DEGIRO Review: What to Expect From the 2018 DEGIRO app

Given that DEGIRO trades on more than 60 stock exchanges in 30 different countries worldwide, it may surprise you to know that DEGIRO was founded as recently as 2013. As the brainchild of five former employees at a dominant online broker in the Netherlands, DEGIRO offers a wide range of fee-competitive stocks and investment products that can be traded and accessed through its easy-to-use web trading platform and mobile app. DEGIRO prides itself on having built the app in-house so as to be a highly bespoke tool for their stated 250 000 clients.

In this DEGIRO stock broker comparison, we will look at:

  • The main features of WebTrader (the platform) and the DEGIRO app
  • How WebTrader and the DEGIRO app are set out, their navigation and functionality
  • Order types and instruments
  • Withdrawal and funding options
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Access to the Platform: Is There a Demo and Do You Need a Deposit?

Opening an account takes an initial registration of 10 minutes, and there is no minimum deposit. It is quick, painless and, therefore, attractive to novice or low-risk investors.

Have the following handy:

  • A copy of your passport or ID
  • The bank account number from which your investment account will be funded

Then, you need to complete three steps:

  • You need to complete an appropriateness test to verify that you are familiar with the risks of trading
  • Agree to the terms and conditions for real-time prices
  • Transfer money to your investment account

If you’re a UK citizen, you need a mainland UK bank account in local pounds. You can’t make transfers from UK overseas territories or dependencies such as Jersey.

Once you have submitted all the documentation and your account is verified, you get access to the web platform, WebTrader, and can then download the iOS or DEGIRO app Android. No demo is provided and separate software is not required. The lack of a demo isn’t a real bar to trading, thanks to how user-friendly the DEGIRO trading app and platform are. However, there is no research on the DEGIRO app, unlike on some other stock broker tools. There is also a lack of education in general for first-time traders. However, the basic information, such as explanations of order types, is on the website and platform. A glossary on the website or on one of the external-facing communications platforms would have been helpful, though.

Transactional Safety, Deposit Safety and Data Privacy

Given the spate of high-profile data breaches worldwide in 2018, one of the first things any stock broker comparison needs to look at, and that an investor is likely to be vigilant about, is if trading is secure and whether the funds invested are financially safe.

DEGIRO’s external communications channels go into great depth about what kind of personal data is collected and why, and stress that extreme security measures are in place to protect client accounts and data, without offering details on how exactly their trading platform is secured. DEGIRO is supervised by the Dutch Data Protection Authority (Autoriteit Persoonsgegevens) to ensure they adhere to the provisions of the Personal Data Protection Act. Sophisticated, two-step verification logins and other online security features are evident.

DEGIRO is not a bank, and as such cannot – and does not – use your money for its own business purposes. If this were to be the case and DEGIRO lost money in the process, your financial inputs would be at risk. Instead, your money is held in a custody account in the form of cash funds, run by an independent legal custodian. As such, it is ring-fenced from any exposure to DEGIRO’s business dealings. This means that were DEGIRO declared bankrupt, it would not affect your money in cash funds.

How is DEGIRO Regulated and What Financial Warranties are in Place?

Following on from the above discussion, the next logical enquiry you are likely to have is about how DEGIRO is regulated.

As a Dutch company, DEGIRO is a licensed investment firm based in the Netherlands. As such, the Netherlands Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB) financially supervise DEGIRO. DEGIRO also performs its licensed investment services abroad from the Netherlands, under the so-called ‘MiFID passport’ or ‘MiFID cross-border service’ regime. However, DEGIRO is also registered with other supervisory bodies in other countries in which it provides services. In the UK, DEGIRO is registered with the Financial Conduct Authority (FCA).

As for investor protection, the applicable investor protection scheme, given that DEGIRO is Netherlands based, is the Dutch Investor Protection Scheme (Beleggerscompensatiestelsel), as DEGIRO is a licensed investment firm authorised by the Netherlands Authority for the Financial Markets (AFM) for the provision of investment services.

Under this scheme, individual clients are protected up to €20,000. This usually applies in the event of a catastrophic occurrence, which would have to be severe indeed, given that your money is held in cash funds in custodian trusts. Should you need to know exactly under what circumstances this protection payout will kick in, you’ll find information about the Dutch Investor Protection Scheme in English on the Dutch Central Bank or De Nederlandsche Bank website.

DEGIRO Trading App Platform: The Main Features

The DEGIRO app is accessible, especially for first-time users, and presents you with a fast, efficient trading capability from anywhere in the world, at any time. There are two trading platforms:

  • A web trading platform
  • A mobile trading platform, available on iOS and the DEGIRO app Android, containing the full suite of functionality

The app lacks some frills and fancies but is efficient nonetheless, and this is where it really shows that the app was created in-house and tailored to DEGIRO client needs. You can access your portfolio, stream quotes, obtain market news and access a range of order capabilities. Notably missing is any kind of substantial research. The trading platform is also not very customisable.

The app’s main features are the following:

  • A Fast Trading feature. The QuickOrder button at the top of every page allows you to order and respond immediately
  • Prices streamed in real time. Get the streaming rates for the major European markets and US exchanges
  • A Bid / Ask spread in an order book. View the depth of the order book on Euronext up to five levels
  • The ability to place orders by amount. You submit your orders by number of stocks, as well as by the order value. This means you’ll always know what amount you are buying or selling without converting currency
  • The ability to create a personalised favourites list. You can easily create, maintain and view a list of your favourite products

Web Trading Platform and App: A Closer Look at WebTrader

The app has all the important functionalities of the web trading platform, so let’s now take a closer look at WebTrader, the platform, in this DEGIRO review. When you log in to the platform, you’ll see the following, which is practical and not too overwhelming:

  • Your portfolio overview
  • Your transaction list – in-process and open transactions, last transactions and announcements
  • Live price lists and market information
  • A news pane containing news snippets and summaries with brief news

You can hide the first two if you wish, but not the price data or news. That is about as much customisation as is offered here.

Navigate your menu for further options. It is logically set out and the search console brings up results in different asset classes as they relate to one company, which is convenient. For example, if you search for ‘XYZ oil’, you’ll retrieve information on futures, stocks, warrants and anything else related in the form of an interactive indicator chart. The chart cannot be saved and this may have been deemed futile, given the changing nature of the information.

After placing your order instruction, you’ll get an email confirmation. At this point, SMS/text message notifications are not yet available, but the company has a stated commitment to innovation and it may be one of the improvements on the cards.

Order Types/Durations and Instruments Available

DEGIRO offers shares, bonds, options, futures, ETFs, investment funds, leveraged products, warrants and CFDs as instruments.

These are the order types:

  • Day Order – A Day Order will stay open until it is executed during the trading day or until the applicable market closes that day. If you have not executed by the end of the trading day in that specific market, the order will be automatically deleted. If you place a Day Order when the market is closed, this will be placed on the next trading day.
  • Good Till Cancelled (GTC) – Unlike a Day Order, a GTC will roll over into the next trading day if it has not been executed by the end of the current day. The trading venue rules apply. US exchanges, for example, will be valid for 90 days. However, there is no guarantee that an order will not be cancelled, due to external factors such as an action of the underlying company. Always monitor open orders.
  • Limit Order – This allows you to set a minimum sell price or maximum buy price against which to execute your order. Your order will never be executed outside of these parameters.
  • Market Order – You place an order to execute your transaction at the best possible price at the time of execution, which may, of course, be necessary to execution in the first place. There is always the risk that with certain products, you’ll receive a price much lower than anticipated.

Funding and Withdrawal Options

There are two funding options or ways to transfer funds: through bank transfer or SOFORT. This is a drawback but the upside is that DEGIRO does not charge you to make transfers or deposits when you do a bank transfer specifically.

DEGIRO has fairly restrictive and finite rules for accepting money transfers. Firstly, you must be transferring money from one of the accepted countries as stated on their website. The funds must also be held in your name and transferred as such. The funds reflect in two to three days on WebTrader.

SOFORT is a third-party funds transfer provider. It may be that your bank is not linked to SOFORT or does not accept it as a means of channelling funds, in which case you have to make a manual bank transfer. SOFORT is a quick-clear deposit provider, so funds take about 30 minutes to reflect in WebTrader.

You cannot withdraw through SOFORT – you must use the bank transfer method. When transferring to your bank account from WebTrader, DEGIRO says this takes about three days, but in reality, funds sometimes show up in 24 hours.

So, while there are limited ways of moving your money in and out, the process is expedient, generally quick and cost-effective.

Customer Service

You can contact customer service by phone or email, but there is no live chat option. The customer service agents are helpful and very knowledgeable, and there is a decent response time.

If you are from one of almost 20 countries listed by DEGIRO, you can speak to a customer service agent in your native language. This is a good innovation, as many other call centres are in English only. The trading desk is open weekdays from 7 am to 9 pm, providing more extended hours than many other brokerage houses. The customer service desk also operates within these hours. However, they are not contactable over weekends, which may inconvenience some clients.

You can also email customer support, with DEGIRO promising to reply ‘as soon as possible’. In reality, though, you can expect a return email in a day. The focus of the answers is on quality, not length. It is unlikely you won’t get a thorough answer to your query and it is mostly the case that you won’t have to fire off a follow-up email or make a call.

If you prefer to make orders via the order desk, a small fee is charged, whereas no fees are applicable if you do so via the trading platform and app.

A Low-Cost, Efficient, No-Frills Service

Would we back this company as the best DEGIRO stock broker? That depends on your purposes. DEGIRO asserts that you will save about 85% of your transaction fees compared to industry competitors, which does not seem to be an exaggeration. This is one of the main reasons fuelling their continued success as a disruptive model of stock broking. Given the no-frills approach, the access to international markets is very good and the DEGIRO trading app ranks highly in Google Play and the Apple iStore.

It is, therefore, perfectly suited to you if you know what you’re doing and need quick, no-fuss trades at a substantially lower cost, or if you’re quite new to trading and don’t need a sophisticated educational offering. DEGIRO does not provide deep research, insight and education, unlike some competitors.

Besides a lack of research, other drawbacks are a lack of funding and withdrawal options, as well as a lack of ISA and SIPP account options.

Stocks Highlights