Broker Accounts in Germany
- Germany’s online trading landscape offers various types of brokers, from trading platforms to direct and traditional banks, each with different fee structures and services tailored to specific needs.
- You can trade a diverse range of financial products including stocks, ETFs, and cryptocurrencies with certain restrictions.
- In Germany, profits from asset or investment sales are taxed with the withholding tax (25%).
- Scalable Capital – Best online broker in Germany. Great for active day traders.
- Trade Republic – Best for beginners.
- Flatex – Best for experienced traders.
- Commerzbank DirektDepot – Broker account at the best branch bank.
Types of online brokers in Germany
Brokers in German financial markets manage a complex network of transactions, orchestrating buy and sell orders for their clients. For instance, flatex, one of the oldest and best trading platforms in Germany, provides an advanced trading platform for clients to engage in online trading of various financial products.
Trading platforms, as specialized brokers, concentrate on managing trading accounts and typically charge less than traditional banks. For example, eToro provides stock and ETF trading in Germany without charging commission, but additional fees such as currency conversion are applicable.
Interactive Brokers, on the other hand, charges a fee of $0.0035 per US stock with a minimum of $0.35 per order. However, the wide range of available financial instruments compensates for the costs involved.
Direct banks deliver a mix of conventional banking services and investment opportunities, mainly operating online. For example, Comdirect, a subsidiary of Commerzbank, provides various investment options including:
- Cash savings plans
- Government-guaranteed bank deposits
- Guaranteed pensions
- Digital access to national and international stock markets for trading.
Traditional banks provide brokerage services in addition to their standard banking products, but often at higher fees. For instance, Commerzbank DirektDepot, an online broker account, facilitates the trading of stocks and ETFs, and also provides the option of ETF savings plans with a minimum monthly investment of 25 euros. However, it’s not recommended for active day traders due to its higher fees.
Financial products you can trade with an online broker in Germany
Germany offers a wide array of financial products for trading, reflecting the diversity of the country’s landscape. You can trade stocks, ETFs, and cryptocurrencies, among other options.
Stocks are shares of ownership in a company and can be traded on various stock exchanges. Commonly traded stocks in the German market include:
The Frankfurt Stock Exchange is the largest stock exchange in Germany.
ETFs, or exchange-traded funds, are collections of securities that mirror an index and can be traded like individual stocks. The most widely traded ETFs in Germany are the Deka DAXplus Maximum Dividend UCITS ETF and the Amundi DivDAX UCITS ETF series.
Crypto trading involves buying and selling cryptocurrencies like Bitcoin and Ethereum. The top cryptocurrencies traded in Germany are Bitcoin, Ethereum, Bitcoin Cash, and Ripple.
Fees of online brokers
Broker fees in Germany are as varied as the brokers themselves. They can include trading fees, account maintenance fees, and other fees such as deposit and withdrawal fees. Fees are typically billed using fixed amounts or percentage-based calculations, and may also have minimum and maximum thresholds.
Trading costs are fees charged for executing trades and can be either fixed or percentage-based. Some providers may impose a flat fee per order, while others may levy a percentage of the order volume.
Account maintenance fee
Account maintenance fee is a charge for the upkeep of a brokerage account and can be:
- Monthly or annual
- Some brokers, like eToro and Trade Republic, offer no fees
- Others like DEGIRO charge between $2.2 to $5.3
- Lightyear charges about $1.0 to $1.1 per month.
Other fees may include deposit and withdrawal fees, inactivity fees, and currency conversion fees. For instance, Bux Zero imposes an inactivity fee of €5 per month on accounts that have remained inactive for 90 days.
Tax implications of trading in Germany
In Germany, capital gains tax, also known as withholding tax (Abgeltungsteuer), is imposed on the profits made from selling an asset or investment. This tax is typically 25% plus a solidarity surcharge of 5.5% of the tax amount, plus church tax if applicable. When using a German online broker, supervised by BaFin, the Federal Financial Supervisory Authority, usually the broker handles the deduction of this tax automatically. If you use an international online broker, regulated outside of Germany, you have to pay the withholding tax yourself.
However, there is also an annual tax-free allowance, known as Freibetrag, of €1000 for single taxpayers and €2,000 for married couples or registered partners.
It’s important to note that tax laws can change and can be complex. Therefore, it’s advisable to consult a tax advisor or accountant to ensure you are meeting your tax obligations correctly. This can help prevent potential penalties and ensure you are taking advantage of any allowances you are eligible for.
Best online brokers in Germany
The top online brokers are Scalable Capital, Trade Republic, flatex, and Commerzbank DirektDepot.
Scalable Capital is a great trading platform and robo-advisor that was founded in Munich in 2014. Known for its low fees, user-friendly interface, and a wide range of investment options, it has quickly become a favorite among traders. Its customer support is available in English. Moreover, Scalable Capital does not have account management, withdrawal, or inactivity fees, making it a cost-effective choice for traders. It also uses advanced technology to offer a fully automated portfolio management service, making investing easy even for those with little experience. Its trustworthiness and reliability are further enhanced by its regulation by the German Federal Financial Supervisory Authority (BaFin).
Trade Republic is one of the best online brokers in Germany, offering plenty of advantages to its users. Known for its low fees and user-friendly interface, it has become a go-to platform for many investors. It has a diverse range of financial products and offers English customer service. The process of account opening is seamless and hassle-free. One of its standout features is commission-free trading, making it a cost-effective choice for investors. Moreover, it offers free savings plans for ETFs and stocks, an extensive trading portfolio, and even the availability of 50 cryptocurrencies for trading. Plus, there is no mandatory initial minimum deposit or account management, withdrawal, or inactivity fees, making it an even more attractive option for both beginners and seasoned investors.
flatex, one of Germany’s top online brokers, offers a seamless account opening and has been exempt from securities account fees since 2023. Its trading portfolio is notably diverse, encompassing over a million funds, stocks, ETFs, certificates, and more. However, some users may find its pricing for orders non-transparent, and costs can vary depending on the chosen exchange platform. It’s also worth noting that flatex does not currently support investments in cryptocurrencies and is only available in German.
Commerzbank DirektDepot is a great online broker, offering a wide array of tradable securities and a streamlined online account opening. However, it might not be the most cost-effective choice for active day traders due to its relatively higher trading prices.
Key features of Commerzbank DirektDepot include:
- Easy and fast online account opening
- A vast selection of tradable securities to diversify your portfolio
- Complimentary securities account for those who make at least one order per quarter
- Over 700 products available for saving plans, providing various investment options
- ETF savings plans available for a monthly fee of 2.50 euros plus a 0.25% order fee
How to open a trading account in Germany
To start trading in Germany, you need to:
- Compare brokers
- Fill out an application
- Verify your identity
- Deposit funds into your account
This process typically takes up to three working days.
Account opening process
The account opening requires providing personal information and meeting certain requirements. To start the process of opening a broker account in Germany, it is essential to provide:
- Identity details, including an ID card or passport
- Proof of address
- Social Security Number or proof of ID number
- Occasionally, information regarding your employer and existing bank or broker account numbers.
Funding your broker account
Funding your broker account can be done through various methods such as bank account transfers, credit cards or debit cards, and e-wallets. To deposit money, the majority of online brokers in Germany provide fee-free trading. Nevertheless, it is important to note that some banks may impose a monthly fee for the maintenance of a bank account linked to a trading account.
How to switch brokers
Switching brokers in Germany is generally straightforward, requiring the completion of a transfer form and coordination of asset transfers between brokers. The duration for switching brokers in Germany can vary significantly, with some experiences taking less than 1 hour and others taking less than two weeks.
Selecting the best online broker in Germany doesn’t follow a one-size-fits-all approach, but rather involves understanding your individual needs. It requires understanding your own investment goals, risk tolerance, and financial needs. By comparing different brokers, understanding their offerings, and evaluating their fee structures, you can make a choice that aligns with your financial goals and helps you navigate the financial market jungle with ease.
Frequently Asked Questions
When choosing a trading broker in Germany, consider factors such as low trading fees, customer service quality, platform usability, and regulation by German financial authority BaFin.
The process to open a trading account in Germany typically takes up to three working days. This includes the time it takes to verify your identity and deposit funds into your account.
Not all online brokers in Germany offer cryptocurrency trading. It’s important to check the broker’s range of financial instruments before opening an account if you’re interested in trading cryptocurrencies.
In Germany, the capital gains tax, also known as withholding tax, is typically 25% plus a solidarity surcharge of 5.5% of the tax amount, plus church tax if applicable.
Yes, many online brokers in Germany offer educational resources to help both beginners and experienced traders enhance their trading skills and knowledge. These resources can include webinars, articles, e-books, and even one-on-one coaching sessions.