In the past, DEGIRO users could choose between the Basic and Custody account types. To date, DEGIRO does not allow new clients to open a Custody account type, however old customers could still keep their own.
Here we will compare the DEGIRO Basic VS Custody profile types in detail.
What are the differences between DEGIRO Basic VS DEGIRO Custody?
The main differences between the DEGIRO Basic account and the DEGIRO Custody account are related to the shares lending policy and fee structure. A Basic account allows DEGIRO to lend shares to third parties, while a Custody account does not. However, fees are lower in the Basic account, whereas the Custody account includes additional charges, especially for dividend and coupon processing.
A Basic account permits DEGIRO to lend shares to third parties. This lending mechanism reduces costs, making the Basic account a more affordable option. Although shares are lent out, DEGIRO implements security measures to protect investors. A Custody account ensures that no shares are lent. This appeals to investors prioritizing additional security and full control over their holdings. However, avoiding share lending leads to higher costs in certain areas.
Fee structures vary between DEGIRO accounts. The Basic account has lower overall costs, making it more attractive for cost-conscious investors. In contrast, the Custody account incurs extra fees, particularly for processing dividends and coupons, which may reduce profitability for those relying on passive income.
Dividend and coupon processing are handled differently depending on the DEGIRO account type. Basic accounts handle these transactions without extra charges. Custody accounts, however, apply fees for processing dividends and coupons, which may significantly affect investors focusing on income-generating assets.
The table comparing the DEGIRO Custody and the DEGIRO Basic accounts is shown below.
| DEGIRO Basic vs DEGIRO Custody | Basic | Custody |
|---|---|---|
| Low Fees | Yes | Yes |
| Shares, Bonds, Investment Funds, and Trackers (ETFs) | Yes | Yes |
| Leveraged Products | Yes | No |
| Free dividend | Yes | No |
| DEGIRO may lend your security | Yes | No |
How does the DEGIRO Basic account work?
With a DEGIRO Basic profile, you will have access to a great range of tradable assets as offered by the broker. This includes shares, bonds, investment funds, and trackers (ETFs) as leveraged products.
Among the key features of a Basic Profile is even lower trading fees. You may also be eligible for tax-free dividends depending on your situation. With that said, a basic profile may not grant you full access to all assets and features. This will require an upgrade to an ActiveTrader, or Day Trader profile which you can do at no extra cost.
These profiles will open up more features like the ability to trade various derivatives, and going short on particular assets. There will also be a difference in the percentage of margin that is available to you. Further details can be noted from the chart below.
| Basic | Active | Trader | Day Trader | |
|---|---|---|---|---|
| Margin trading available | No | Up to 50% of your available margin | Up to 100% of your available margin | Up to 100% of your available margin with additional margin during trading hours |
| Going short allowed | No | Yes | Yes | Yes |
| Trade derivatives | No | Yes | Yes | Yes |
(Investing involves risk of loss)
How does the DEGIRO Custody account work?
With a custody profile, you will have access to the same markets but this profile type only allows for you to trade the actual real asset and not derivatives. You will still also benefit from really low fees that can rival any broker in the industry. Furthermore, you will still receive any dividends your holdings pay, though they will not be processed free of charge on a custody account.
Another difference is that your securities with this account type are held separately from the lending pool of DEGIRO clients’ securities and are thus unable to be loaned to third parties.
You will still also benefit from really low fees that can rival any broker in the industry. These generally start from $1, but they are totally absent when investing in certain ETFs and stock exchanges.
When fees are charged, they are composed of two parts. The first is a base rate fee which will vary depending on the exchange you are trading on, and the second part is a variable percentage rate depending on the volume of your trade.
There will also be the DEGIRO exchange connection fee. This is paid at €2.50 per annum for each exchange you trade on with the exception of the London Stock Exchange. The fee covers your usage of exchanges around the world and any technical support you receive.
When the company you’re investing in distributes dividends, you will be notified by DEGIRO and you will also be able to keep track of all the dividends you’ve received in the past. If you’re investing in US stocks, you can benefit from reduced tax rates by filling the W-8BEN form during the account opening. This form is required by DEGIRO to confirm whether or not the trader is a US citizen.
Can I change my DEGIRO Basic account to a Custody account?
It is not possible to change a DEGIRO Basic account to a Custody account because DEGIRO discontinued the Custody account in 2021.
Existing DEGIRO clients who opened a Custody account before 2021 are still allowed to keep and use it under the original conditions. These clients retain the benefits of a Custody account, including the assurance that their shares are not lent out.
New DEGIRO clients, however, can only open Basic accounts. Since the Custody account is no longer available, those looking for an account without share lending must consider alternative brokers.