DeGiro vs Interactive Brokers: the battle over trading costs

DeGiro or Interactive Brokers: the fee war dividing investors

When you look at the cost of a stock trade, the differences are staggering. While Interactive Brokers charges €0.30 per transaction and DeGiro €2, traditional Spanish banks such as Santander charge up to €20, plus custody fees of €150 per position. It is no surprise that many investors have moved their portfolios to foreign brokers.

The tax problem that isn't one

The recurring argument against DeGiro or IBKR is the hassle with the Spanish tax authority: having to record every single trade and apply the day's exchange rate. But tools like Taxdown already import data from both brokers automatically. The tax excuse falls apart: with today's AI, filing the modelo 720 (a Spanish foreign asset reporting form) or your income tax return involves no more work than confirming the data.

The price of traditional banking

Those who choose Santander for tax convenience pay a brutal premium. On top of the €20 per trade, a fee is charged every time a dividend is collected, so if the company pays out four times a year, it applies four times a year. With positions under €100,000, the dividend yield simply evaporates. Private banking improves things somewhat, but you have to stay alert so they don't raise their terms.

Professionalism versus simplicity

Interactive Brokers is the most complete and cheapest platform, with access to options on American stocks, something DeGiro does not offer. But for the investor who just wants to buy and hold, DeGiro is simpler. Trading intensity drives the decision: a day trader needs IBKR; a long-term saver is fine with DeGiro.

The bottom line is that Spanish banking has been priced out of the game, and the tax excuses no longer hold up. For anyone prioritising lower trading costs, the path is clear.