Hey! This article will give you our honest review of a recent online broker: BUX Zero, a trading app that belongs to the Dutch fintech startup BUX B.V.
BUX Zero is a mobile-only, commission-free stock, ETF and crypto trading app with over 700k users. Currently, it is only available for investors from Austria, Belgium, France, Germany, Ireland, Italy, Netherlands and Spain.
That’s BUX Zero in a nutshell. If you want to find out what our research team has to say after carefully analyzing BUX Zero, keep on reading our BUX Zero Review. Here’s what we’ll cover:
1. Overview
Launched in 2019, the BUX Zero app has positioned itself as an affordable way for Europeans to increase their savings. It brings a simple and elegant way to start investing.
The coronavirus pandemic brought many young investors to the stock market who do not want clutter and confusion. BUX Zero saw that as a bigger opportunity to increase its client’s base.
Moreover, BUX Zero did not experience any system failures during this period, a strong confirmation that its backend broker (ABN AMRO Clearing Bank N.V.) has paid off. Robinhood’s clients had a different experience (read here).
At the moment, BUX Zero remains only as a mobile app which means that everything from account opening to your investment activity is made 100% through your mobile device.
If you already know where you want to allocate your hardworking cash, the app might be a good alternative for you because, by just giving you some variety of financial products with minimalistic app features, it means less additional costs for your wallet.
Source: https://getbux.com/bux-zero/
BUX Zero provides “the investment service of reception and transmission of Client Orders”. What does it mean? Well, it means that it only acts as an intermediary between you and the party you are buying/selling from the financial instruments (stocks, ETFs and cryptos), with no complex in-house features which allow keeping its cost low!
Despite having a contact support team, it provides neither investment nor tax advice.
If you do not have the time to read the “Client Agreement” document, let us mention a crucial point you should be aware of, but, unfortunately, few investors pay attention to it.
Using the BUX app, you give your consent to lend the financial instruments held in your account (for short-selling, for instance). While lending your shares allows BUX Zero to significantly reduce costs and have a low commission structure, this also implies an additional small (yet existent) risk for investors. To mitigate it, BUX will procure to hold collateral to at least the value of the lent’s financial instruments.
In addition to BUX zero, BUX’s flagship platform, you can still use Stryk to invest in CFDs and BUX Crypto if you only want to buy cryptocurrencies. Note that both of these services are expected to be combined with BUX Zero for consolidation processes as the company progresses to create a single destination for investors.
BUX Zero Highlights
| 🗺️ Supported Countries | 8 European countries |
| 💰 Stocks and ETFs fees | Up to €1.99 per order |
| 💰 Currency Conversion fee | 0.25% |
| 💰 Monthly Service Fee | €2.99 |
| 💵 Minimum Deposit | €0 |
| 📍 Products offered | Stocks, ETFs and Cryptos |
| 🎮 Demo Account | No |
| 📜 Regulatory entities | AFM |
2. Pros and Cons
Pros
- Commission-free for “zero orders” for EU stock, ETFs and Crypto*
- Offers one Free Share of up to €200 upon deposit
- Fractional investing
- Modern and user-friendly mobile app
- No inactivity, custody, deposit or withdrawal fee
- No minimum required deposit
*Only available for Netherlands, Belgium, Ireland and Spain clients. Also, the commission for orders in cryptocurrencies is waived for the clients holding 1000 or more BUX Tokens in the BUX account.
Cons
- Month Service Fee of €2.99
- No demo account
- Limited financial products
- Only available in eight countries
3. Products and Markets
The investment options available are still limited in terms of the variety of products and markets to choose from. It offers US and EU stocks (Dutch, German, Belgian, French, and Austrian) and only 30+ ETFs to trade. Check its product list for any updates.
Since January 2022, crypto trading is also available for free! Investors can trade Bitcoin, Ethereum, Litecoin, among others. This service is only available for people from the Netherlands, Belgium, Ireland and Spain.
It is virtually impossible for investors with smaller amounts to buy one share of Amazon, Tesla, Alphabet (Google), and other big companies. That´s why BUX Zero started offering fractional investing. For as low as €10, you can buy a portion of a share, allowing you to further diversify your portfolio. So, instead of purchasing a full share of Tesla for $1000, you can choose the amount you want to invest and receive your proportional share of the stock.
Finally, BUX Zero offers monthly investment plans in stocks and ETFs* of your choice for €10 per month, regardless of how many stocks and ETFs are included in the investment plan. If you do not want to invest in a particular month, no fee will be charged that month.
*from the 21th of August 2023, Bux Zero started offering iBonds ETFs
4. Fees Snapshot
When it comes to fees, BUX Zero is very transparent. First of all, it charges no commission for Zero Orders (EU stocks or ETFs).
For market and limit orders, it only charges €1.99 for EU stocks and ETFs and €0.99 for US stocks. And in the case of crypto, it is either €0 or 0.50% (the commission for orders in cryptocurrencies is waived for the clients holding 1000 or more BUX Tokens in the BUX account).
“How does a Zero Order work?” you may be wondering. In simple terms, a Zero Order allows BUX Zero to collect all of the users’ orders for the day and send them to the stock market at the end of the trading day, between 4 and 5 p.m. (CET). However, keep in mind that the price executed might not be the one you were expecting.
For that reason, BUX Zero has built a safety measure to avoid overpay or underselling. That is, BUX Zero will automatically cancel a buy order if the difference between the market price at the end of the day is higher than 4 per cent than in the moment you placed the order. For a sell order, the difference in pricing may not be higher than 5 per cent.
Last but not least, the BUX trading app also earns money through FX markup when you want to buy US stocks. As you know, such stocks are quoted in dollars, so you need to convert some of your euros to buy them and the other way around when selling them. For this service, BUX Zero applies a fee of 0.25% to the EUR/USD FX spot rate. Example: If €1 is worth $1.10 in the market, you will only receive $1.09725.
Like any other broker, it charges a spread cost indirectly implicit in the price you buy/sell any security (detailed explanation in the comment section!)
5. Safety and Regulation
In terms of safety, BUX B.V. is authorized and regulated by the Dutch Authority for Financial Markets (Autoriteit Financiële Markten – AFM).
As such, their clients benefit from the Deposit Guarantee Scheme (DGS) that assures their money up to €100,000 in the event of the bankruptcy of ABN AMRO Clearing Bank N.V. and the Investor Compensation Scheme (ICS) compensates your investments (assets) up to an amount of €20,000 if BUX B.V. goes bankrupt.
However, it is just a legal requirement because, in practice, it should not “matter” since your cash (temporary money for settlement purposes) and assets are held in a “Stitching” (a foundation under Dutch law) called BUX Custody which has the sole purpose of holding Financial Instruments and money for Clients.
- The money that appears in your account balance is in ABN Clearing Bank
- The assets are held in BUX Custody
Do you want to read a deeper analysis? Check out our dedicated article on investment protection (for EU investors)!
6. Countries Accepted
BUX Zero is available in eight European countries offering only EUR-based accounts. Their services are available in the following countries: Austria, Belgium, France, Germany, Ireland, Italy, Netherlands and Spain.
Looking for an online broker that accepts clients in other countries? We’ve reviewed other leading online brokers that operate globally, such as eToro, DEGIRO, and XTB.
Did we answer all your doubts through our BUX Review? Did it help you make your decision regarding opening an account in BUX Zero? Let us know your feedback!
Franklin is a CFA Level III Candidate with 3 years of experience in Wealth Management as a Fund Research Analyst and the Host of the "Edge Over Hedge" YouTube Channel.
