Keytrade vs DEGIRO vs Curvo

Why you shouldn't invest through your bank

For many making their first steps into the world of investing, their bank is the one-stop shop for anything related to finance. Unfortunately, they are likely not your best partner when it comes to investing.

First, they try to sell their expensive actively managed funds to you. In an active fund, the fund managers try to outsmart other investors in search for a higher return. But the European finance regulators found out that the majority of them don't succeed. On top of that, the bank charges hefty fees to invest in the fund. Good for the bank, bad for you. You're better off investing through another means.

Why a broker

Through a broker, you gain access to the financial markets, where you can buy stocks, ETFs, bonds and even some more complex products like derivatives. It's cheaper than investing in an active fund offered by a bank. Alternatively, most banks offer brokerage services. Yet again, it's the most expensive option. Specialised brokers offer a better experience at a cheaper cost.

So let's compare two such brokers available for Belgian investors: Keytrade and DEGIRO. We are going to see how they differ on important criteria like cost, trust, and ease of use.

Keytrade

Keytrade has been around since 1998 and was one of the first online brokers in Belgium. Their offer has grown a lot since then as they propose full banking services now, including lending. In 2005, Keytrade Bank was acquired by Groupe Crelan (formerly Crédit Agricole) and is now part of the Crédit Mutuel Arkéa Group.

You can’t set up an account through the app. You need to go through their website instead. The registration process takes a few minutes and starts by heading to their website. Then choose your language of preference (French, Dutch or English) and click on the button to become a client.

You can use itsme to pre-fill your information, else you need your identity card and an e-ID card reader. The eID card reader setup can be painful and time consuming, especially if you need to add a connective plugin to make your card reader work!

Once you filled in all the required information, you need to wait until your account gets approved. Unfortunately this can take a while.

Extremely long account opening times

We registered for an account on October 31st 2022. But as of June 25th 2023, or 237 days later, our account was still pending approval! We had to update an address which blocked the account opening.... Similar slow waiting times have been shared by other Keytrade customers online. So if you're wanting to get started investing quickly, Keytrade is not the best option.

High fees

Keytrade is one of the most expensive brokers in Belgium. Buying €1,000 of the VWCE ETF will cost €14.95. This is quite expensive in comparison to other brokers available to Belgians, including DEGIRO which we'll look at below. As you pay this fee for every purchase, it will compound to a lot of money (and missed returns) on the long term.

Handles all taxes for you

As Keytrade is registered in Belgium, they automatically withhold and declare all relevant taxes for you: the transaction tax (TOB), the dividend tax as well as the Reynders tax.

You can only buy whole shares

Like many brokers in Belgium, Keytrade does not offer fractional shares. You're forced to purchase whole units of shares. Combined with the high fees, it becomes very impractical to invest on a monthly basis when using Keytrade. You almost have to resort to consolidating your monthly investments into large and infrequent contributions, like every six months.

Confusing interface

Their app is full of unnecessary details. This makes the mobile experience quite poor and fairly difficult to find the information you need to make an investment decision.

Automated investments through Keyplan

Keytrade offers an automated investment option called Keyplan. They claim it's "free" and you can start investing from only €25. However, there are a couple of downsides to Keyplan:

• The real costs are hidden in the funds. Fund managers charge a fee for managing their funds. The total cost of a fund is indicated by the total expense ratio (TER). Index-based ETFs such as VWCE usually have a TER around 0.20%. But Keyplan's funds are a lot more expensive. For example, the TER of the funds in their Balanced portfolio vary between 1.46% and 1.87%. So even though Keyplan itself is "free", the fees are hidden in the running costs of the funds you invest in.‍
• You'll pay dividend tax on some funds. In Belgium, any dividend you perceive is taxed at 30%. Accumulating funds, which directly reinvest dividends, are a way around this tax. On the other hand, distributing funds distribute their dividends, which means they're taxable. Unfortunately, some of Keyplan's funds are distributing. So be careful in your choice of funds if you want to avoid paying the dividend tax!

👍 Pros of Keytrade

• Taxes: they handle everything for you.
• Belgian 🇧🇪: this means you don't need to declare your account to the Belgian authorities like you have to do for foreign accounts.
• They reimburse incoming transfers: they will reimburse up to €2,500 in cash if you have transfer costs for moving over your shares from another broker to Keytrade. This is one of the most generous packages we've seen brokers offer!

👎 Downsides of Keytrade

• Extremely slow account opening: several months later, we're still waiting for our account to be approved.
• Expensive: Keytrade is one of the most expensive brokers in Belgium.
• Ill-suited for monthly investing: just like Bolero, Keytrade's fees are too high to justify investing on a monthly basis.
• No fractional shares: you' have to buy whole units of shares. This means you may have to accumulate savings for several months before buying your shares.
• High outgoing transfer fees: at €42.35 per line, Keytrade charges high fees for moving your positions to another broker.

DEGIRO

DEGIRO was launched as an online broker in 2013. It 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.

DEGIRO is available in a wide range of European countries:

Fees

DEGIRO charges some of the lowest fees on the market. They even have a large selection of ETFs as part of their core selection that cost only €1 for each trade. IWDA, a popular ETF offered by iShares, is one of those. Every month, the first transaction of IWDA on the Euronext Amsterdam stock exchange will cost just €1. Subsequent transactions for IWDA that same month will also cost just €1 provided:

• the transaction is in the same direction (i.e. buy/sell) as the first transaction
• the value of the transaction is at least €1,000

For ETFs that are not part of the free selection, DEGIRO charges a €3 fee. Read more about the costs of investing with DEGIRO.

Handling of taxes

DEGIRO will provide you with an annual report to help you file your taxes. It's usually provided by the end of February or early March. They will also withhold tax for you automatically depending on where you are registered with an account. DEGIRO provides some comfort to Belgian investors as they handle the Belgian transaction tax (also known as the TOB or “beurstaks” or “taxe boursière”). Every time you buy or sell anything, you have to pay this tax which ranges from 0.12% to 1.32%. DEGIRO makes sure the tax is paid and declared for you.

However, they do not handle the following:

• Tax on dividends (“roerende voorheffing” or “précompte mobilier”). A 30% tax on the dividends you perceive through the shares that you hold. You need to make sure that you calculate and declare them in your yearly tax declaration.
• Tax on capital gains on bond funds (also known as the Reynders tax). There’s a 30% tax on the profits you make when you choose to sell the bonds in your portfolio. Again, DEGIRO pushes the responsibility to you for declaring the right amounts in your tax declaration.

You also have to declare your DEGIRO account to the Belgian National Bank as DEGIRO is a foreign broker.

Depending on the makeup of your portfolio, taxes are an important consideration to take in mind when choosing a broker. They're an administrative burden that take time and effort. Failing to pay or declare a tax can also lead to a costly fine. We’ve written extensively about taxes Belgian investors should know if you wish to dig deeper into the topic.

Issues with the Dutch regulator

Throughout its existence, DEGIRO has had numerous run-ins with the AFM, the Dutch regulator for the finance industry. For example, they were fined in 2018 because they did not implement an adequate policy for conducting their business with integrity. As we’re dealing with our long-term savings, safety and trust is vital.

You can only buy whole shares

A popular investment strategy is euro-cost averaging, where you invest periodically instead of investing large lump sums in one go. You invest at fixed times, for instance every month, regardless of how the markets are performing. Most people are paid monthly, so it makes sense for their investments to follow the same pattern.

Unfortunately you can’t buy fractional shares with DEGIRO. This means you need to buy whole units. Following a euro-cost averaging strategy can then become tedious and expensive.

Let’s take the IWDA ETF as an example again. At the time of writing, it’s sold at €71.12. If you contribute €200 towards your savings, you’re only able to buy 2 whole units for €142.24. The rest of the money is sitting on a cash account not working for you. Due to this, many investors have lots of cash sitting around waiting to be invested.

👍 Pros of DEGIRO

• Cheap: they have some of the lowest fees of almost all brokers available to us in Europe especially if you choose ETFs which are part of their "core selection". It's definitely a lot cheaper than Keytrade.
• Large selection of ETFs: they have such a large variety of options available for European investors.
• They help with withholding taxes: this can be a significant time saver for you so you don't have to calculate everything yourself.

👎 Downsides of DEGIRO

• Confusing interface of the app: the app is intimidating to use if you're new to investing as you’ll encounter some technical terminology and features. DEGIRO offers many types of securities: turbos, warrants, stocks, ETFs… And when you place an order, you also have to choose between a market order, a limit order, a stop-loss order, amongst others.
• Issues with the regulator: they've regularly had problems with the Dutch financial authorities (AFM) over the years which doesn’t give much confidence.
• No fractional shares: this can be frustrating as you have to purchase whole units of shares. Essentially, we’re leaving money on the side not doing anything.
• Transfer fees: transferring your assets away from DEGIRO to another brokerage costs €10 per position and “external costs” that are unclear.

The easier way: Curvo

When you choose a broker, you then have to figure out what to buy, when to buy, understand the tax implications of your decisions, rebalance your investments and make sure they stay in line with your goals and risk tolerance. We realised the difficulties of investing through brokers like Interactive Brokers and DEGIRO. That's why we created Curvo: the right investment decisions are made for you, so you don't have to worry, where we rely on NNEK, a Dutch investment firm supervised by the Dutch regulator (AFM).

Based on index investing

We are convinced index investing through ETFs are the best way for most people to invest and grow their savings. 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.

There are many benefits to index investing.

Low-cost

ETFs and index funds are inexpensive to run, and are therefore cheap for investors compared to active funds or buying individual stocks.

Diversified

One of the goals of index investing is to diversify as much as possible. We saw that an index fund such as "iShares MSCI ACWI" invests in 2,800 companies across 47 countries. Through diversification across many countries and sectors, you eliminate unnecessary risk. And you also benefit from the growth of the best companies in the world, not just the large German, French or American companies you know. By investing in as many companies as possible, you're almost sure of including the winners, namely the minority of stocks that are responsible for most of the returns.

You can invest with low amounts

Another advantage of index investing is that you don't need a lot of capital to get started. You can even invest with as little as €50. This makes index investing possible for everyone, especially young people who just started their career and want to grow their wealth by putting their savings. In contrast, real estate is much less accessible. Just the down-payment for a property requires several tens of thousands of euros.

It's tax-efficient

In most European countries, investing in the stock markets is tax-efficient compared to other types of investments. Some countries like Belgium even don't tax profits from investments in stocks, making index investing particularly tax-efficient for them.

Great for beginners

Index investing is one of the best ways for new investors to start investing. It's a proven strategy and doesn't take too much time to set up. Furthermore, it's a lot less risky than investing in individual stocks, or trading in highly leveraged instruments like options of CFDs.

It works

Long-term index investing has worked in the past. And there's no reason it shouldn't work in the future. Just take the global index MSCI World as an example, which is composed of 1,500 companies across 23 countries. It has delivered an average yearly return of 10.8% since 1979.

The challenges of investing through a broker

You can invest in ETFs through a broker. But that comes with challenges:

• The allocation of your portfolio is in your hands: you need to figure out how to build the right allocation that meets your long-term goals.
• You need to do your own homework: figuring out how to start and understanding the intricacies of investing in ETFs takes an effort. Yet it's important, because in investing the devil is often in the details.
• It takes time: send money to your broker monthly and then make the purchases.
• Costly for monthly contributions: if you wish to invest on a monthly basis, you’ll have to pay a lot in broker fees. Also, as you buy units and can’t buy fractions, you’ll always be left with cash on your account.
• Learn how to rebalance: if you have multiple funds in your portfolio, how will you rebalance? Quarterly or yearly? How do you decide?
• Keep track of your portfolio: you may have to set up a spreadsheet to stay on top of things!
• Understand taxes: this can be complicated and they also often change.
• Discipline: it requires self-confidence and discipline to stay the course.
• Brokers want you to trade: the majority of brokers make money on you trading. So as a buy-and-holders, you are not a good customer to them.

Curvo solves all the complexities of good investing

Rather than having to pick the right stocks or ETFs among the thousands available through these brokers, through the Curvo app you invest in a portfolio that is tailored to you and your goals. Each portfolio is managed by NNEK, a Dutch investment firm supervised by the Dutch regulator (AFM). They're 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.

👍 Pros of Curvo

• Diversified portfolio set up for you: the best portfolio for you is built based on your time horizon and financial goals. Simply answer a short questionnaire and you’ll get everything set up for you.
• Safety: your investments are managed by NNEK, a Dutch investment firm that is overseen by the Dutch regulator (AFM).
• 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 everything on autopilot.
• Fractional shares: all the money you send towards your portfolio is fully invested. No need to leave the cash on the side, everything is invested for you.
• 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.
• Withdraw at any time: there’s no long-term contract or exit fees if you wish to stop investing.
• 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”.
• Start from €50: this makes good investing accessible to all.
• Business model aligned with your goals: brokers want you to trade, yet buy-and-hold works best for most people.

👎 Downsides of Curvo

• Price: It’s more expensive than investing yourself through a broker. As you pay a yearly fee on your assets, it’s more expensive in the long run than managing the investments yourself.
• You can’t choose what to invest in: You invest in a portfolio of index funds with over 7,500 companies, and that's tailored to you. But you can’t select the stocks or particular ETFs that you want to invest in.

We have successfully launched the app in Belgium and are now expanding across the EU. Download the app to be added to the waitlist for your country and be notified when we're available.

Comparison of Keytrade vs DEGIRO vs Curvo

Summary

We highlighted the key differences between Keytrade and DEGIRO, two brokers accessible to Belgians. DEGIRO is a lot more cost-effective way to invest your savings as their fees are much lower than Keytrade. However, 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, or the difficulty of investing your savings on a monthly basis. Both products aren't tailored for this but fortunately there are many other brokers to choose from.

We also highlighted the challenges of investing yourself through a broker. We built Curvo to make good investing easy and accessible to all Belgians, and we explained its benefits. Feel free to explore Curvo if you wish to learn more.

Questions you may have

What are the taxes when you invest with DEGIRO in Belgium?

DEGIRO declares and pays the Belgian transaction tax. However, they do not handle the other taxes related to investing:

• Tax on dividends (“roerende voorheffing” or “précompte mobilier”). A 30% tax on the dividends you perceive through the stock ETFs that you hold. You need to make sure that you calculate and declare them in your yearly tax declaration.
• Tax on capital gains on bond funds (also known as the Reynders tax). There’s a 30% tax on the profits you make when you choose to sell the bonds in your portfolio. Again, DEGIRO pushes the responsibility to you for declaring the right amounts in your tax declaration.

You also need to declare your DEGIRO account to the National Bank of Belgium and on your yearly tax form.

How trustworthy is DEGIRO?

Since it started, DEGIRO has had numerous run-ins with the AFM, the Dutch regulator for the finance industry. For example, they were fined in 2018 because they did not implement an adequate policy for conducting their business with integrity. They are now regulated by BaFin, the German financial regulator, as they were purchased by Flatex Bank. As we’re dealing with our long-term savings, safety and trust is vital.

What you should do now

1. Determine if you're more of an active or passive investor. Our comparison can help you decide.
2. Consider if a broker is the right way for you to invest.
3. If you want to manage your investments through a broker, assess if Keytrade or DEGIRO suits you better based on the pros and cons we highlighted. Or explore one of the many other brokers available.
4. But if you want to spend the least amount of time managing your investments, Curvo may be a solution!