DEGIRO vs eToro

DEGIRO and eToro are two major online brokers. Investment Platforms.EU recommends both of these European platforms. For stock trading only, DEGIRO is the winner in our test. However, eToro also has its advantages. In this overview, we compare them based on their range of products, ease of use, fees and reliability.

DEGIRO vs. eToro: two leading online brokers

Both DEGIRO and eToro are international investment platforms, and in certain ways market leaders for European investors.

DEGIRO was founded in the Netherlands and was taken over by the German company Flatex in 2019. eToro is listed on the Nasdaq, a US stock exchange, but originally comes from Israel. They both offer a wide range of products, but their approach is very different.

DEGIRO focuses on trading effectively, quickly and at low fixed cost. For stocks, there is a lot of information available if you click through, but if you do not need this, the platform remains simple and distraction-free. eToro, on the other hand, shows information depending on who you follow or how you invest. This makes the platform feel similar to social media. Trading is often commission free, but they make money on spreads. Therefore, comparing both brokers is no easy task.

Open an account directly with a large European broker such as eToro, known for its beginner-friendly platform, or DEGIRO, which is popular for its low trading fees. Investing involves risks. You can lose your investment.

Offer depends on the target group

Both DEGIRO and eToro focus on investors in European countries, but their offer is international. Many investors on these platforms are actually looking for American stocks or opportunities in emerging markets. Both platforms offer all the basic features you would expect when investing. The mobile apps also include the full offer.

DEGIRO and eToro both offer a wide range of products, but there are clear differences right after you register. DEGIRO is an execution-only broker for experienced investors. eToro also targets young or beginner investors. You can see these differences right away in the type of information and recommendations each platform provides.

DEGIRO focuses on experienced investors. eToro is more aimed at small or beginner investors.

Information and recommendations

DEGIRO does offer a lot of information about different types of investments. For example, it shares a top 10 of most traded stocks, lists of popular ETFs, and news about local and global stocks. This helps you quickly find new investment ideas. Even though it shares a lot of information to help you with your trades, it does not give advice about investments. You decide on your own which stocks or investments to choose.

For recommendations, you need to go to eToro. This investment platform seems to target a younger audience and offers inspiration through a kind of financial social media platform. When you look at a stock, you also see other suggestions through a “people also bought” feature.

Below each stock, there is a feed where users can post messages. You can share recommendations or even copy the investments of specific traders. New investors often find this very interesting. People who already had an investment account at a bank and switch for reasons like lower costs or a wider offer may find this feature distracting.

Risky investments

Recommendations on eToro come from users, so it is important to check if they match your own risk level. eToro also lets you trade in CFDs (Contract for Difference). You do not buy the product, but earn money if the price changes in a certain way. This is very risky, as many retail CFD accounts lose money on these traders.

The platform also offers more than one hundred cryptocurrencies, which you can buy directly. This is useful if you want to own a bit of bitcoin or ethereum along with your shares in Tesla, Adyen or Meta. Crypto investments are also high risk, and you are not protected if something goes wrong. Crypto assets are very volatile and there is no consumer protection or official regulation. You can lose your money in crypto quickly. Take two minutes to learn more about the risks.

Ease of use

Both platforms are well-developed in terms of ease of use, but your experience depends on how you invest. DEGIRO mainly targets people who already know what they want to invest in and are looking for a platform where they can trade quickly at low costs.

Because of this, DEGIRO is also focused on trading in options and using different types of orders (market order, limit order, stop-loss order, and so on). If you are not familiar with these types of orders or if you are unsure which stocks to buy, it may take some time before you can really get started.

eToro is more focused on people who invest passively and want help choosing their investments. By showing what others are investing in and which products are popular, you come across many investment ideas. Whether these are good choices is another question: many user-shared tips turn out to be not so smart in the end.

Fees: DEGIRO usually cheaper

Because both platforms offer many types of investment products, there are also many types of fees. In general, the costs on both platforms are reasonable, but there are some key differences. Starting with fixed transaction fees: DEGIRO keeps these quite low, while eToro offers commission-free trading.

At first glance, this makes eToro look cheaper, but the spread costs can go up to 5 percent. The spread is the difference between the buying and selling price of an investment. The larger the spread, the more you pay as a user, even though the platform does not show this as a fee. At DEGIRO, the spread is (often) much smaller.

For small trades, DEGIRO’s fixed fees may weigh more. But for larger amounts, the higher spreads on eToro can make a big difference, even for trades that are commission-free. Currency exchange fees are also higher on eToro. If you often switch currencies, for example if you deposit in euros but buy American stocks, these costs can add up.

The fees for crypto on eToro are also quite high. For example, buying bitcoin or ethereum costs 1 percent, while specialized platforms charge between 0.15 and 0.25 percent. On the other hand, DEGIRO does not offer direct crypto investments (yet).

DEGIRO also charges a few fixed fees, like per exchange you trade on. If you invest small amounts in many different countries, this can seriously affect your returns. But if you only invest in the Netherlands, Germany, or the United States, these costs stay quite low.

Reliability: both offer a safe platform

Both platforms score highest when it comes to safety. Apart from possible losses due to your own investment choices, we do not have concerns about the safety of either platform.

Both DEGIRO and eToro are strictly supervised by financial regulators, which adds to their reliability. DEGIRO is supervised by the German BaFin through its parent company flatexDEGIRO Bank AG. eToro is supervised by several authorities, including the BaFin, the Cyprus CySEC, and the British FCA.

Both brokers are regulated in Europe and follow strict rules on customer protection, transparency, and risk management. This makes them both reliable options for private investors. Both brokers offer a reliable platform, so we do not see many differences in this area to base your choice on.

Conclusion: it mainly depends on your own preference

Both DEGIRO and eToro are reliable and user-friendly platforms for investing. When comparing them, you can focus on how the platforms work. In terms of range and safety, both are solid choices. For larger investments, DEGIRO is often cheaper. If you like to see what choices other investors make, eToro is the better platform.

The editors of Investment Platforms Europe prefer DEGIRO. This is partly because we like to make our own decisions and often talk to investors outside the platform. We usually find it easy to choose the shares we want to invest in. We read a lot, follow the market closely, and the user information from eToro adds little value for us. We also do not mind using a separate crypto broker for cryptocurrency investments.

For new and young investors, we actually recommend eToro. Thanks to the Copy Trader feature and user recommendations, it is a strong alternative to start with.