Are there inexpensive online brokers

Depot comparison

Important for choosing a depot

  • Include any costs incurred
    When trading securities, always take into account the costs that must be deducted from the return. This will avoid disappointment.
  • Set goals first
    First develop a strategy and set goals for yourself before opening a custody account. Depending on the objective, other depots may come into question.
  • Transparency is the key
    When choosing the provider, pay attention to a transparent cost statement and a sample deposit.

More and more people are investing in stocks, funds and other securities because they expect these investments to make a profit. However, in order to be able to buy such property rights at all, a deposit is required.

How to find the right depot

A custody account, also known as a custody account, is a bank account through which securities can be traded. You can use this account to buy and sell funds, bonds or stocks. You have the option of running the custody account either through your house bank or an online broker. The way in which you run your portfolio depends on the services that you value:

House bankHere you have a local branch where you can personally handle all business with your contact person. In addition, the house bank usually has a larger range of services.
Online brokerWith the online broker, you keep an online portfolio. All business is done by phone or over the Internet. Often online brokers have specialized in one area, but can score points here with a special knowledge.

What are securities?

A security is a property right that can be evidenced in the form of a certificate or as a value right. The collective term includes several types that can be differentiated on the basis of various characteristics. If the definition is based on the yield, the following forms are used:

  • Income-free papers (e.g. checks, bills of exchange)
  • Interest-bearing paper (e.g. bonds, federal treasury notes)
  • Equity securities (e.g. shares, participation certificates)

The differentiation according to securitized law is also common:

  • Obligatory securities (e.g. bearer bonds, convertible bonds)
  • Membership securities (e.g. shares, interim notes)
  • Property law securities (e.g. mortgage letter, pension certificate)

In principle, securities are intended for buying and selling, for administration and custody. The exact form in which trading takes place depends on the type of security. For example, stocks are mostly traded on the stock exchange - on the floor or virtually. If you as a private person would like to open and fund a share portfolio, you can do this via a bank or an online broker.

How does the depot work?

In order to be able to use a deposit, you open the account with the bank or online broker - with the help of the deposit agreement, the entire process is handled and recorded in writing. All stocks and postings are finally recorded on this deposit account; You can also see the development of the individual securities here. You also need a current account: For example, you will be credited with the proceeds that you receive for the sale of a share.

In order to trade the securities, you can instruct the bank or the broker by email or telephone. However, you usually also have the option to act yourself. To do this, you need to enter the relevant security number and the price for which you want to trade in your online securities account. Also enter the desired trading venue; this depends on how cheaply the security is being traded. If you want to finally complete the trade, you usually have to enter a TAN - similar to online banking.

Note the opening times of the stock exchanges

When making transactions, always take into account the opening times of the individual exchanges. Most of them can be traded until 8 p.m. however, some stop trading securities earlier.

How the trade turns out depends entirely on what you want to trade. In addition to stocks and funds, you can also trade bonds, mortgage bonds, annuities and profit participation certificates.

Depot costs and fees

With your custody account, always keep in mind that you have to pay fees and other costs that you have to deduct from your return:

  • Custody account fees
    These are often lower with direct banks or online brokers.
  • Custody fees
    These costs are charged in order to keep the securities in custody.
  • Order fee
    For every order, both buying and selling, this fee must be paid to the depository provider.
  • Exchange fee
    Several costs are summarized under this term. This pays the brokerage fee of the stock market specialists as well as the fees to be able to use the respective trading venue.
  • Limit orders
    You have the option of specifying a maximum rate that you would like to pay for the purchase of a security. However, this can incur costs.

However, the costs vary from provider to provider and also depend on the trading venues that you use. When comparing a portfolio, pay particular attention to the portfolio management fees and the order and transaction fees.

Find the right depot

In order to be able to open an account at all, you should first familiarize yourself with the different types of securities accounts. You can choose between the following types of deposit:

  • Securities account
    The securities account is the general name for a custody account. This is offered by banks as well as brokers. You can keep all types of securities in this account.
  • Share portfolio
    In principle, the share portfolio is just another name for the securities portfolio. In addition to stocks, funds, pensions, bonds and other securities can also be stored here.
  • Online depot
    Direct banks and online brokers offer the online account. As a rule, this can only be accessed via the Internet. All transactions that are processed through this account are also carried out online.
  • Fund custody account
    A pure fund deposit is only available from a fund company. The funds of the relevant company can be kept and traded here.

It is also important that you familiarize yourself with the Depotgesetz or DepotG before opening the account. This forms the legal basis for securities accounts. The aim of the DepotG is to protect the investor of securities: It defines how the papers must be kept, what rights the depositor has and what obligations the bank or broker has to fulfill.

Step by step to your depot

A stock portfolio comparison is always worthwhile in order to find the right account for you at low cost. You can also carry out the online depot comparison if you would like to equip your depot with the help of consultants. Personal advice can help you feel more secure. But keep in mind that advisors from financial institutions do not always work independently and neutrally. In addition, the costs of an online depot are often cheaper.

However, before you want to open a stock portfolio, you should think about your strategy. You can use this to keep the costs for the depot as low as possible:

  1. You often want to buy and sell securities
    When comparing the providers, you should make sure that the transaction fees are comparatively low - because you have to plan these for every transaction. Check with the providers in advance whether they calculate the order fees as a percentage or offer you a fixed price. A flat rate for orders may also be worthwhile here: the more often you carry out a transaction, the more you make use of this flat rate.
  2. You only want to hold securities and rarely trade them
    If you rarely buy and sell your securities, the level of the transaction fees is not that important. Much more important here is how high the costs for the custody account are. When making a comparison, therefore, pay attention to providers who do not charge custody fees. If these are not available, you can choose the provider with the lowest fees.

Also keep in mind: the more transactions you want to carry out, the more expensive the depot will be. With direct banks, you can also keep your costs low by doing most of your transactions over the Internet.

Stock market experience can pay off

If you already have some experience, ideally no personal advice is required. A deposit with a branch bank is therefore not absolutely necessary. Experienced investors therefore get away with direct banks and discount brokers much cheaper.

You should also make sure that you do all business online with direct banks and brokers - additional fees are often charged for telephone orders. You can also set a limit: This means that you only pay as much as you really want. Some banks offer the setting of limits free of charge, while others charge additional fees for this. Take this into account in your comparison.

By the way: watch out for special promotions from online brokers! A number of brokers and direct branches offer, for example, that the basic deposit fee does not have to be paid until the second year. In addition, with some providers you receive a certain number of free trades or free buys. This enables you to get off to a good start with stock market trading, especially in the first year.

The magical investment triangle

The magical investment triangle also helps you set the right goals and use them to develop a strategy.

The triangle is made up of three areas: liquidity, returns and security. However, it is only possible to be able to connect a maximum of two of these three areas with one another. So, before creating the account, you need to consider which aspects are most important to you. An example: If you want to invest your money securely and have a high level of liquidity, the pension will be comparatively low.

To achieve your goals, you should also pay attention to diversification. Therefore, do not use just one investment option, but distribute your assets over several types of investment. For example, if you have bought stocks, you should allocate some of your money to fixed-term deposit accounts, checking accounts, or other types of securities. If you now lose money through bad stocks, you will still have a large part of your assets safely invested.

Indicators of a good deposit

Pay attention to the following aspects in order to find a good depot:

  • Is the bank or broker located in the EU?
    Of course, it is best to use a broker in Germany, as this must act according to the regulations and laws of the country. But other brokers that are based in an EU country can also be chosen. This is because they are subject to European investor protection.
  • Is it possible to trade on German and foreign stock exchanges?
    Not all banks and brokers offer trading on foreign stock exchanges. However, if you value this, you should find out in advance whether this trade can also be carried out.
  • Are all costs disclosed?
    It is not only important that you receive a transparent cost breakdown in advance. The operation of the depot account itself should also be so user-friendly that you can quickly and easily view your invoice and your purchases and sales.
  • Does the account contain a sample deposit?
    With the help of a sample portfolio, you can try out your strategies once. This will help you get a feel for the dealings on the stock market and how such trading is conducted.
  • Do you receive up-to-date information on stock market events?
    A good depot offers the opportunity to call up developments on the stock exchanges as well as important news on financial topics. With this feature, you can always get all-round information and are optimally prepared for changes.
  • Can you control the depot via an app?
    An app is particularly necessary for investors who are frequently on the go. This is the only way to regularly check the development of your securities.
  • How is the support structured?
    Do you have multiple ways to contact customer service? As a rule, at least one email address and a customer hotline should be available. In addition, support should contact you within a few hours, especially for e-mail inquiries.

Find strategy

While the bank savings plan, for example, has low yields by comparison, but is relatively safe, trading in securities involves greater risks: Regardless of whether you have opted for stocks, bonds, funds or another type of investment, your securities are subject to market fluctuations. Even professionals cannot always predict how it will develop, so you should be careful not to put too much of your wealth on one card.

You should use these factors to determine which strategy makes the most sense for your portfolio in comparison:

  • Desired return
  • Security awareness or willingness to take risks
  • Term of the investment
  • If necessary, sustainability of the investment

Regardless of which strategy you ultimately pursue, you should always bear in mind that custody fees and other administrative costs reduce the return. With cheap products such as ETFs (Exchange Traded Funds), your net profit is correspondingly higher. If you open a share portfolio, you should still pay attention to the provider's cost structure and avoid unnecessarily many transactions. If you already have a securities account, it may be worthwhile to compare and change securities accounts.

Open the depot

Use our FinanceScout24 calculator to compare securities account providers. If you have found a suitable bank here, you can click on “To the provider” to go to the website of the respective bank. Existing customers at banks with online banking can usually open the depot using their PIN and TAN. New customers only have the option of filling out the application online and sending it by post.

Usually, you can already fill out an application form on the website of the relevant bank:

  • Enter your personal data, your address and your contact details
  • State your occupation and your marital status
  • Explain your previous experience with depots

This so-called risk profile allows financial institutions to only allow you to trade certain securities. By the way, don't forget to include a clearing account - this can be your existing current account or a completely new one.

Once you have completed the application, you will print it out and sign it. You then have to confirm your identity using the Postident procedure: Take your identity card and the completed application to the post office. One of the postal workers will check your identity. Finally, the employee will take care of sending your application and a copy of your ID to the bank. Once the bank has confirmed your application, you will receive a letter with the data for the custody account within a few days. Typically, you can start trading in the hours following your registration.

The depot comparison is a useful measure for anyone looking for a depot with the best conditions. The FinanceScout24 calculator is a great help for this weighing up.

termination

The best way to terminate your securities account is to write a detailed letter of termination - you will find numerous templates on the Internet that will help you to create one.

Cancellation is usually possible at any time. However, some brokers and banks have set periods of notice, which are set out in the terms of the contract. Since a standard notice period is not specified, it can vary from provider to provider.

All accounts will be deleted upon termination

If clearing accounts have also been created for the custody account, these are usually also deleted.

If the deposit is closed, the balance on it is transferred to another bank account. Of course, you can also change your securities account; however, the new depot must already exist for this. Some banks offer a free move for this.

questions and answers

How much cash should I keep in my portfolio?

Opinions are divided when it comes to the amount of cash in the depot: Many experts recommend investing 100 percent. Others recommend a cash portion of 10 to 15 percent. In any case, it makes sense to keep a small amount of cash in the depot so that you can react to surprising events. Keep in mind, however, that this portion usually brings little or no interest.So in the end it is only a reserve and liquidity for you.

How safe are depots?

In the case of deposits, the account holder always remains the owner. As a result, he has a right to surrender: He can demand that the securities be surrendered to him. However, if the bank does not act properly and can no longer issue the securities, the account holder is entitled to compensation. This is 90 percent of the total, but a maximum of 20,000 euros.

Can I pledge my deposit?

Yes, your custody account can be pledged - however, a number of banks only allow the entire portfolio to be pledged and not a partial pledge. However, pledging is excluded in the case of custody accounts that only contain asset-forming benefits and for custody accounts that belong to a minor.

Are deposits subject to deposit insurance?

Usually, a deposit does not fall under the deposit protection scheme, because this only relates to deposits made directly with the bank. However, the shares are still protected from the bankruptcy of the respective bank, as the shares are only kept at the bank. If the financial institution files for bankruptcy, it must surrender the securities to the customers.

Are depots also suitable for investments for children?

Since savings books and time deposit accounts are not very profitable due to the current low interest rate policy, deposits are a high-yield alternative. Numerous banks offer these child deposits either free of charge or extremely inexpensively. In addition, the transaction costs are usually less than 10 euros. Grandparents and parents can make regular deposits here and possibly make a big profit. However, it makes sense to invest in solid stocks or funds. With these, the return is a little weaker, but the assets are largely protected.