A deep dive into Dutch online broker DEGIRO for Irish investors
Online stock brokers have made it easier for people to get started with investing and managing their portfolios on the go.
Since 2013, DEGIRO has become a popular tool for Irish investors who want to avoid paying high fees and commissions common with traditional brokerages, but still have easy access to a wide selection of investments.
In this post, we’ll explain what Irish investors need to know about DEGIRO and how it compares with other online brokers.
What is DEGIRO?
DEGIRO is an online, execution-only broker based in Amsterdam. DEGIRO is known among investors for its low fees and zero commissions.
In early 2021, DEGIRO merged with German flatexDEGIRO Bank AG to become the largest discount execution-only broker in Europe. By the end of 2021, DEGIRO had more than 2 million customers across 18 countries, including Ireland.
DEGIRO gives investors access to stocks, exchange-traded funds (ETFs), bonds, options, funds, and futures.
Investors can download the free DEGIRO app to manage investments on their mobile devices and tablets, or through the broker’s desktop website.
You can sign up for free here.
How to buy stocks online with DEGIRO
DEGIRO users can search for stocks by company name or ticker symbol. To purchase a stock, click “buy” to open the order window.
The order window displays basic information about the stock, including the bid price, ask price, and available volume.
You’ll choose what type of order you want to place, how long you want to keep the order open, and how many shares to purchase.
Learn about investing
The DEGIRO Investor’s Academy is an excellent resource for beginners who want to learn the basics before they start investing.
In 10 lessons, DEGIRO breaks down fundamental concepts and popular strategies that investors at any experience level should know.
DEGIRO users can customize their purchases on the order page.
Here are a few types of orders you may be asked to choose from.
- Day order: Order is automatically cancelled at the end of the trading day.
- Good till cancelled: Order will remain open until it’s cancelled or until it expires.
- Limit order: Buyer sets the maximum price they’re willing to purchase a share for and the number of shares to purchase when the stock reaches that price.
- Market order: Immediately executes a purchase or sale, regardless of a stock’s current price. Market orders usually execute at a stock’s current bid or ask price.
- Stop-loss: Designed to limit your potential loss on an investment. For example, setting a stop-loss order at 5% less than the price you bought the stock will limit your loss to 5% if the price falls.
- Stop-limit: A stop-limit order
- Trailing-stop: A trailing-stop order
Is DEGIRO safe?
As a safeguard, DEGIRO investor assets are held in a separate legal entity that cannot legally perform commercial activities.
That means if something happens to DEGIRO, your investments would not be treated as recoverable assets to any DEGIRO creditors.
In the unlikely event that these segregated assets can’t be returned, the German Investor Compensation Scheme will compensate up to 90% in losses, with a maximum of €20,000.
How much does DEGIRO cost?
As of Dec. 22, 2021, DEGIRO charges the following fees:
Ireland shares: €2
U.S./Canada shares: €0
EU shares: €3.90
Core selection ETFs: €0
Worldwide ETFs: €2
Handling fee: €0.50
Currency Conversion 0.25%
Read more about DEGIRO fees here.
DEGIRO does not charge inactivity fees or fees on deposits and withdrawals.
DEGIRO investing terms to know
Here are a few common terms you’ll see on the DEGIRO investing app:
A “bid” is the highest price a buyer is willing to pay to buy a specific number of shares of a stock at any time.
An “ask” is the lowest price a seller is willing to sell a certain number of shares of a stock at any time.
The “spread” is the difference between the bid price and the ask price.
“ETF” stands for exchange-traded funds. ETFs are a type of investment that tracks a specific index, sector, commodity, or asset. ETFs can be purchased and sold like a stock. Some ETFs charge a commission, but DEGIRO has about 2,000 commission-free ETFs to choose from.
Investors often use the terms “stocks,” “shares,” and “equities” interchangeably to refer to purchasing a small ownership interest in a company. The price of a single stock is determined by the level of supply and demand in the market.
Some brokers allow investors to purchase fractional shares if they’re not willing to pay the price of one whole share. However, DEGIRO does not allow users to purchase fractional shares.
“Bonds” are issued by governments or companies to seek money from investors. By purchasing a bond, an investor essentially agrees to lend the bond issuer money for a specific amount of time.
The bond issuer typically agrees to pay investors a specific rate of interest during the life of the bond and repay the principal amount of the bond when the bond period ends.
A broker, such as DEGIRO, is a person or entity that buys and sells investments on behalf of customers.
Customers usually pay a broker fee, also called a commission, each time they buy or sell an investment through the broker.
DEGIRO alternatives and competitors
Revolut is a popular UK-based fintech company that provides various mobile banking products and financial services including currency exchanges, debit cards, savings tools, and stock trading.
Although Revolut has a wide selection of money features, it doesn’t offer the same selection of investment options found on DEGIRO. As of December 2021, Revolut only supported U.S. shares, commodities, and cryptocurrencies.
Traditional brokerages provide hyper-personalized services for investors.
However, that personal service often comes with high commissions and fees. Traditional brokers are often best suited for wealthier investors who want more detailed information and financial advice.
Investing involves risk of loss.
As always the above should not be considered recommendations and always please seek independent professional advice before making any financial decisions.
I get an affiliate fee for referrals to DEGIRO. However as anyone who has read the blog, newsletter or attending any talks before will attest I have been singing the praises of DEGIRO for long before there was any referral fee.