What is the best online broker in Europe

Comparison portal

the essentials in brief

  • To buy stocks, funds or ETFs, investors need a securities account.
  • Direct banks or online brokers usually offer better conditions than branch banks.
  • A comparison by FMH-Finanzberatung shows which is the cheapest securities account depends heavily on investment behavior.

For a successful investment, savers no longer need a savings book, but a cheap securities account. You can get this from a branch bank, but direct banks and online brokers also offer one - sometimes with considerable differences in price and performance.

This is shown by a comparison of 20 depository providers of FMH-Finanzberatung (further information at fmh.de), which was created exclusively for the Handelsblatt. Which online broker is the cheapest depends to a large extent on investment behavior.

The eleven best online brokers from a total of 20 providers for wealthy customers

The ten best online brokers from a total of 20 providers for actively trading small investors

What is important in a securities account

The comparison of 20 depository providers, which FMH-Finanzberatung carried out on behalf of the Handelsblatt, shows: There is no single securities account that is recommended for all investors. When looking for the right broker, investors should pay attention to the following details:

  • An important criterion is that Consumer friendlinessA good depository has the lowest possible additional costs and is transparent with regard to the depository fees.
  • It also supports smaller investment sums. Not everyone has the ability to invest a large amount at once. That is why investors should be able to invest low sums in monthly installments.
  • A diverse selection of securities and funds makes it possible to act particularly flexibly. Ideally, the custody account not only offers access to the usual asset classes such as ETF, managed funds and bonds, but also to riskier types of securities such as stocks, warrants, venture capital and new products.
  • Savings plans with fair conditions for the execution of the savings plan are particularly important for investors with little start-up capital. This allows you to gradually build up a fortune with small sums of money. If the costs of implementing the savings plan are high, this reduces the profit considerably.
  • The Depot user interface should be aimed at private investors so that beginners can also use it to conduct their securities trading.
  • A free sample deposit helps to simulate transactions and to observe the development of stock prices without investing any money. This is especially helpful for newbies who still have to familiarize themselves with the subject.
  • A good The securities account is protected by the European standards for deposit insurance and investor compensation. In the event of the broker's insolvency, the repayment claims up to EUR 100.00 per person are covered by the deposit insurance (Section 4 (2) AnlEntG).

    Important: This regulation only protects the credit balance on the current, fixed, overnight or clearing account, but not the securities. That shouldn't even be necessary: ​​They are considered special assets and customers can at any time request a credit institution to surrender their securities. If it is unable to do so, there is a claim to compensation for 90 percent of the total value of the receivables, up to a maximum of 20,000 euros (Section 4 (2) AnlEntG).
  • A reliable customer service and individual advice are especially important for new investors. Their expectations should be based on the depot and order costs: the more expensive these are, the more support customers can expect. Direct banks and online brokers should also offer a minimum level of customer support. Ideally, the provider provides current financial market information and specific investment recommendations.
  • A wide range of national and international trading venues is not a must, but an advantage in many cases. For experts who are interested in over-the-counter and international securities trading, the choice of trading venues can also be decisive.

What does a depot cost?

Certain fees cannot be avoided when trading securities. It is all the more important that investors know what to expect before opening a securities account:

Custody fees

A custody account provider charges custody fees for the administration and custody of the securities. Depending on the fee model, they are billed every month, every two months, once a quarter or every six months. As a rule, branch banks charge significantly higher custody fees than direct banks or online brokers. Their offers are often even free of charge.

Order fees

Order fees are incurred when buying or selling securities. They are usually calculated according to one of the following three fee models: As a flat fee (“flat fee”) independent of the transaction volume, as a variable fee depending on the transaction volume or as a hybrid of a flat fee and a volume-dependent component.

The broker often charges order fees even if an order is not or only partially executed. They are usually also required when selling investment units.

Limit fees

Transactions can be narrowed down using various trading instruments. This can be helpful if investors only want to buy a security up to a certain price or sell it when a lower limit is reached. Depository providers charge a limit fee for these trading instruments. It must be paid even if the price limit for the transaction has not been reached.

Custody Fee and Exchange Rate Fees

A custody fee may apply for foreign securities, which is usually settled once a year. It is a small percentage of the total volume of foreign securities.

There are exchange rate fees when trading securities that are quoted in a foreign currency. The depository provider charges the fee for converting the foreign currency into euros.

Negative interest

A few providers charge negative interest for the credit on the clearing account. This penalty rate is intended to motivate investors to invest more money in securities.

Fees for the monthly savings plan execution

Fees for the monthly savings plan execution may apply when investing in ETF or fund savings plans. They are mostly based on the monthly savings rate - i.e. the amount that the investor invests in a savings plan every month. High fees that are incurred on a regular basis reduce the increase in value of the investment considerably.

How to find the right securities account

Ultimately, the amount of the total costs depends primarily on the investment behavior. It is therefore important to find the right depot for you.

1. The order fees should match the investment strategy

Not only the deposit costs are decisive for good conditions, but above all the order fees for buying or selling securities.

As a rule, the following applies: The larger the order volume, the higher the fees.

Online brokers and direct banks often only charge a flat fee - regardless of the size of the order. Then it makes no difference whether the order is 100 or 100,000 euros. This is particularly beneficial for investors with large investment sums.

These customers should look for a provider with flat-rate order fees such as Trade Republic or the DKB.

2. Consider the range of funds and free savings plans

Investors who are interested in long-term wealth accumulation should look for a securities account with a large selection of fund and ETF savings plans.

Most providers charge a monthly fee for running a savings plan. This is calculated either volume-dependent or volume-independent.

Many providers charge an execution fee of 1.5 percent per savings rate. For example, if the monthly savings rate is 50 euros, the savings plan would cost 0.75 euros per month.

That is a small sum, but in the long run it can significantly reduce the return on investment. Some providers charge a lower fee or even forego it altogether.

With actively managed funds there is another cost factor: the front-end load. In the savings plan, the broker bills you for each savings transaction. It usually amounts to two to five percent of the investment amount. Investments in ETF savings plans, on the other hand, can also be obtained without a front-end load.

Good to know: In the meantime, brokers are increasingly offering classic funds with or without a front-end load. It can be worthwhile to look for these so-called no-load funds - however, some providers charge above-average management fees for these funds. You should therefore always check which fees apply regardless of the initial charge.

Frequently asked questions about securities and online custody accounts:

What is a depot?

A custody account, also known as a securities account, is a bank account on which securities are kept and managed. It consists of the invested assets, an overview of all financial products in which the customer has invested and a clearing account on which the available money, including payments for the investments, is parked. Nobody can start trading in securities without a securities account.

How safe are depots in a crisis?

Securities accounts are also secured if a provider is no longer solvent. Thanks to the European deposit guarantee, the clearing account in the securities account is protected up to an amount of 100,000 euros. Owners also have a right to surrender their securities. If the provider is unable to comply, they have a claim to compensation for 90 percent of the value of these claims, but not more than the equivalent of 20,000 euros.

How do I earn money with my portfolio?

Investors earn money with securities especially when they sell. Because then you can convert price gains into money. Some companies also regularly pay dividends to their shareholders. For a successful investment, investors need an investment strategy and, above all, more complicated financial products should not be bought without in-depth knowledge. If in doubt, a sample depot can help with orientation.

How much cash should I keep in my portfolio?

Even experts argue about this. While risk-averse investors recommend investing as much as possible, security-conscious investors recommend a cash portion of around ten to 15 percent. Each investor has to decide for himself what the right path is. Anyone who has a lot of capital on the settlement account can react quickly and flexibly if there is an opportunity to invest. However, there is little or no interest on the account, and some providers even charge negative interest.

What is it like with deposit insurance for custody accounts?

The deposit protection only protects the clearing account of the securities account. In the event of the provider's insolvency, the liquidity reserves are therefore secured with up to 100,000 euros per person. The securities themselves are not covered by the deposit guarantee. However, these are the property of the investors. Even in the event of bankruptcy, the provider is obliged to surrender the securities - otherwise they are entitled to compensation for 90 percent of the value of the debt. However, the maximum value is 20,000 euros.

How can I trade stocks online?

To put it simply: all you need for online securities trading is a securities account. The broker offers the platform through which investors have access to various national and international trading venues. In this way, securities can be bought or sold.

How many shares are possible in a portfolio?

A securities account has no upper limit. So investors can buy as many stocks as they want. However, it is important to ensure that the portfolio spreads the risk as broadly as possible. Instead of just investing in stocks of a few companies, the money should be spread across different industries and maybe even flow into a few other forms of security.

How do I cancel my portfolio?

The way of termination differs from provider to provider. Depot holders are on the safe side with written notice of termination. The provider should confirm this. Find out in advance from your provider which notice periods you have to adhere to. Very often, order fees are also to be paid for the sale. If you want to change your securities account, your new provider will take care of the relocation of your securities.

What can I trade in my portfolio?

The type of securities that can be in the securities account depends entirely on the securities account. There are special depots for stocks, ETFs or pension and investment funds. With some portfolios you can even trade binary options or CFDs. Before opening the custody account, investors should consider which securities are of interest to them. If in doubt, it can make sense to open several depots.

Can deposit costs be deducted from tax?

Until 2009, investors were still allowed to claim expenses for capital investments as income-related expenses to reduce tax. In the meantime, things have changed: The costs of managing the securities account can no longer be deducted directly from tax.
Instead, only a flat-rate tax exemption of 801 euros for individuals and 1,602 euros for spouses is deducted from the investment income.

What does it cost to change securities accounts to another provider?

According to a ruling by the Federal Court of Justice, banks within Germany are not allowed to charge any fees for changing securities accounts. However, if one of the two depots is abroad, costs may well be incurred.
The new provider takes care of the transfer of the securities from the old to the new custody account. But be careful: it is not possible to trade in the relevant securities during the move.