eToro vs Trading 212: what’s the difference?

What is the difference between eToro and Trading 212?

Trading 212 boasts commission-free trading and aims to 'democratise the financial markets with free, smart and easy to use apps' and make it easier for people to invest in the stock market.

eToro, on the other hand, is a social trading platform where you can copy successful traders. It aims to empower people to grow their knowledge and wealth as part of a global community.

However, their fees can be higher than Trading 212, particularly with spreads and withdrawal costs.

Trading 212 vs eToro: what services do they provide?

Trading 212 and eToro offer distinct services tailored to their traders:

Trading 212 services

Trading 212 focuses on commission-free trading with a user-friendly platform for trading, including:

• Stocks: Anyone can purchase part-ownership in a company via stocks.
• Exchange-traded funds (ETFs): These are an assortment of securities designed to match or outperform an index.
• Forex: Traders can get involved in Forex, which is trading currencies to profit from the transaction.
• Commodities: You can also get involved in the trade of primary or unmanufactured goods such as gold or crude oil.
• Cryptocurrency: You can trade in cryptocurrency by buying and selling cryptocurrency, such as Bitcoin and Ethereum, on an exchange, but this is very high risk and not for inexperienced investors. 

The Trading 212 platform is regulated in the UK by the Financial Conduct Authority (FCA). It is also backed by the Financial Services Compensation Scheme (FSCS).

Trading 212 aims to help its traders know the risks of trading, which is vital, especially with highly volatile and risky investments such as cryptocurrency.

It's crucial to get financial advice beforehand to fully understand investment risks, navigate the complexities of trading, and create a diversified portfolio.

eToro services

eToro is also regulated by the FCA and covered by the FSCS. 

The platform specialises in social trading, allowing you to copy successful traders' strategies.

Similar to Trading 212, eToro offers access to a wide range of investment strategies, including:

• Stocks: This includes stocks from a range of sectors and countries.
• Forex: You could invest in a 'currency pair' or a currency ETF, providing exposure to the performance of a currency.
• Cryptocurrencies: There are over 100 tradeable crypto assets available, such as Bitcoin.
• Commodities: Similar to Trading 212, you can invest in commodities.
• ETFs: eToro offers hundreds of ETFs that focus on various areas.

eToro also allows you to invest in investment trusts, which pool money from many investors to invest in a diversified portfolio and contract for difference (CFD) trading, allowing you to speculate price movements without owning the underlying asset, the latter of which is higher risk.

Trading 212 vs eToro: how do the fees compare?

Trading 212 and eToro have different fee structures.

Here's a quick comparison:

Trading 212 fees

Trading 212 fees are generally low, with commission-free trading on stocks and ETFs, but it charges for forex and commodities spreads.

There are no deposit fees; their minimum investment amount is £1.

eToro fees

eToro fees are higher, and they charge fees for spreads, withdrawals, and inactive accounts.

The minimum investment amount for stocks is £10. Similarly to Trading 212, eToro also does not charge commission on stock and ETFs.

Given the risk associated with cryptocurrency and CFDs, eToro charges a 1% fee for buying and selling.

Trading 212 vs eToro: who has better customer service?

We explore how Trading 212 and eToro compare when it comes to customer service.

eToro customer service

eToro offers various customer service options, including:

• Live chat (only available for club members).
• WhatsApp (only available for club members).
• Ticket system for support requests.
• Email.

As they don't provide phone support, urgent queries usually need to be made via live chat and online ticketing systems.

Trading 212 customer service

Trading 212 provides customer support through live chat, email and their app. However, there is no phone support, which can be an issue for urgent queries.

Can you open accounts with Trading 212 and eToro?

Yes, you can open an account with each of these platforms.

Opening an account on Trading 212 is straightforward as you sign up online and provide personal identification before verifying your address.

The minimum investment amount is £1. Trading 212 provides an annual summary of your transactions, which helps calculate capital gains tax (CGT).

You should ensure you track your profits to avoid overlooking any tax liabilities.

You can also open an account with eToro easily. The process involves online registration, ID verification, and proving your address..

The minimum amount for stocks is £10, while other fees pertain to CFDs; these fees may vary.

Similar to Trading 212, eToro offers transaction summaries to help you manage CGT. Keep detailed records of your trades to ensure you accurately report any gains.

What are the advantages and disadvantages of Trading 212?

The pros and cons of Trading 212 include:

Trading 212 advantages

• You benefit from commission-free trading on stocks and ETFs, helping to keep costs low.
• They have a user-friendly interface, making it easier to manage your investments.
• There is a low minimum investment, so it may be suitable for those new to investing.
• You can access a range of assets, helping you to create a diversified portfolio, although expert financial advice is recommended before investing.
• Trading 212 is regulated and protected by the FCA and FSCS, respectively.

Trading 212 disadvantages

• It offers no phone support, making it difficult to get urgent help quickly, and there are occasional service delays.
• There are limited research tools, so it may not be ideal if this is a priority or if you're interested in a more hands-on approach.
• There are slightly higher fees apply for Forex and commodities trading, which can build up over time.
• There are some geographic restrictions, as some services are not available in all countries. This should be a major consideration if you want to invest in unavailable areas via Trading 212.

What are the advantages and disadvantages of eToro?

Here are the pros and cons of eToro:

eToro advantages

• They offer useful social trading features, which can be useful if you want to see what successful traders are doing - although it's vital to have your own strategy.
• You can access a wide range of assets, helping you to create a diversified portfolio and manage risk.
• It has a user-friendly and innovative platform, ideal for beginners and advanced traders.
• eToro offers comprehensive education resources are available, which is handy if you're proactive about your investment strategy.
• eToro is regulated and protected by FCA and FSCS, respectively.

eToro disadvantages

• There are higher fees for spreads, withdrawals, and inactivity, so you could incur a fee even if you do nothing.
• It has slower customer support than Trading 212, which can be an issue if you have an urgent query.
• There are higher minimum investment amounts than Trading 212, so consider if you can afford to invest beforehand.
• The complex fee structure can be confusing for new users. It's worth getting expert financial advice if you're unsure about any fees.
• There is no phone support, so you must rely on live chat and tickets, which may be slower.

Trading 212 vs eToro: which is better for you?

Trading 212 is ideal if you're looking for commission-free trading and a user-friendly platform. It's suitable for beginners with a low minimum investment amount of £1 and a straightforward interface. 

If you want to trade stocks and ETFs with minimal costs, Trading 212 is the better of the two options.

eToro suits those interested in social trading, where you can copy the strategies of successful investors. It's beneficial if you want access to a wide range of assets, including cryptocurrencies. 

eToro is also suitable for traders who value educational resources and are willing to pay higher fees for advanced features.

Effectively, your choice between eToro and Trading 212 depends on what you value more.

Get expert financial advice

Investing can be complex and involves some risk, which means you could end up losing money. However, there are ways to reduce investment risk, such as a diversified portfolio.

Unbiased can match you with a qualified financial adviser who can provide expert financial advice to ensure you have an investment strategy that works for you.