Brokerage fees

[Ether]

I just opened a "Custody" account with them, normal accounts do not charge taxes on dividends but shares can be lent to third parties (their prime broker: Morgan Stanley for example).

Order placements for buy and hold are super attractive and in "Custody" we are taxed 1.00€ + 3.00% of the dividend (maximum 10.00%), which is still cheaper than at Swissquote. Finally, for order placement for the equivalent of 5,000.- in US shares, they charge less than 1$ compared to currently 35.- at my broker.

https://www.degiro.ch/data/pdf/ch-fr/FR-CH_Tarifs_CUSTODY.pdf

Basically, unbeatable on paper, but in terms of security and reputation? Hard to know. User feedback doesn't look bad though...

https://www.degiro.ch/fr/tarifs/

[Ether]

But after reading several reviews and coming across your post: https://www.dividendes.ch/2014/03/sites-de-courtage-prix-vs-securite/

I will stay with a Swiss broker. 🙂

[Mystic]

I'm there with a normal account.

To date I have voluntarily a small portfolio and wish to verify their reliability. I will be able to take a position as soon as the documents for the 2017 taxes have been issued, in March 2018.

[Jerome]

Hello, I don't know this broker, apparently Dutch (?). It is certainly cheap, but still more expensive than Interactive Brokers whose reputation is well established. As for choosing a foreign broker, I prefer the latter. And be careful, if I read correctly, for the dividend (€1.00 + 3.00%), these are processing fees. So it would be added to the withholding taxes. In any case, you cannot escape tax, even with a foreign broker. For example, with Interactive Broker, for a US share, I have a withholding of 15% for the US tax authorities only, but I will be taxed as income for the rest by the Swiss tax authorities during the annual declaration.

So if these are dividend processing fees applied by the broker, it's far from great! Curious to have Mystik's feedback on this point.

[Mystic]

I am with a basic account and not a custody account. The custody account gives you access to more products. Since I am stopping at stocks, the basic is fine.

For now, the fees are good. I haven't had any bad surprises to date.

I find the platform pleasant. The exchange fees are 0.1% on the current rate if you choose an automatic exchange

[loorloop]

Good morning,

I am at Degiro with a Basic account. In my opinion the Basic account (and not Custody) with them is more interesting than with IB.

With a Basic account there are no dividend processing fees (unlike Custody) the only fees for Buy and Hold are the brokerage fees in the United States (0.5€ + 0.004 per share); 2.5€ per year of connection fees to the stock exchange, and 0.1% (of the amount exchanged) of exchange fees during an automatic transaction. Note that it is possible to deactivate the automatic exchange (which automatically converts both during a brokerage in a foreign currency and the receipt of dividends in a foreign currency (exchanged in the base currency of the CHR or EUR account) and to receive dividends in USD and not CHF. If the automatic exchange is deactivated, a manual exchange transaction can be made (10€ + 0.02% of the amount); note that it is possible at any time to deactivate/reactivate the automatic exchange.

No Mystik, the Custody profile does not give access to more products, it is a basic account but with Custody, the securities are deposited outside of Degiro which only executes and does not hold the securities. In basic, Degiro keeps the securities with them and can potentially be lent to make short sales. Note that there are these famous dividend and coupon fees present in the Custody profile and not in the basic.

Afterwards it is possible to "improve the basic account (but impossible to change a custody account) to Active, which allows access to more products such as options, to use margin effects, short selling, etc.

I asked the question regarding the risk associated with the loan of securities with a Basic account, here is the broker's response:
The risk associated with securities lending at DEGIRO is minimal or non-existent for several reasons. The first is that on average, the volume of securities lent by DEGIRO is approximately 1%, which is a very small proportion of the securities held. In addition, when a client wishes to carry out a short transaction, a minimum guarantee of 104% of the value of the short position is required. Also note that no default has ever been observed following a securities loan.

I imagine that at IB (to be verified), it's the same, the securities can be used by others to make short sales. However, I don't agree with Jérôme: the fees are much higher at IB because there is a minimum fee of 10$ per month (also charged if inactive)... If you have been trading for a long time, IB is more interesting in particular because the changes are blinding but for pure Buy and Hold, 120$ per year is huge I think...

However, for the French, it is currently impossible to open a PEA but they are doing everything they can to be the first foreign broker to be able to do so.

I personally have two securities accounts, one in EUR and one in CHF, both as a Swiss tax resident.

 

[loorloop]

However, please note that I received a strange message from them yesterday saying that my account was in debit of €1.28 (without specifying the identifier...) and that I had to regularize my situation, but there were no problems on my two accounts... I don't understand, in short...

With a little more hindsight I could tell you whether or not I recommend the broker in terms of customer service, and especially the correct or incorrect treatment of dividends.

I forgot to mention that on a large selection of ETFs (including the emerging countries bond in Jérôme's EX-US strategy), it is possible to have one free order per month (this can be useful if you want to put some liquidity on bonds for example) and +1 if each new order is both in the same direction as the first and more than €1000.

[Jerome]

Small clarification for IB

1) no minimum fee of $10 per month if the account is over $100,000

2) if under 25 years old: minimum fee 3 USD per month

3) Fees only apply if transaction fees fall below $10

 

 

 

[Ether]

Thank you very much loorloop for your feedback,

Without wanting to ask too personal questions, how long have you been with them?

Do you see yourself with financial capital of more than 200k or 500k euros with them in the long term?

[loorloop]

Thank you very much Jérôme for the details 1) and 2) that I did not know.

Indeed, for a portfolio greater than 100,000 USD it seems much better to me to be with IB, moreover it is a very solid broker… And the exchange service is much simpler.

Degiro therefore seems to be a good broker to start with (customer service in French, no minimum deposit of 10,000, and no minimum fees of 120$ or 36$ for under-25s) and nothing prevents you from moving everything to IB with a larger portfolio.

@Ether I have only been there for a month which means I cannot recommend the broker at this time. I am simply observing how they work and their fees.

I only have a small capital for now. For 200,000/500,000 Too early to say especially since I have no certainty about their ability to correctly process dividends. I would rather say no. I would rather put my money at IB from 100,000 especially since there are no more these famous fees as Jérôme pointed out.

In particular, Degiro is necessarily linked to ONE bank account in your name…! A little trip to Europe, how do you do it? You have to change USD into CHF, then once your CHF is in your account into EUR with another service (a broker or transferwise). Same for sending money to a distant European uncle… Very annoying then.

Personally, for traveling I use a EUR account at N 26 which charges no fees on foreign currency transactions, so the way Degiro works is a no-go for me in the long term.

[Jerome]

In this last case just check the securities transfer fees. We often forget to do this when we open an account and then we are a prisoner of our broker.

[loorloop]

Thanks Jerome for this warning. The fees are "significant" (but let's not forget that there are the savings of the IB transaction minimum):
10€ per line + external cost

“External cost” probably refers to the costs charged by the new broker.

I was thinking that given the relatively low brokerage fees, it would be better to sell everything and then buy back your portfolio from your new broker (which allows you to do some arbitrage at the same time). Or maybe there is the possibility of having these fees financed by the new broker?

 

[Jerome]

10 euros is correct.

Indeed, some brokers agree to cover transfer fees.

[Mystic]

What I appreciate about Degiro is their responsiveness in terms of customer service.

I wanted to test dividends and received 2 dividends (2 different stocks). Seems to be fair so far.

So far I have had good experiences with them, both in terms of price and service.

 

[Mystic]

Now that 2017 is behind me, I was able to test the services of De Giro:

Around February-March, we receive an activity report. This mentions purchases and sales. It also classifies dividends received by country but not by company. This can cause some difficulties in requesting a refund of withholding tax (I have a few companies in Germany in my portfolio and on the request, I have to mention each company with the dividend that goes with it).

On the other hand, we agree that in terms of price, it is unbeatable.

[Author]

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