Choosing the Best Broker for Long-Term Investment in Europe: A Comprehensive Guide
Welcome to BYOBanking! I'm Dr. Èric and I've written a guide to the best brokerage options for long-term investors based in Europe.
Over the past 10 years, I've been dedicated to passive ETF investing, growing a substantial portfolio towards the path of becoming financial independent. Throughout this journey, I've explored numerous brokers, aiming to find the best fit for European investors. Back until 2023 Degiro was free for a huge range of ETFs but it then changed. Moreover, there is a lot of competition on ETF and stock investments in Europe out there. Today, I’m excited to share my insights on 14 different brokers, highlighting their pros and cons to help you make an informed decision for your investment journey.
Key Features of a Good Long-Term Broker
When selecting a broker for the long haul, especially for buy-and-hold ETF investors like myself, certain non-negotiables are crucial:
Regulatory Oversight: Preferably by a financial regulator in Central Europe.
Currency Compatibility: Ability to buy shares in euros without conversion fees.
Low Fees: No account, inactivity, or deposit/withdrawal fees.
Transferability: Ability to transfer stocks or ETF shares to another broker.
No Share Lending: To minimize risks associated with broker insolvency.
Top Picks for European Investors
Based on my experience and research, here are my top picks:
Finanzen.net (ref code): Best for low cost and high variety of ETFs at 0 cost. My wife and I are using that one because it can create a plan that invests for you automatically at no costs. Moreover, the referral program gives you 10€ and 1 random stock.
Trade Republic (ref code): Best for low cost. Great for simplicity, low costs, and the added bonus of earning interest on uninvested euros (3.75%). The referral code gives you 10€.
Interactive Brokers: Best overall for security, low fees, and extensive market access. Ideal for serious long-term investors who can handle a complex interface.
Degiro (ref code): Still a solid low-cost option despite some drawbacks, such as mandatory share lending and minor fees.
Scalable Capital: Flexible pricing models and low fees make it a strong contender, especially for those in Germany.
Comparison of 14 best ETF brokers in Europe 2024: Best Brokers for Long-Term Investment
Here's a summary table comparing the key features of 14 brokers for long-term investment in Europe:
Broker | Account Fees | Trading Fees | Share Lending | Regulatory Body | Transferability | Special Features |
Interactive Brokers | None | Low (e.g., €1.3 for €1,000) | Opt-in | US (SEC, FINRA) | Yes | Broad market access, multi-currency accounts |
Trade Republic | None | €1 per trade | No | Germany (BaFin) | No | 2% interest on uninvested euros |
Scalable Capital | None (Free) | €0.99 (Gettex), higher (Xetra) | No | Germany (BaFin) | Yes | Three pricing models, 2.3% interest (Prime+) |
Degiro | None | €1 handling fee, €2.5 exchange fee/year | Yes | Germany (BaFin) | No | Low-cost, wide European availability |
Saxo Bank | Yes (Custody Fees) | High | No | Denmark (FSA) | Yes | High fees, solid regulation |
Trading212 | None | None | Yes | UK (FCA) | No | Investment pies, planned interest payments |
Lightyear | None | Low | No | Estonia (FSA) | No | Interest on uninvested cash, new broker |
Freedom24 | $7 | Low | No | Cyprus (CySEC) | Yes (High fee) | IPO investments, US ETFs, daily interest |
eToro | Yes (Inactivity) | None (Stock/ETF), High (CFD) | Yes | Cyprus (CySEC) | No | Copy trading, high currency conversion fees |
XTB | None | None | No | Poland (KNF) | Yes | Focus on CFDs, some physical stocks/ETFs |
Flatex (Germany) | None | €5.9 per trade, €1.5 for saving plans | No | Germany (BaFin) | No | Tax-efficient, no share lending |
Justtrade | None | Low | No | Germany (BaFin) | No | Low-cost, limited personal experience |
Finanzen.net Zero | None | Low | No | Germany (BaFin) | No | Low-cost. You can make an ETF plan that invests automatically at 0 cost. |
Smartbroker | None | None (Gettex orders > €500) | No | Germany (BaFin) | Yes | Moving to Baader Bank, 0.2% fee for saving plans |
Specialized Options for German Investors
For investors based in Germany, tax-efficient brokers like Finanzen.net or Smartbroker (Germany) can save you time and hassle with tax management.
Brokers for Short-Term and Speculative Trading
For more speculative trading, brokers like Trading212, Lightyear, Freedom24, eToro, and XTB offer unique features but come with limitations that make them less suitable for long-term investments.
Conclusion
Choosing the right broker is crucial for your investment journey. Evaluate your needs, consider the features and fees, and select a broker that aligns with your long-term investment goals.
If you found this guide helpful and would like to support BYOBanking, consider registering with the brokers through the affiliate links mentioned above. Your support helps keep this content free and informative.
Thank you for reading and happy investing!
By Dr. Èric BYOBanking.com
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