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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 Interactive Brokers, 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 below shows an overview of how Trade Republic compares to Interactive Brokers on 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.
Interactive Brokers
Story of Interactive Brokers 🇺🇸
Interactive Brokers is an American brokerage firm established in 1978 by Thomas Peterffy, who still serves as its chairman. It's grown to be one of the largest in the world with over 2 million customers. It employs just under 3,000 staff across 15 countries, and is publicly traded on the stock exchange under the ticker symbol IBKR. The brokerage offers a comprehensive trading platform, providing investors access to a diverse range of financial instruments across 150 exchanges in 33 countries.
Interactive Brokers is renowned for its low transaction costs, making it one of the cheapest options out there but let's take a look at their offer in more detail.
Fees for ETFs
Interactive Brokers is one of the cheapest brokers on the market. For instance, it costs €3.00 when buying €1,000 of the popular ETF IWDA by iShares.
Convenience
Interactive Brokers does not provide automated savings plans, requiring manual account funding and trade execution, but it does offer fractional shares for strategies like euro-cost averaging. Their customer service is via email but note that they do not speak Dutch so you'll have to communicate in English or French. Unfortunately Interactive Brokers does not help with declaring any of the taxes. This makes it a cumbersome broker to use as you'll have to handle everything yourself.
Setting up an account
Opening an account with Interactive Brokers is better done via computer. They don't have an itsme integration. The account verification takes usually 3 business days. Interactive Brokers supports business and joint accounts.
Safety
Interactive Brokers is regulated entity in the US. However, in Europe, it has two main regulators: by the Central Bank of Ireland and the Central Bank of Hungary. Unfortunately, they have had issues with regulators and had to pay a $38m fine for it's lack of anti-money laundering processes. While Interactive Brokers participates in securities lending through its opt-in "Stock Yield Enhancement Programme," they do not engage in payment for order flow (PFOF), a practice common among many brokers like Trade Republic.
The full review
Read our review to get a full breakdown of Interactive Broker's pros and cons.
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 Interactive Brokers, 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 Interactive Brokers, two brokers accessible to Europeans. However they slightly differ when it comes to fees. Trade Republic's business model isn't very straightforward to understand they don't help you figure out your local taxes. However, the same can be said for Interactive Brokers. When comparing both apps, 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 hope this comparison has helped you make a decision in choosing the best broker that suits you and your goals.