Welcome to my broker comparison for European investors.
I started investing into stocks via ETFs in the beginning of 2017. Since then, I’ve tried a large number of different brokers, as I was searching for the best options for investors based in Europe like myself.
Today, I want to discuss what I believe to be the best brokerage firms for most people in Europe as well as a few that I usually don’t openly recommend for specific reasons.
Not only that, if you’re based in Austria like me or in Germany, I’ll also give you the best local options. These will make your life a lot easier since we have quite complicated tax laws and they take care of everything for you.
My goal is that by the end of the article, you’ll have a better understanding of all of the options out there and what they offer, to help you get started on your investment journey.
My Simple ETF Strategy
In case you’re new, let me give you a bit more information about my own investment strategy, to help you understand my perspective. I’m a simple long-term investor and not a professional trader.
If you were looking for someone to help you YOLO all of your savings into Gamestop or Tesla, perhaps even using margin, then I’m sorry, but this is not the right blog for you!
I just follow a simple one ETF strategy, where at the beginning of every month, I invest 1.000€ into the Vanguard FTSE All-World ETF.
The only exception is if the market is down by 5% or more. In that case, depending on my monthly income, I sometimes buy a few more shares of my ETF if I have the money.
Alright, let’s talk about the reason why you’re here, the broker comparison.
Best Brokers for European Investors
Let’s start with what I believe to be the two best options for European investors, based on my own research and experience investing with them.
First, we have Degiro, based in the Netherlands. They are one of the most popular brokers in Europe and for good reason.
The fees are very low when buying stocks and ETFs (read more in my review) and they even have a list of 200 ETFs which can be purchased commission-free once per month, as long as you make sure you use the exchange that’s listed next to the ETF (list and conditions here).
If you want to know how to buy ETFs or stocks on Degiro and the differences between basic and custody accounts, make sure you check out this post.
Degiro was actually acquired by the German broker Flatex last year. Together, they now make up the largest European retail online broker.
Here are two benefits that come from the acquisition:
- Since Flatex has a German banking license, Degiro is currently rolling out the deposit guarantee of up to 100.000€ on cash deposits, which is something that was missing before. You’ll receive an e-mail when your account has been transferred.
- flatexDEGIRO is a public company. As a result, they have to follow even stricter regulatory oversight and publish all their numbers on a regular basis, so we should be able to get a better look into Degiro’s business and finances, which we weren’t really able to see in the past.
In my opinion, the acquisition by Flatex is certainly good news for anyone with a brokerage account at Degiro. It will be interesting to see what the future holds for the broker.
Regarding basic and custody accounts, let me just quickly tell you my own opinion:
- If you’re only interested in buying accumulating ETFs, I think choosing a custody account is a no brainer.
- If however, you’re following a dividend strategy or you prefer distributing ETFs, then I think a basic account makes more sense, as it comes without dividend fees.
But of course, the account type you go with is ultimately an individual decision. That being said, you can always open an additional account on Degiro and transfer your shares over if you ever change your mind on the account type you want.
Next, we have Interactive Brokers, one of the best known international brokerage firms in the world, founded all the way back in 1977 in the US.
Like flatexDEGIRO, they’re also a public company that’s listed on the stock exchange.
And like Degiro, they also enable investors to buy and sell stocks or ETFs with extremely low fees.
One thing you need to know however, is that a direct Interactive Brokers account straight from their website comes with a monthly 10$ inactivity fee if your account is below 100.000 dollars or euros, which I think is the case for most people that are reading this article. This means that every month, if your trading fees are less than 10$, you have to pay the difference. So if you buy your favorite stock or ETF once a month and you pay 2$ in trading fees, they still charge you 8$ in addition to that at the end of the month to reach the 10$ minimum. So as you can see, for most people, especially long-term investors, opening an account directly with Interactive Brokers is not a great option. After all, we want to minimize costs to have more money to invest and to compound over time.
On July 1st 2021, Interactive Brokers removed all inactivity fees! That means you can now sign up directly with Interactive Brokers, without the need of using an introducing broker like CapTrader to get rid of monthly fees.
There are no other hidden yearly fees and share lending is deactivated by default (you can activate it manually for extra earnings), making this one of the best brokerage firms for European investors.
If you’re currently with CapTrader like I was, don’t worry. You can always de-link your account later on, and become a “normal” Interactive Brokers customer.
Flatex: The Best Broker for Austrian Residents
Now, if you’re based in Austria like myself or in Germany, this section of the post is for you. If you’re not, you can skip this part.
As an Austrian or German resident, Degiro and Interactive Brokers are still excellent options, don’t get me wrong. But, you should know that we have more complex tax laws compared to most other European countries, so going with a local broker can make your life a lot easier and save you plenty of time.
That’s because local Austrian or German brokers take care of the correct taxation for you, so you don’t need to separately deal with it yourself on a yearly basis.
In Austria, where my wife and I live, the best choice by far that I’ve found is Flatex. Yes, that’s the same broker that acquired Degiro in 2020.
Flatex has no account fees and they offer ETF saving plans which allow investors to buy specific ETFs (eg. on a monthly basis) without any fees or only paying 1,5€ in fees in my specific case with the Vanguard ETF.
My wife and I have our monthly savings plan running here at the beginning of every month.
The Best Brokers for German residents
If you’re in Germany, I wouldn’t go with Flatex, as they have a different fee model there.
Instead, there are three better brokerage options for German residents. None of them have account fees and their trading fees are among the best in Europe. I’ve used them occasionally as well, although they don’t make my own taxes easier as an Austrian citizen.
- Smartbroker – Trading any stock or ETF is free of charge as long as you’re buying/selling 500€ or more of it using the Gettex exchange. This one is my favorite among the three.
- Scalable Capital – Free saving plans for countless ETFs and only 0,99€ in fees for direct purchases
- Trade Republic – Some free saving plans and only 1€ in fees for direct purchases
Brokers That Rank Lower On My List
Ok, now that we discussed the brokers that I recommend checking out, we need to talk about two that I’m not fully convinced of for specific reasons.
The first one advertises a lot on YouTube, so you might have seen it already.
I’m of course talking about eToro.
At first glance, what they offer looks quite enticing. You can buy stocks and ETFs with no commissions, invest into cryptocurrencies and copy the trading strategies of other investors.
However, there are a few things that stop me from using eToro and from openly recommending the broker:
- They’re regulated in Cyprus, which is not necessarily a problem, but I personally place a bit more trust in regulations in Central European countries.
- You only have USD as your account base currency
- They charge a 5$ withdrawal fee plus a conversion fee if you’re sending your money back to your bank account which is likely running in Euros
- A sneaky 10$ monthly inactivity fee, in case you don’t log in to your account for more than 12 months
- You can’t transfer your shares from eToro to another broker. That for me is a no-go, as it means you’re forced to sell your positions if you’re not happy with eToro any more, instead of transferring them, and you’re then forced to tax potential profits right away instead of some time in the future.
- Lastly, it’s clear that they make most of their money with derivatives and leveraged trading, so it’s likely they push investors into that direction. Which can cause long-term investors to start gambling on margin even though they were initially planning to follow a simple long-term investment strategy.
The last broker I want to talk about is Trading 212.
I used Trading212 a few times last year, for a bit of speculation on the price of gold and silver, which I luckily stopped after two months.
I have to admit, I enjoyed the ease of use of the service using the app and the web interface and being able to trade without commissions. They’re also quite innovative with their autoinvest and investment pies you’re able to set up.
In my opinion, Trading 212 is certainly a better option than eToro, as you can have your account running in Euros and there are no withdrawal or inactivity fees.
But, the broker still comes with a few cons that you should be aware of:
- The number of available stocks and ETFs is a bit limited compared to other brokers
- There is no way to opt out of the share lending policy
- Sadly, like eToro, they also don’t allow investors to transfer their positions to another broker, making them a no-go for my long-term investments.
It’s perfectly fine if your own opinion regarding eToro and Trading 212 is different, but maybe you now understand why I haven’t mentioned these two brokers before.
Alright, I hope I was able to make your investment journey a bit easier and to give you a better overview of the brokers that are out there for European investors.
If you found this helpful, you’d like to support me and check out any of the brokers that I mentioned, feel free to use my links.
The Best Brokers for European Investors (Video)
Note: The following video is a a few months outdated, it’s missing Degiro’s current summer promotion as well as Interactive Brokers removal of inactivity fees on July 1st. As a result, I now recommend going straight with Interactive Brokers instead of CapTrader, unless they offer something specific that suits your personal needs better.
- My Investment Tools
A list containing all my investments in P2P Lending, the brokerage accounts I use to buy ETFs, my speculative investments in Bitcoin and my free bank accounts. It even includes the tools I use for blogging and YouTube.
- P2P Bonus Offers
A collection of all the best, currently available bonus and cashback offers in the P2P lending space. Regularly updated.
Disclaimer: Investing involves risks of losses. You should always do your own research before investing into anything. Also, some of the links are affiliate links, which help support me, the website & YouTube channel. I only link to services I use myself, none of them are sponsored.
looks like something is wrong with Bitpanda referral link :). And is 10 Eur bonus still valid registering via referral link (source: https://support.bitpanda.com/hc/en-us/articles/115002576209-Bitpanda-Tell-a-Friend-program )?
Thank you Giedrus, it should work now. I’m not sure if you’re able to get the separate 10€ tell-a-friend bonus through my link, as I am redirected to the affiliate section in my account when I click on “Invite your friends to Bitpanda”.
Great review. Thank you
Thank you, glad you liked it!
which broker (Interactive Brokers or CapTrader) would you recommend now, that IB has cancelled monthly inactivity fee?
I am thinking to open account with IB and start investing in ETFs.
I just updated the post to reflect the change at IB. I would now go directly with Interactive Brokers, as the trading fees are a bit lower vs. CapTrader.
Registered in interactivebrokers and appeared that as an European resident I can’t buy sp500 🙁
Of course you can 😉 We just can’t buy US-based ones due to regulations, the ETF domicile has to be in Europe. You can get the Vanguard S&P 500 ETF for example, based in Ireland: https://www.justetf.com/en/etf-profile.html?query=S%26p++500&groupField=index&from=search&isin=IE00B3XXRP09#overview
Many thanks for this information. I’m trying to find the right broker for me, new investor. Interested only in long term holding of ETFs and maybe some stocks.
Have you considered the broker “xtb”? I’ve been doing some research and it seems also a good choice for Europeans. I’d like to know if you discarded for some reason…
Overall, between Degiro and IB which one will you choose?
Hey Dani, sorry for my late response. Seems like I completely missed your comment!
XTB is one broker I’ve heard mentioned a few times, so I probably should have included it in this broker comparison. Sadly I haven’t researched it enough yet to give you my opinion.
Personally, I don’t want to have to choose between the two, why not both? 🙂 Ok, I’ll still give you a response. For accumulating ETFs, I’d go with either IB or Degiro Custody. For distributing stocks/ETFs, I’d probably go with IB only because there is no share lending by default vs. Degiro Basic (I’m excluding Degiro Custody because of the dividend fees there).
Very helpfull. Thank you for you time spending on this issue. PL inverstor greetings
My pleasure Tomasz! 🙂 Sorry about my late response. AT investor greetings!
Thank you for all your information!
What if Interactive Broker don’t allow me to buy ETF because of PRIIP Regulation? I’m from Latvia.
I TRIED SEVERAL TIMES TO CONNECT TO DEGIRO, BUT DUE TO AN OLD TYPE ID CARD COULD DO IT. ARE THERE SIMILAR TO DEGIRO ( SIMPLICITY,SECURITY,FEES,ETC) PLATFORMS THAT I CAN GIVE A TRY UNTIL I DEMAND A NEW PASSPORT?
I WANT TO BUY ETFS VANGUARD LIFESTRATEGY.
Every broker will ask for a valid ID/passport for verification, so you’ll probably have to get a new one issued. You can find all my favorite brokers here.