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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 Trade Republic 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 overview
The table shows an overview of how Trade Republic compares to DEGIRO for different criteria. Read on to get the full details!
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.
DEGIRO
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.
Convenience
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 business, children nor joint accounts.
Safety
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.
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 Trade Republic 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.
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 on how it compares to investing through a broker.
Summary
In this article we highlighted the key differences between Trade Republic and DEGIRO, two foreign brokers accessible to Europeans. Due to the fact that Trade Republic has a frowned upon business model, DEGIRO may be a better option long-term 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 and their help with taxes.
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.