controversial due to potential disadvantages to investors through less favourable execution prices. This practice, although scrutinised, remains operational in Germany for the time being, despite EU regulators banning PFOF by June 2026.

The full review

We suggest you read through our extensive review of Trade Republic.

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 eToro or Trade Republic, 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.

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 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. 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”.

Learn more about all the differences between investing yourself through BUX and Curvo.

Summary

In this article we highlighted the key differences between eToro and Trade Republic, two brokers accessible to Europeans. Due to the fact that eToro isn't based in the European Union, you need to ask if it's worth it to invest through their app over the long-term. The fact that everything is handled in USD isn't ideal for us Europeans. The fact that both eToro and Trade Republic don't help you with taxes isn't ideal. You should take into account the ease of use of both apps. However Trade Republic is clearly a more user friendly app and is based out of Germany which provides us with more confidence.