LYNX 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 more cost-effective than investing in an active fund offered by a bank.

Most banks offer brokerage services. Yet again, it's the most expensive option. Specialised brokers, such as LYNX and DEGIRO, offer a better experience at a cheaper cost. So let's compare two popular brokers for Europeans: LYNX and DEGIRO. More specifically, we are going to see how they differ on cost, trust, and ease of use.

LYNX

Founded in 2006, LYNX is one of the oldest and more established online brokers. Similar to MEXEM, they're powered by Interactive Brokers, which is one of the largest brokers worldwide. They offer direct access to the main stock exchanges.

Targeted to traders

LYNX offers two trading platforms. On the one hand, a professional trading platform forserious investors. But also a simplified trading platform called "LYNX +" for the investor who does not look at their account daily.

LYNX is available in the following countries:

Not the cheapest

LYNX isn't the cheapest broker on the market. For instance, it costs €6.00 to buy €1,000 of the iShares Core S&P 500 ETF (IE00B5BMR087). DEGIRO, MEXEM and ING Self Invest are cheaper:

No fractional shares

As LYNX does not offer fractional shares, you'll always have cash on your account doing nothing. The lack of fractional shares also makes it harder to purchase ETFs and stocks that trade at high prices.

Creating an account is better on a computer

Setting up an account through the app is possible, although it’s not very user friendly. You need to run through a series of questions concerning security, profile, education, experience, product knowledge, etc… which are easier to answer from a computer rather than on your mobile phone due to the complexity.

After answering the questionnaire, you will receive an e-mail to start your verification, after which your details will be checked and processed. The opening time is between 2 and 4 business days.

Handling of taxes

Wherever you're located, LYNX handles your local taxes if they are applicable. They provide you with the relevant statements and documents.

For Belgian investors 🇧🇪

Lynx handles 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%. Lynx makes sure the tax is paid and declared for you.

Lynx also handles the following two taxes for you as a Belgian investor:

• 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 sell any bond or fund of bonds.
• Tax on dividends (“roerende voorheffing” or “précompte mobilier”). A 30% tax on the dividends you perceive through the shares that you hold.

You don't have to declare your account to the tax man which is also an added benefit.

Run by Interactive Brokers

Interactive Brokers was one of the first online brokers in the United States and has a solid reputation in the industry. They offer transparent and low-cost trading options for its customers. LYNX functions as a front-end to Interactive Brokers, meaning that Interactive Brokers powers the underlying brokerage service. Note that MEXEM is another broker active in Europe that is set up in the same way.

👍 Pros of LYNX

• Transparent cost structure: there aren't any hidden costs when you're buying or selling your positions.
• Large selection of ETFs: they have such a large variety of options available for European investors.
• Backed by Interactive Brokers: one the largest brokers in the world.
• (For Belgians 🇧🇪) They handle the dividend tax: if you are to receive dividends, LYNX withholds it for you.
• (For Belgians 🇧🇪) They also handle the Belgian transaction tax: this is a large time saver as an investor.

👎 Downsides of LYNX

• They suggest a large deposit of €3,000 to start investing: although just a recommendation, it's still a big commitment to get started with your investments!
• Not the cheapest: At minimum €6 a trade, it's not the cheapest broker on the market.
• Targeted for traders: their service really focuses on traders. You can not only trade stocks and ETFs, but also options, warrants, futures... Beyond being intimidating to beginners, these are risky instruments that you need to understand well before investing with them.
• Not the easiest for beginners: their design and user experience isn't the easiest for a first time investor with many options to choose from.

DEGIRO

The founders of DEGIRO were former employees of BinckBank and launched their online trading platform 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 and has more presence than LYNX:

Fees

DEGIRO charges some of the lowest fees on the market. They even have a large selection of free ETFs as part of their “kernselectie” (Dutch for "core selection"). 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 be free. Subsequent transactions for IWDA that same month will also be free 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 fee that depends on the stock exchange you buy it on, for instance on Euronext Amsterdam, or XETRA, or Euronext Paris. Also, the fees for accounts opened on degiro.fr tend to be lower than for those opened on degiro.nl.

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.

For Belgian investors 🇧🇪

Note that you have to declare your account to Belgian National Bank as it's a foreign 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.

Depending on the makeup of your portfolio, these are important considerations to take in mind when choosing a broker. It's an infrequent but cumbersome administrative task. Not declaring a tax can also be costly for you. We’ve written extensively about taxes Belgian investors should know if you wish to dig deeper into the topic.

Belgian investors also need to declare their DEGIRO account to the Belgian authorities as DEGIRO is a foreign broker.

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 "free selection".
• 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 fill you with 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.

Investing 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 LYNX and DEGIRO. So our approach is different and that's why we created Curvo: we make the right investment decisions for you so you don't have to worry.

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.
• Diversified. One of the goals of index investing is to diversify as much as possible. By diversifying across many countries and sectors, you eliminate unnecessary risk.
• Rooted in the real economy. Most index funds and ETFs invest either in stocks or bonds. Those are backed by real companies, with real factories, employees, intellectual property, and so on. This is unlike, for example, the crypto industry, where the value of a currency or token is mostly determined by its potential rather than by concrete applications.
• Start investing with low amounts. You don't need a large sum upfront to start investing in ETFs, making it accessible to anyone (for instance for young people).

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, with Curvo 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.

👍 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.
• 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 Curvo portfolio is fully invested. No need to leave the cash on the side, everything is invested for you.
• Sustainable investments: Curvo focuses on one guiding principle: we 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 with Curvo.
• 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”.
• 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: Curvo offers you a portfolio of index funds with over 7,500 companies, 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 LYNX vs DEGIRO vs Curvo

Summary

In this article we highlighted the key differences between LYNX and DEGIRO, two foreign brokers accessible to Europeans. DEGIRO is more cost-effective than LYNX if you invest in ETFs from their core selection of free ETFs. 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, or the difficulty of investing your savings on a monthly basis.

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

Questions you may have

Who are DEGIRO's competitors?

There are a few alternatives available for European investors. These include:

• BUX Zero
• Trade Republic
• MeDirect
• MEXEM
• Saxo Bank

We suggest you go through our list of best brokers for in-depth comparison.

How much does DEGIRO charge in Belgium?

DEGIRO has some of the lowest fees available for European investors. Some ETFs that are in their core selection are even free of transaction costs. Learn all about the costs of ETF investing with DEGIRO.

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 LYNX or DEGIRO suits you better based on the pros and cons we highlighted. Or explore one of the many other brokers available for Europeans.
4. But if you want to spend the least amount of time managing your investments, Curvo may be a solution!