Which brokerage account to open in Germany?

Why do you need a brokerage account?

In the last article, I told which fund should a beginner invest in if your goal is long-term multiplication of the state. In order to invest in this fund, you will need a brokerage account. A broker is a financial institution that will allow you to trade securities.

How are brokers different?

Brokers can be divided into three groups - classic banks, direct banks (banks without branches) and neo-brokers (trading applications). Classic banks and direct banks charge a minimum of 5-10 € per transaction, which is too expensive and greatly affects your profitability. Neo-brokers have significantly reduced the cost of trading. But neo-brokers also have their drawbacks - for example, they trade through exchanges, where there is not much variety of stocks. Since I recommend investing in funds, the portfolio of neo-brokers will be enough for you.

Which neo-broker to choose?

I recommend looking at the most famous neo-brokers: Trade Republic or Scalable Capital. Trade Republic costs only 1 € per transaction. Scalable Capital charges 0.99 € per trade. Scalable Capital also has an option with free transactions for a subscription of 2.99 € per month.

How to open a brokerage account by a neo-broker?

It's quite simple. Just download the application you like and follow the instructions. When opening, you need to go through identification. The easiest way is through video communication. In general, the process of opening an account will take about 10 minutes. After opening, you will be able to transfer money to your brokerage account via a regular bank transfer. That's all! Now you can make your first investment!

How to buy MSCI World fund?

In my last article, I recommended that you start investing with the MSCI World Index. It can be bought through several funds. For example, through the iShares Core MSCI World Foundation (ISIN: IE00B4L5Y983). Just type the fund's ISIN number or its name in the search bar of your neo-broker. Now you can invest in thousands of companies from a dozen countries through the app!


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