DEGIRO vs. Interactive Brokers: 2024 Comparison

DEGIRO vs Interactive Brokers in a nutshell

1. Flash overview of DEGIRO and Interactive Brokers

a) DEGIRO

Founded in 2008 and offering brokerage services for retail investors since 2013, DEGIRO is a pan-European online discount broker present in 15 countries. Following a successful merger with Flatex Bank AG, a German-based banking institution, DEGIRO currently runs the largest direct retail brokerage business in Europe, possessing its own banking license. 

b) Interactive Brokers

Founded in 1978 by its current chairman, Interactive Brokers (IBKR) is a US-based multinational brokerage firm operating in several locations across five continents. European clients are served through the company’s UK branch, Interactive Brokers UK Limited. As a brokerage-only business, IBKR is a direct member of the world’s major exchanges and partners with some of the largest top-tier international banks for custody services.

2. Product offering

Both Interactive Brokers and DEGIRO offer a very extensive range of financial instruments, covering a wide variety of asset classes, tradeable through exchanges scattered across different geographies or OTC.

The table below summarises the products available for trading with DEGIRO and Interactive Brokers (UK branch).

Sources: DEGIRO and IBKR UK Limited websites

Besides the lack of CFDs, fractional shares, and Bullion-priced metal-currency pairs, when compared with IBKR, DEGIRO also offers a significantly reduced variety of individual instruments for the majority of the available asset classes.

Crypto assets exposure

Despite not permitting direct trading of cryptocurrencies and other crypto assets, both DEGIRO and IBKR (UK branch) allow you to gain exposure to the crypto space through ETFs and ETNs, and, exclusively in the case of IBKR, also crypto futures.

Product offering conclusion

As a global broker with access to over 150 exchanges in more than 30 countries/regions, IBKR clearly has a broader product offering than DEGIRO (33 exchanges). In fact, IBKR has the largest range of financial instruments in the online brokerage universe.

3. Trading platforms

One of the key value propositions of an online broker lies in the investment platform it provides. In this field, solid and competitive brokers, such as IBKR and DEGIRO, tend to pursue an innovative approach in an attempt to supply investors with the best and most recent trading and decision-supporting customisable tools.

DEGIRO’s trading platform

In this regard, DEGIRO offers a browser-based platform, WebTrader, and an app version of its platform for devices running iOS and Android operating systems. 

DEGIRO’s trading platform is largely intuitive and user-friendly, making it a good fit for initiating and/or less active investors. It also features increasing high-level analytical, note-taking, and informational tools, such as interactive charts, news, economic calendar, ESG ratings, analyst recommendations, and financial information.

Interactive Brokers trading platforms

Among seven different trading platforms that Interactive Brokers makes available to its users, presenting solutions for all sorts of investors and traders, it is worth highlighting:

• A browser-based simple platform, Client Portal
• A downloadable software-based trading venue, Trader Work Station (TWS), featuring in-depth analytical and informational tools, far more comprehensive and powerful than the ones offered by DEGIRO, as well as several highly sophisticated trading features, according to the asset being traded. These include 50+ order types and algorithms, portfolio analysis, modelling and risk management tools, API integration, and other professional tools, such as the OptionTrader, which can delight even the most technically demanding institutional traders.  (Make no mistake: with all its complexity, TWS is the real Ferrari of trading platforms!)

To trade on the go, IBKR also offers two solutions:

• IBKR Mobile – its first mobile platform, containing a fair amount of TWS key functionality; and
• IBKR GlobalTrader – a newer mobile version, resulting from IBKR’s effort to make its trading solutions simpler and more accessible to anyone, including beginners. As a context note, one of the most frequent criticisms made of IBKR is its complexity. IBKR Global Trader is exactly the answer to that: an easy-to-navigate, user-friendly app that compares respectably with its peers within the segment of simple mobile trading platforms with reduced functionality.

Trading platform conclusion

As far as trading platforms go, IBKR is unmistakably superior to DEGIRO in technology, features, and diversity of solutions. Even so, DEGIRO’s platform definitely has value in it and is most likely able to meet the needs of novice-to-intermediate users or investors, especially if they follow a longer-term investment approach.

4. Account Types

Another important aspect of online broker choosing is to have your account type match your risk and investment approach.

Understanding account types

There are two fundamental types of brokerage accounts: 

• Cash – where trading of derivatives and short-selling of securities is either not permitted or significantly limited.
• Margin – where trading of derivatives and short-selling of securities is widely available. It is also possible to borrow, with an associated financing cost, against your current holdings (collateral) to further expand your investment financial capacity. Margin accounts are constantly monitored for risk, and positions may be closed if the collateral value drops below a certain threshold established by the online broker. Finally, it is worth noting that this leverage may result in losses that surpass the capital invested in abrupt adverse market movements.

To switch from a lower-risk account type to a higher-risk account type, both DEGIRO and IBKR carry out an adequacy assessment, covering key aspects such as the user’s knowledge, experience, and wealth.

DEGIRO’s account types

Applying the two concepts above , DEGIRO defines four account profiles: 

• Basic – no trading of derivatives and borrowing is allowed up to 70% of long positions in securities (stocks, bonds, and mutual funds).
• Active – derivatives are available for trading, short-selling is permitted and borrowing is allowed up to 33% of long positions in securities.
• Trader – derivatives are available for trading, short-selling is permitted and borrowing is allowed up to 70% of long positions in stocks and mutual funds and 80% of long positions in bonds. 
• Day Trader – Day Trader accounts are Trader accounts with specific margin conditions during regular trading hours, granting higher leverage in intraday trading activity.

Interactive Brokers account types

Interactive Brokers also offer  different account profiles:

• Cash account – short-selling is disabled, derivatives trading is limited, and margin requirements on futures are conservative. Cash from the sale of assets becomes available only upon transaction settlement. 
• Reg T margin account – short-selling is enabled, and derivatives trading is largely possible for exchange-traded and OTC products. Proceeds from closed positions are recognised immediately. Margin requirements are calculated under US Regulation T rules (even for European investors with this type of account).
• Portfolio margin account – differs from Reg T in the sense that margin requirements follow a risk-based calculation set by IBKR, being typically lower than Reg T and, thus, permitting higher leverage. An overall account value (“Net Liquidation Value”, in IBKR’s terminology) of USD 110,000 or equivalent is necessary for Portfolio margin account eligibility.

Account type conclusion

Looking at account types, despite different technical nuances in risk monitoring and their respective leverage and liquidation implications, IBKR and DEGIRO have similar solutions. DEGIRO’s margin account profiles are easier to understand and use, have lighter activation requirements andallow greater risk-taking than Interactive Brokers.

5. Account Currencies

Often, you trade financial instruments denominated in multiple currencies. Hence, to minimize the possibility of incurring currency conversion fees, it is essential to analyze account options for base currency and currency balances.

DEGIRO’s account currencies

DEGIRO offers three pan-European base currencies: EUR, CHF, and GBP, automatically selected per the investor’s country of residence. If the investor’s country of residence has a local currency that is different from those mentioned above, the account base currency will be set to EUR. Yet, in such cases, local currency deposits will still be accepted. However, they will be automatically converted by DEGIRO, generating an implicit conversion fee, and only then credited, already in EUR, to the client’s account. (E.g., If you are a Poland-based investor and transfer funds to your DEGIRO account in PLN, the automatically converted [post-fee] equivalent EUR amount will be credited).

Importantly, DEGIRO does not support the change of an account’s base currency, meaning that if, for some reason, you want to alter the base currency of an existing account, you will be forced to open another account. 

Regarding currency balances, through manual configuration, DEGIRO allows clients to hold cash balances in currencies other than the base currency. However, to be withdrawn, such funds need to be converted to the account’s base currency, again generating a conversion fee.

Interactive Brokers account currencies

On the other hand, as a multinational bigger and more experienced player, Interactive Brokers allows margin accounts to have 20+ base currencies account holders can change freely through manual configuration. In addition, IBKR also supports deposits and withdrawals in non-base currencies in margin accounts (as long as IBKR offers the currency at stake  as an account base currency).

Account currencies conclusion

For many investors and traders, namely the ones who seek geographic diversification, account currency options are a non-negligible issue since, as explained above, currency conversions mean additional fees. On this front, Interactive Brokers is unambiguously superior to DEGIRO, allowing investors to save money on cost conversion, even if that comes with a higher degree of complexity.

6. Account opening, cash and portfolio transfers

Account set-up, cash, and portfolio transfers are also worth looking at when choosing an online broker.

Account opening – DEGIRO vs Interactive Brokers

Interactive Brokers and DEGIRO both have an account opening process that runs fully online, with IBKR demanding more information. They both require documentation to prove ID, address, and, in the case of IBKR, proof of employment. Neither of these brokers establishes a minimum amount to be deposited to open an account. 

Account opening approval is typically faster with DEGIRO, averaging one business day, whereas with IBKR, it might take, on average, two to three business days.

Cash Transfers – DEGIRO vs Interactive Brokers

For both brokers, cash deposits and withdrawals are made essentially via bank transfers, with no broker-added fees. In the case of IBKR, it is necessary to prompt the deposit process (deposit notification) on the broker’s account management interface – an additional step compared with what is required by DEGIRO.

Portfolio Transfers – DEGIRO vs Interactive Brokers

Both brokers support transfers of existing portfolios in and out of their accounts. Currently, IBKR’s process seems to be more streamlined, as a request form can be filled out and submitted within the account management interface, while, at the moment, DEGIRO still requests direct contact via email. In any case, the process of transferring securities from one institution to another should always be seen on a case-by-case basis, as it requires the two institutions to interact and analyse the assets to be transferred.

Account opening, cash and portfolio transfers conclusion

As a highly regulated US-based group with no banking licence, Interactive Brokers tend  to be slightly less agile, namely in completion timeframes. In this regard, DEGIRO is generally ahead of Interactive Brokers, with more expeditious operational and administrative processes.

7. Pricing – trading and non-trading fees

When choosing an online broker, you often want to study the costs involved. While that is a more than fair concern, IBKR and DEGIRO both offer their users very competitive pricing schemes with no inactivity fees.

First, it is important to establish that there are fees for trading, where the broker typically marks-up the exchange fee or formulates one (in OTC products), and for non-trading services, currency conversions and access to market data are two of the most important given their recurrence. The latter are charged by exchanges and passed on by the broker to its clients, usually with no additional cost.

Trading fees – DEGIRO vs Interactive Brokers

Looking at trading, DEGIRO, as a discount broker, has relatively low fees on most products (€1 external fee applies). 

Interactive Brokers, as one of the largest brokerage institutions in the world and a direct member of several exchanges, also presents extremely competitive fees. Interactive Brokers offers two different pricing schemes you can choose from: fixed and tiered. If you trade large amounts monthly, the tiered option might be worth considering, as the variable and minimum fees decrease as monthly trading volume increases past certain levels.

As a result, IBKR becomes unequivocally cheaper for specific products when you trade above pre-established volumes. 

Fortunately, IBKR and DEGIRO are both very transparent about their pricing for trading the several products that compose their offering. As such, we invite you to visit their IBKR and DEGIRO (make sure you visit your local website) pricing pages to check the products you are interested in and/or read our updated individual reviews of Interactive Brokers and DEGIRO, both featuring a fee snapshot.

Currency conversion fees – DEGIRO vs Interactive Brokers

Typically perceived as a hidden cost, brokers also charge for currency conversion. On this front, DEGIRO charges 0.25% of the amount automatically converted (through AutoFX) when an asset denominated in non-base currency is traded, or EUR 10 + 0.25% of the amount converted manually. 

IBKR also applies a tiered approach. For a monthly converted amount below USD 1 million or equivalent, IBKR charges 0.002% of the amount converted, with a minimum of USD 2 per conversion. From USD 1 million onwards, both the variable charge and the minimum decline.

Pricing trading and non-trading fees conclusion

Overall, Interactive Brokers is likely to be the most cost-efficient option for most of the products you might want to trade, except for DEGIRO’s zero-commission selected ETFs (€1 external fee applies), and definitely the best option for currency conversions, which are implicit whenever you trade securities that are denominated in a currency different from your base one.

8. Education, research, and paper trading

Consistently successful investing and trading require a sizable amount of knowledge on financial assets specifics, macroeconomic and market-related topics, but also on how to operate with the trading platform and all the tools it provides. 

DEGIRO and Interactive Brokers both offer a comprehensive and effective-learning education component on different products, trading venues, and tools. Yet, from a macroeconomic and markets perspective, Interactive Brokers goes one step further and supplies its users with several free and paid research and technical materials from some of the world’s most reliable sources. 

For a new trading platform user, the possibility of risk-free testing of its functioning can be a crucial step in deciding whether to open an account. Like many other online brokers, Interactive Brokers provides its prospective clients with demo/paper trading accounts, whereas DEGIRO does not.

Education, research, and paper trading conclusion

While DEGIRO and IBKR have a broker-adjusted, similarly useful education component, IBKR excels in providing markets and macro knowledge services. DEGIRO’s failure to enable its prospective and current clients to use a paper trading account is a serious pitfall. 

9. Investor Security

The security of your assets is of utmost importance when choosing a broker. Besides local investor protection schemes that might be established in your country’s jurisdiction, it is important to understand the broker institution you are working with.

Entity business

Interactive Brokers is a brokerage-only entity, whereas DEGIRO also encompasses a relevant banking component since the merger with Flatex.

Regulation and supervision

Operating worldwide, IBKR is regulated, licensed, and/or supervised by some of the world’s most demanding regulating authorities, including the US Securities and Exchange Commission (SEC) and its counterparts in major developed markets where IBKR is present (UK, EU, Canada, Australia, Japan, Hong Kong, etc.) as well as by the Commodity Futures Trading Commission (CFTC) and the Financial Industry Regulation Authority (FINRA). Being a US company, IBKR is exposed to a very high level of regulation that usually sets the standard among developed economies in the financial industry.

DEGIRO, the Dutch branch of flatexDEGIRO Bank AG, is supervised by the Netherlands Central Bank and the Dutch Financial Markets Authority (AFM). In turn, flatexDEGIRO Bank AG is supervised by the German Federal Financial Supervisory Authority (BaFin).

Equity capital

As far as investor trust goes, besides total segregation of client assets, automated and broadly conservative risk controls, and a robust balance sheet, IBKR Group, a publicly traded company on the NASDAQ exchange, has an equity capital of USD 7,793 billion (as of May 2023), representing an excess regulatory capital north of USD 4.32 billion.

FlatexDEGIRO Bank AG, publicly traded on the Frankfurt Stock Exchange, has an equity capital of almost EUR 620 million (as of May 2023).

Investor security conclusion

In conclusion, despite both seeming solid institutions, it is unarguable that IBKR offers the highest degree of investor security.

10. Customer Service

If any doubt related to your trading or investment activity arises, you will certainly want to have the best possible assistance. Hence, customer service is another important dimension when choosing an online broker.

DEGIRO and IBKR have comprehensive FAQ pages and make phone and email channels available to their clients. It is important to highlight that not every language is supported. In this case, DEGIRO stands out with customer service in all national languages spoken in the 15 countries where it is present. However, with limited business hours, after which contacts will be in English. 

Besides phone and email, IBKR also offers a live chat and a message centre where questions are submitted under specific categories.

Customer service conclusion

Considering all factors, DEGIRO might offer slightly better customer service with fewer tools but better responsiveness in terms of timeframe and quality.

To sum it up, here is our verdict:

All angles considered, IBKR stands out from its peers as an always-innovative, extremely price-competitive, rock-solid, one-stop-shop broker, ticking every box and offering the best combination of financial instruments, tools, and solutions for the whole investment journey. For novices, the learning curve can present a slow beginning. IBKR recently launched Global Trader, a great option for beginners.

DEGIRO, nevertheless, is a large and good discount broker if you are not interested in much more than execution or are looking for low-cost trading as a European citizen.