eToro and Trading 212 are both FinTech companies and trading platforms that have set trends with both of their approaches.
At a Glance
Trading 212 is primarily a mobile trading platform that is incredibly popular in Germany and the UK. It has zero commission trading. As a result, it was one of the forerunners in the zero commission trading world. The application has been downloaded more than 13 million times.
eToro promotes a zero commission platform, but you need to understand the details. Trading 212 is upfront about its fees and clearly lists them. eToro has a spread, and it is not always easy to determine.
How the Best Choice Was Determined
When we determined which of the two platforms was the best option, we looked at all of the features offered by both platforms and compared them critically. We made sure that the information we used for comparison was valid and factual before we compared the two platforms. In addition, we sought to understand user feedback, pricing, and the service features of both platforms. While feedback is critical, it is valuable to understand the input to ensure that there are no false claims being made. Therefore, it was essential for us to dig into the features to understand what each platform provides to traders fully.
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eToro is the clear winner when it comes to a comparison between eToro and Trading 212, which we have outlined for you in this article.
eToro Overview
eToro is based in the United Kingdom. It was founded in 2007. eToro is well known for being one of the leading forces behind combining investing with social trading. On the eToro platform, social traders can network and interact with other traders to learn their successful strategies. eToro is focused on the trader that is new to these platforms. eToro has one of the easiest to use and most intuitive interfaces. In addition, it provides a large number of financial tools and trading features to assist all traders. eToro is a brokerage platform that extends options to traders beyond just cryptocurrency to allow traders access to the stock exchange, commodities trading, Forex, along with many other options.
eToro offers its application to more than 100 countries with more than 17 million users. eToro is licensed to operate in countries like Europe, the UK, and the US. eToro maintains a custodial approach to assets on the platform.
Pros:
- Provides support for the leading cryptocurrency options
- Incorporates a mobile app
- Regulated for security
- The interface is easy to use
Cons:
- There is no option for self custody
- Fees for crypto trades can be high
- Limited opportunities for US traders
Next: The best eToro alternatives that exist today
Trading 212 Overview
Trading 212 is a trading platform based in London with the intention of making trading more accessible to the average beginner. The purpose of this platform is to help a new trader gain an understanding of investing while gaining experience. They trade a large number of commodities and currencies, gold, cryptos, stocks, and other asset classes.
Trading 212 is regulated by FCA and has had its license in the UK since 2013. Trading 212 has a large educational resource library focused on investing topics. It has an easy to use user interface.
Pros:
- Provides daily analytics with risk warnings
- Innovative trading options
- Low-cost trading environment
Cons:
- Not available to U.S. traders
User Interface
Trading 212 was designed to be friendly to beginners. While eToro also has some features that are nice for beginners, the Trading 212 interface is much easier to navigate for someone completely new to trading. Trading 212 is high intuitive, and all stocks are listed as modules with detailed historical information. This information includes the market movements with a timeline. In addition, the user is able to apply indicators to gain more information. eToro’s interface cannot match Trading 212.
eToro has a great interface; it just functions slightly differently than Trading 212. eToro has a fast process for creating an account. It takes no time at all to gain access to the platform once creating one. The power behind eToro is its social media like dashboard. It provides traders the ability to see what other traders are saying about investment options. They include a sentiment calculator.
Trading 212 wins because it has an informative, intuitive, and easy to use interface.
Fees
The fees a platform charges are critical because this impacts your bottom line. These fees are taken directly from the money that goes into your pocket, and most of us want them as low as possible.
Trading 212 has commission free trades on ETFs and stocks. They do not have trading fees, deposit fees, or withdrawal fees. They have currency conversion charges for CFD accounts. Trading 212 has additional margin fees for indices and commodities. There are no trading fees for ISAs. They do have fees when there is no activity.
eToro also states they have zero commission trades, but it is essential to look at the details. eToro uses a spread that changes, usually increases, with the conditions of the market. This changing spread can increase the profit margin for eToro between the buying price and the selling price. The profit spread ranges from 0.75 percent and can go as high as 2.9 percent. This range is a large variance in price and how much comes off your bottom line. Therefore, it is essential to your bottom line that you understand the fee structure of eToro, so you know what to expect. This is especially true when it comes to figuring out the percentage difference between the buying price and the selling price. eToro requires a minimum of $50 for trading crypto. They also enforce a minimum deposit amount of $200.
Trading 212 wins because they have fewer fees between the two platforms.
Security
When you are using a trading platform at this trading level, you expect and should receive a high amount of security. It helps you feel confident that your information is safe from hackers but also will not be used by the platform in illegal ways. In addition, you want to trust the platform you are utilizing, mainly because they expect you to give them quite a bit of information about yourself.
eToro’s regulatory framework is provided by the Cyprus Securities and Exchange Commission (CySEC) under MiFID II and the EU’s 5th Anti-Money Laundering Directive. Additional regulations are provided by the UK Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC). The Investor Compensation Fund (CIF) in Cyprus protects client funds up to as much as €20,000 for European traders. UK traders are protected by the Financial Services Compensation Scheme (FSCS) up to £85,000.
Trading 212 has regulations in several jurisdictions. Having several jurisdictions allows traders to manage their portfolios in a secure environment. Trading 212 in UK operates under the UK Financial Conduct Authority (FCA) framework. The Bulgarian Financial Supervision Commission authorizes the Trading 212. The Bulgarian Investors Compensation Fund protects 90% of deposits with a maximum of €20,000.
Cryotocurrency and Investments
Both platforms seem to be evenly matched based on the kinds of assets you can trade, but Trade 212 has more potential investment options.
Trading 212 offers a wide range of unconventional assets like commodities and currency even though they are a platform that is oriented towards beginners. These are items you will not typically find on a beginner platform. It has more than 4,000 ETFs and stocks listed on some of the world’s largest and most lucrative exchanges.
eToro has a more limited offering with stocks from about 250 global companies and funds from about ten available indices. eToro is designed for something very specific; crypto investing and copy trading. eToro has expanded into shares, ETFs, commodities, Forex, and contract for difference.
Withdrawal Methods
Knowing how the platforms accept deposits and provide withdrawals can save you a lot of time and headaches. Understandably, you want the easiest and fastest possible way to get access to your money.
eToro accepts fiat deposits, bank transfers, credit cards, debits cards, PayPal, Skrill, and Neteller. eToro uses a crypto wallet, allowing you to transfer some crypto out of the platform. However, you cannot transfer them out of the wallet into your account. It takes 24 hours before the funds appear in your wallet and even longer for funds to move from your wallet to wherever you would like them. eToro has fees for withdrawal and deposits of non-US dollar transactions. There is a standard fee for withdrawals and a minimum amount for transactions.
Trading 212 sends funds to the same payment method that was used to fund your account. If you use multiple payment methods, you may not be able to select all of them as a withdrawal method. These payment methods include all main deposit methods, like bank transfer, debit card or credit card, PayPal, Apple Pay, and Google Pay. Some payment methods are only available with specific Trading 212 service options.
eToro vs Trading 212: The Winner
Best Overall
Trading 212 has more appeal and is most likely a better fit for those who are interested in investing, especially for the first time. Trading 212 has simplified layouts, great resources, a small minimum deposit, and a diverse class of assets and portfolio allocations. In addition, experienced traders appreciate Trading 212’s commission-free fee structure more than the other benefits offered by eToro.
Best For Social Traders
eToro is a perfect brokerage that has numbers to show they are a leader in the market of social traders. eToro offers social networking among traders. eToro’s social platform is a great place to get tips and tricks on trades from those who know. As a result, you are able to learn and grow as a crypto trader. eToro creates a more social atmosphere and environment that may be more welcoming to those new to crypto.
Best For the New Trader
While Trading 212 is a great overall platform, eToro has a slight advantage for new users and traders. Inexperienced traders are likely to have more success by following the professional traders on eToro. However, their gains might be offset by higher fees. Likewise, it is crucial to note that only eToro offers to trade to U.S. traders, which makes eToro the obvious and clear choice for U.S. residents.
Now that you know about eToro vs Trading 212, it is time for you to get started by creating an account. Trading 212 is a fully online platform that offers user friendly account setup. You can use your device to begin and walk through the registration process. You are required to provide proof of identity and residency to be able to open an account with Trading 212. You will have to provide documents such as a passport, driver’s license, or national ID to prove your identity. In addition, you can provide a utility bill, mortgage statement, credit card statement, or bank statement to prove your address.
Once you have completed these steps in the process, you will have to transfer the minimum amount for a deposit into your brokerage account. Once you do this, you can begin trading. There is no minimum deposit amount. Trading 212 is a great platform for you if you only want to invest and trade small amounts of money. It is simple to get started so there is no reason to delay. Go online and create your account today.
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