By: Malcolm Wheatley | Updated: 9th September 2020.
For experienced investors who trade frequently, DEGIRO has a lot to offer: global reach, ultra-low costs, and a relatively easy-to-use trading platform that’s now available on mobile. For those who want a little more hand-holding, or who don’t trade so frequently – or globally – then a DEGIRO account will probably have less appeal.
Even if you’re an experienced investor, Amsterdam-based DEGIRO may be a name that is new to you. Founded in 2008 to serve the wholesale market – inter-broker and professional dealing, in other words – the firm moved into the retail market in 2013. DEGIRO now has retail operations in 18 countries, and boasts over 450,000 account holders.
How many more times can I say ‘ultra-low pricing’ and ‘global reach’? Seriously, though, DEGIRO offers something that’s out of the ordinary, in both respects. That said, global reach may not be something that is relevant to your investing needs – do you really need to trade on the Istanbul Stock Exchange? – and if you don’t trade frequently, then DEGIRO’s low pricing won’t make that much difference.
Also handy is DEGIRO’s relatively wide range of order types – something that some retail brokerages can make difficult. Day orders, market order, limit orders etc: DEGIRO offers them, and across most of the assets classes that it handles, namely stocks, ETFs, futures, bonds, options and warrants. Again, though, if these order-types and assets classes aren’t important to you, or you’re not sure what you’re doing, these aren’t going to be features that will matter that much to you.
I bought my first share aged 19, back in 1973 – although I only began serious investing in the 1980s. I’ve used a variety of brokers, traditional and online, and I like to think that I know what I’m looking for. I’m best described as a ‘long-term, buy-and-hold investor’, rather than a trader. I’ve been writing for The Motley Fool since 2007.
For UK shares, DEGIRO charges £1.75 + 0.014% for a trade, with a maximum of £5 charge. Other exchanges – ie, foreign shares — have different pricing structures: there isn’t any one standard price. Finding the pricing information of DEGIRO’s website can be difficult: it’s easy to find the examples that the firm provides, but not the definitive pricing structures that apply in particular circumstances. The trick is to download the Fee Schedule PDF, which at the time of writing (July 2020) you’ll discover by clicking “see our rates” on the Fee tab.
The bottom line – if this is important to you – is that DEGIRO’s prices are highly competitive. Compared to the major players in the UK retail sharedealing market, significant savings are on offer, which on smaller trades (£1000 or so) amount to over a reduction on the order of 80% when compared to the likes of Hargreaves Lansdown, Halifax, and HSBC.
There’s no platform fee as such with DEGIRO – that is, an annual or quarterly fee for the privilege of holding a DEGIRO account. That’s good, because some lower-cost players in the market certainly do levy such fees.
But what DEGIRO does charge is what they call a ‘connection fee’ or access fee in respect of international stock markets. There’s no applicable charge if you only trade in the UK, but buy or sell on foreign exchanges and you’ll be charged £2.27per year for each foreign exchange that you’ve accessed. Note also that Degiro’s commission is volume-based and exchange-based, so you’ll only ever pay the £2.03 quoted above if you trade exactly £2,000 worth of shares on the London Stock Exchange. Buy or sell a different amount, or on a different exchange, and you’ll pay a different amount. On the London Stock Exchange, the price calculation is £1.75 + 0.014% for a trade, with a maximum of £5 charge.
Trading quoted stocks on DEGIRO is straightforward, as you’d expect. Trading ETFs is similarly straightforward, although the fee structure (which covers worldwide-listed ETFs) differs from shares: £2.20 + 0.03%. A list of tradeable funds is maintained, although if funds feature prominently in your investment plans you’re likely to find brokers such as Hargreaves Lansdown to be a more appropriate home for your capital.
DEGIRO’s trading platform provides excellent trading functionality, but doesn’t major on providing much information about the stocks, ETFs, and other products in question. Some users have described DEGIRO’s charting abilities as only average, and it certainly doesn’t seem possible to do the complex charting that I like to carry out on platforms such as Hargreaves Lansdown. Likewise, the mobile app is basic, but perfectly adequate for buying and selling shares.
DEGIRO’s unique selling point is its ultra-low fee structure. Education offers are minimal, and largely aimed at novice investors. Minimal DEGIRO-created research is available, although – as mandated by the Financial Conduct Authority – DEGIRO has to make documents such as Key Investor Documents and fact sheets available. If extensive research is what you’re looking for, then DEGIRO probably isn’t the platform for you.
DEGIRO has an extensive list of Frequently Asked Questions, although some of the answers appear to have been written by people for whom English isn’t their first language. The service helpdesk is available from 7am to 9pm — but be warned: the telephone number you dial is in Holland. Alternatively, DEGIRO says you can send it an email 24 hours a day, seven days a week. It doesn’t say if that email will be answered 24 hours a day, seven days a week.
If you’re an active trader, using an ordinary brokerage account, then a DEGIRO account is worth looking at. If you prefer a fuller-featured platform and more research, then you’re likely to find other brokers will be a better fit for your requirements.
The Motley Fool receives compensation from some advertisers who provide products and services that may be covered by our editorial team. It’s one way we make money. But know that our editorial integrity and transparency matters most and our ratings aren’t influenced by compensation. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers.