eToro vs Trading 212: Which one should you consider?
Similarities between eToro and Trading 212
The two providers have a lot of similarities. These include:
Stocks, ETFs, crypto trading and forex – trading currencies to profit from the sell – are available.
Neither charges a platform fee or any trading fees to UK customers when they buy or sell shares.
You can open an Isa on either platform. They differ on how the Isas work, however. At Trading 212 investors can choose their own investments, but at eToro the Isa is run by an external provider – Moneyfarm – which offers managed Isa portfolios.
Both offer a type of social investing.
You can also access a community forum on both platforms, where investors can share news and investment ideas, and browse other posts and conversations.
Both charge a foreign exchange fee on trades in certain currencies.
Both platforms charge a buy-sell spread on assets.
eToro and Trading 212 are regulated in the UK by the Financial Conduct Authority (FCA). They are also backed by the Financial Services Compensation Scheme (FSCS).
Advantages of eToro
Ideal for both beginners and advanced traders.
Customers have access to a wide range of assets – including over 6,000 stocks from 20 exchanges. You can also access investment trusts where other similar trading apps tend not to offer them.
Offers comprehensive resources to educate both novices and seasoned investors, with plenty of analysis and data on hand.
eToro is considered the industry leader in social investing, offering copy trading. This works just as the name suggests – you find a successful investor, also referred to as 'popular investor', and replicate their trades. Every time they buy or sell a stock you will do the same. You don't need to physically monitor and copy each and every move, as this can be done automatically. eToro allows you to copy up to 100 traders simultaneously.
Advantages of Trading 212
Offers an extensive selection of investments with more than 13,000 shares across the major stock exchanges.
Fees are highly competitive, with free trades on stocks and ETFs.
At the time of writing, its cash Isa pays 5.07pc interest in for new customers for the first 12 months, 4.35pc afterwards – with no account fees, but the rate is variable and may change at any time.
Stocks and shares Isa has no account or trading fees – and currently pays 4.6pc on any uninvested cash. It gives investors the option to choose their own investments to hold in their portfolio.
Trading 212 offers a variety of ready-made portfolios – known as 'pies' – with different risk profiles (conservative, moderate, aggressive). They are also available by themes, or you can create your very own homemade pie.
The Pie Library offers a list of the most popular shared pies so that you can explore a variety of new ideas and replicate any you like the look of.
No inactivity fee if you need to take a break.
Forex trading comes with a fee of just 0.15pc per conversion.
Disadvantages of eToro
At eToro you'll pay 1pc for buying and selling Bitcoin.
eToro charges a flat $5 withdrawal fee on standard accounts. The fee is waived if you withdraw through an eToro Money wallet or if you're a Platinum-tier (or higher) club member.
UK customers can hold their funds in GBP, but when trading assets priced in a different currency (such as US stocks) or when depositing and withdrawing in a different currency (via eToro Money), a currency conversion fee of 0.75pc applies.
There is no phone support – customer service is only available on email, online ticketing systems, live chat or Whatsapp. A call can only be booked with an account manager for those with silver tier status – but you must have at least $5,000 in your account for this.
Disadvantages of Trading 212
Trading 212 charges a foreign exchange fee of 0.15pc of the value of the trade when buying or selling non-UK shares.
Less comprehensive research tools.
You can't buy cryptocurrency direct – Trading 212 only offers cryptocurrency trading through Contracts for Difference (CFDs), allowing you to speculate on the price movements of cryptocurrencies such as Bitcoin and Ethereum.
There's no phone support. Customer service is only available on email, online ticketing systems or live chat.
Only whole shares are transferable, so if you have taken advantage of buying fractional shares it's not possible to transfer your assets to another provider. If you close your account, the fractional shares held in your account will need to be sold. You'll then have to start investing elsewhere through another broker and re-buy your previous positions. However, there is a way you could get around this. For example, if an investor holds 60.2 shares of Apple; to fully transfer out, they would either need to sell 0.2 worth of fractional shares or buy 0.8 shares to round the quantity to 63.
Which one is best for you?
This depends on a lot of factors – your investing style, how much money you're investing and what kind of services you really value.
How and what you invest in will impact your decision. For example, if you're a fan of investment trusts you might be more inclined to use eToro. But if you already invest in funds in a separate platform account this might not be enough to sway you.
If you like to invest in overseas stocks, thanks to the low foreign exchange fee, overseas share trading at Trading 212 is very competitive.
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