In this article you can read everything you need to know about the broker DEGIRO before you open an account. We go into the rates, share our experiences with the platform, look at how deposits work at DEGIRO and you learn more about the company itself.
How do we know about DEGIRO?
DEGIRO is a fairly new broker that was founded in 2008 by five employees of the well-known BinckBank. Since then the company has grown rapidly with the main advantage of DEGIRO being the low transaction costs. In this article we look at the functionalities of DEGIRO and we also discuss the reason why DEGIRO manages to offer its services at such a low rate.
- DEGIRO is a cheap option for the physical purchase of stocks.
- It is possible to trade on various stock exchanges worldwide.
- There are no hidden costs: keeping an account is completely free.
- It is possible to use a margin system to invest more than your initial deposit.
- Get started within 10 minutes: opening an account is easy!
For whom is DEGIRO suitable?
DEGIRO is suitable for the private investor who has some assets. DEGIRO is a broker for the purchase of physical investment products. At DEGIRO you can, for example, buy popular stocks or trade in the Dow Jones.
In addition to these standard products it is also able possible to trade in bonds, options and indexfunds. The range of products is very extensive and the transaction costs are low. This makes it possible to start investing with small amounts of money.
Investing with DEGIRO: my experience
DEGIRO does not offer its own offline software package. The investments work entirely through their own online platform. I myself have already made some transactions with DEGIRO's software. In my opinion, the software can be somewhat more user-friendly, but generally does what it has to do.
After you have deposited money via, for example, iDEAL, you can search for the asset you want to invest in. Personally, I have also carried out profitable transactions in Plus500 and ABN AMRO stocks. You can see the results of these transactions with DEGIRO below:
Opening a position is simple. Once you have found the asset, simply press the buy button; you must enter how many items you want to purchase. Then you can open the position simply by clicking. The investment is then kept at the bottom of the screen, so you can always see how your investments at DEGIRO are doing.
Items such as dividends are automatically credited.
The provision of information within the online software can, in my opinion, be even better; it is sometimes unclear when, for example, a dividend is added. The DEGIRO software is therefore not the most user-friendly compared to that of other brokers.
The current cost of DEGIRO are clearly visible on the broker's website under rates. DEGIRO does not charge any standard service costs; you only pay for the executed transactions. The same rate applies for every (stock) transaction. There is usually a fixed part and a variable part. The fixed part does not change regardless of the number of securities you purchase, but the variable part obviously does.
For example, if you buy UK stocks with DEGIRO for £1,000, you pay £1,75 + 0,022% in transaction costs which comes down at £1,97. At £10,000 this increases to £4,17.
How can DEGIRO be so cheap?
DEGIRO is a cheap broker that offers investing against low rates. How is it possible that DEGIRO is so cheap?
This is due to various decisions the company has made. The main reason for their cheap services is the fact that they have an extremely efficient IT structure and that they build all of their softwares in-house
DEGIRO also regularly lends securities; this is necessary to make it possible for customers to go short. Borrowing securities involves a small risk. It is however possible to disable this functionality. When you open a custody account instead of a normal account DEGIRO will not borrow your securities to another party. A big disadvantage of this account type, is the fact that you pay extra costs when you receive dividend.
Finally, DEGIRO is working on obtaining economies of scale. At the moment, DEGIRO is active in roughly eighteen countries. By dividing the offices over a larger number of customers, the operational costs per transaction can be significantly reduced and this can help keep the prices low. However, DEGIRO does not have a significant market share in every country yet.
Conclusion of review: investing In DEGIRO?
DEGIRO is a relatively new company with a strong drive to expand. Thanks to the cheap services and the basic yet simple software, it is possible for private individuals to invest advantageously in stocks with a modest budget. If you are looking for a broker with few bells and whistles and where you get value for money, DEGIRO is a solid choice.