What are the differences between eToro and Trading 212? It is due to the poor returns from cash savings as well as the high volatility of the market that has made people turn to investing and trading other alternative financial asset classes, whether it is in stocks or cryptocurrencies.
However, in order to succeed in that, you will need to use a proper and dependable trading platform.
Two such reliable platforms are eToro and Trading 212 but both these come with significant differences in their features and functionalities.
If you are not aware of them, it will be a pretty hard task, if not impossible, to make the right choice between the two.
This article will let you know about those differences as well as provide you with some further insights to determine which among eToro and Trading 212 is designed just for you and your trading needs.
Such knowledge will not only raise your confidence in and while trading but will also enhance your chances of making a profit.
In simple terms, eToro is a popular trading platform among the users who want to buy and sell different financial assets such as stocks, ETFs, commodities, cryptocurrencies, and other currencies.
This Open Book trading platform allows them to make low-cost investments as well. On the other hand, the Trading 212 platform allows the users to trade more than three thousand crypto coins, stocks, currencies, and commodities.
However, there is more to look into them for a better comparison. Check out Differences Between eToro and Revolut.
10 Differences Between eToro and Trading 212
Typically, most traders who are new into the field are attracted to both these platforms especially due to the fact that they can trade with a wide range of financial assets without needing to pay anything in commission.
Yet, 76% and 66% of retail traders typically run their portfolios at a loss while trading on Trading 212 and eToro respectively.
Therefore, there are lots of other differences to know which among the two offers the best and most complete package and service to facilitate online trading.
This knowledge will let you know those specific parameters based on which you should choose one between these two trading platforms and make the best decision according to your trading needs. Here they are for you.
1. Basics and Regulation
The Trading 212 platform was launched in 2006 and therefore has a lot of experience in this field making it a reliable option to choose by the users.
The head office of this company is located in London and is regulated by The FCA or The Financial Conduct Authority and FSC or The Financial Supervision Commission.
This platform aims to democratize the financial markets allowing their users to make trades with no commission by using their clean, crisp, smart, easy to use, and beginner-friendly app.
The users can choose from a wide range of asset classes on Trading 212 such as stocks, forex, cryptocurrency, CFD, gold, ETFs, bonds, ISA, and lots more.
On the other hand, eToro was established a year later than Trading 212 with its head office located in Cyprus.
It is also regulated by the Financial Conduct Authority as well as the Cyprus Securities and Exchange Commission or CySEC, Australian Securities and Investments Commission or ASIC, as well as Markets in Financial Instruments Directive or MiFID.
Though this platform started its journey as a foreign currency exchange, it later on also started offering a diverse range of services to its users including stocks, forex, commodities, indices, cryptocurrencies and other assets.
You can compare the features of these two trading platforms in order to find out the most suitable one for you as well. As for eToro, the user interface is quite decent but is certainly not beginner-friendly.
It will take some time for a beginner to get used to it. One of the most unique features of this platform is the social trading function which allows the users to use this platform to find out the portfolios of high performing and highly rated traders on this platform and copy their trades through the Copy Trader feature.
A few other features offered by this crypto trading specialist include a virtual trading function, commission free investing, more than a hundred crypto coins to choose from, a popular investor program to earn 2% in a year by sharing knowledge, industry specific security protocols to protect funds, real-time insights and news on the crypto market, lots of different payment options, and more.
As for Trading 212, it offers an intuitive and user-friendly app and also offers a virtual trading function like eToro, commission free investing, negative balance protection, a no-fee ISA to invest in, a lot of educational resources, stocks listings along with market movements and historical information, 24/7 customer support, adequate security measures to protect funds, and a wide range of financial assets to trade with.
When you compare the fees of eToro and Trading 212, there is much more than you should look into apart from the fact that both these platforms allow zero-commission trading.
There is no deposit fee charged by eToro. But, when you make any withdrawal the platform will charge a fee of $5 for each. For currency conversion, the fee charged by eToro is 50 pips or Percentage in Point which depends on the measure of change in price between two currencies.
There is also an inactivity fee charged by eToro which is $10 for every month after 12 months if the account is not logged in by the user within that period.
There is also a spread fee charged by eToro on stocks CFDs and cryptocurrency trades which is 0.09% on stocks CFDs and 0.75% for crypto trades. Apart from that, the platform also charges an overnight fee on those CFD positions that are open overnight.
On the other hand, Trading 212 also does not charge any deposit fees but that is limited to those made via bank transfers and by a credit card or a debit card and up to £2,000.
Anything over and above that will fetch a fee of 0.7%. However, this platform does not charge any fees for making withdrawals. As for currency conversion, this platform charges anywhere between 0.15% and 0.5%. There is no inactivity fee on this platform, however.
4. Minimum Deposit and Withdrawal
You can start trading on the eToro platform after making your first deposit. The minimum requirement is $200 but after that, this limit is reduced to $50. And, in order to be eligible to make a withdrawal, you will first have to make a profit of at least $30 on your trades.
On the other hand, to start trading on Trading 212, you simply can make a minimum deposit of £1 and start trading. When it comes to making withdrawals, the limit on this platform is usually between £1 and £10 depending on the type of service used by you.
5. Payment Methods
You can make your payments on the Trading 212 platform by using Google Pay, Apple Pay, Skrill, PayPal, and Visa.
On the other hand, the eToro platform supports much more diverse payment methods which include Apple Pay, BPAY, Neteller, PayPal, Diners Club, JCB Card, Perfect Money, Swift, Rapid Transfer, Skrill, UnionPay, Venmo, Wire Transfer, Yandex Money, Visa, and Webmoney.
6. Coin Support
When it comes to crypto coin support, the Trading 212 platform supports BTC, BCH, ETH, XRP, LTC, DASH, and MON.
In contrast, the eToro platform supports a few of those as well as others. The list includes ADA, BTC, BCH, BNB, DASH, ETH, ETC, EOS, LTC, MIOTA, NEO, XLM, XRP, VET, ZEC.
You will get to use a large variety of educational materials on both these platforms with or without creating an account.
However, that of Trading 212 is a bit better in comparison to that of eToro because this platform will also allow you to access different trader forums apart from watching videos and reading articles on trading and investing.
You can connect to the community to get tips on trading and investing and even ask questions to clear your doubts.
You will not get such a facility if you use eToro. Apart from that, this platform will also offer far fewer videos, articles, webinars, and trading guides than Trading 212.
This is not surprising because this platform is not designed for the beginners in this field as Trading 212 is. Therefore, if you are not an experienced trader or investor, eToro is not for you.
8. Security and Reliability
Apart from the regulations of these two platforms, there are a few other aspects that raise their security and reliability amongst the users. The eToro platform protects the funds of the customers by ICF or the Investor Compensation Fund in Cyprus.
It provides coverage of up to €20,000 maximum for the eToro Europe users and as for the eToro UK users the funds are protected by the Financial Services Compensation Scheme or FSCS for a maximum of £85,000. The FinCEN registration of this platform to offer Money Services Business raises the trust of the other eToro users.
On the other hand, Trading 212 is certified by the Bulgarian Financial Supervision Commission. The funds are also protected by The Financial Services Compensation Scheme and the Bulgarian Investors Compensation Fund protects a major part of the fund as well with coverage of up to a maximum of €20,000.
However, with four discrete regulatory controls, the trading environment of eToro is far more reliable.
9. Additional Facilities
There are a few additional facilities provided by each of these two platforms to help the users in their trading and investments. The Copy Portfolios feature of eToro decreases the risks involved in trades and at the same time adds more diversification to opportunities for making investments.
Another good feature is the Tip Ranks which is a third-party provider. Users can access different market coverage offered by more than 15,000 analysts to help them in making a more productive trading decision. Then there is the Pro Charts charting package which helps in manual trading as well.
In comparison, the Trading 212 platform offers leveraged trading via the CFD accounts and the Invest account allows the users to make equity trading more traditionally.
The fractional share trading feature is also very helpful to the users allowing them to create and manage a pretty diversified portfolio even without investing extensive capital.
Another good and useful feature included in this platform is Pro Quant. This feature allows the users to create automated trading robots and for that, they do not need any coding.
The daily analytics feature of this platform however is not up to the mark since it talks more about the risks and warns about it than providing proper analysis.
10. Customer Service
Finally, in terms of customer service and support, you can reach the team of eToro via their web-based ticketing service as well as live chat service. Usually, they respond quite quickly but it may be a bit delayed during busy periods.
It is available 24/5 and not on weekends, however. If you want to use the live chat option, you will have to go to the eToro Help Center and navigate through the FAQ section.
As for Trading 212, the customer support is offered 24/7 but through email. They are also prompt to reply and come up with relevant suggestions.
However, if you wish to contact them through phone or live chat, you will be disappointed because this platform does not offer such support to its customers.
Which is Better – eToro or Trading 212?
Now, given all these differences you may still wonder which among eToro and Trading 212 is a better platform to go with for your trading needs.
Well, this is quite natural because both these platforms serve the same purpose of trading but differently.
Therefore, it is best left to your preferences. Typically, it will all depend on what exactly you want the platform to do for you.
For a few users, especially for the beginners and average traders and investors, Trading 212 would be a more suitable platform given all other things are equal.
This is because, in spite of its simple layouts, this platform has a much broader appeal due to lower minimum deposits, better resources and also much diverse portfolio allocations and asset classes.
However, that does not mean eToro is a bad platform in any way. It is just that eToro is a bit more complex in its fee structure, has quite a high risk profile and comes with a comparatively limited investment option.
As it is found that almost 75% of investor accounts tend to lose money while trading CFDs on eToro, this results in quite a high margin of loss in spite of the fact that eToro is a platform that specializes in crypto trading.
Therefore, eToro is not the right platform for those users who do not have a higher risk appetite.
Now, consider the vital statistics of the two platforms and start with the protection offered by them to the funds of the customers.
In this specific aspect both eToro and Trading 212 offer protection by FSCS or The Financial Services Compensation Scheme up to a certain amount.
This means that your deposits will be protected if any of these two platforms go out of order but that does not mean it will protect your investments in the case of it going down in value.
When you trade on Trading 212, you will be allowed to invest in an Individual Savings Account. This unique and free feature is a rarity.
You can use the ISA allowance offered every year, which can be quite high, to make further investments tax free but not for trading CFDs.
However, if you use eToro you will not get any such allowances and therefore you will have to pay taxes on your capital gains every year.
Typically, the customers of eToro, when surveyed, pointed at a few things that they liked about it and a couple that they wanted to be considered and changed. The things that they liked about it include:
- Its low cost or zero-commission trading offer
- Easy to use platform and
- Easy to navigate user interface
However, they did not like the fact that the platform charges a few additional fees which, over time, add up to a significant amount.
On the other hand, the customers of Trading 212 who were pleased with the platform said that:
- The platform is easy to use and
- It offers commission free trading.
However, they pointed out that the best part of the platform is the new pie feature. It is very helpful since it allowed them to balance their portfolio more efficiently and at the same time helped them to invest in more balanced portfolios of other people.
Apart from cryptocurrencies, both these trading platforms allow the users to trade shares, forex, commodities, and indices.
However, eToro will also allow you to trade options and ETFs which you cannot do on Trading 212.
However, when it comes to trading stocks, you can access some of the biggest stock exchanges when you use Trading 212 rather than eToro.
If you consider the cost factor of these two platforms, it is quite difficult to compare because both of them allow commission-free trading.
As for the fees and restrictions, Trading 212 charges only a foreign exchange fee which is typically 0.15% and also imposes a few restrictions on deposit and withdrawal amounts.
However, you may also consider the spreads on these platforms. On Trading 212 it is 0.5% on BTC and ETH and on eToro it is less than 1% on BTC but 2% on ETH.
In comparison, all trades made on eToro are usually free but it charges a withdrawal fee of $5 as well as an account inactivity fee of $10 as said earlier.
The features of these two platforms are however much similar. Both of them have a website and an app that supports iPhone and Android.
You can set up alerts and notifications easily as well as access other sites for the latest news and research.
You can also create watch lists and view them. However, all these along with research and company details of Trading 212 seem to be better than eToro.
As for the learning resources, both these platforms come with a decent set for their respective users.
However, those offered by Trading 212 are much more helpful for the beginner investors who wish to know more about investing.
Nonetheless, both of them offer guides to read, videos to watch, and walkthroughs.
As for the demo account, which is offered by both eToro and Trading 212, it allows the users to practice trading without investing their own money to get the feel of it.
Once your confidence grows, you can start trading for real. On both these platforms, you can trade for real money or make imaginary ones for life if you wish. These demo accounts are also great educational resources for the beginners.
However, the demo account of eToro is accessible only after you sign up with them.
On the other hand, Trading 212 allows you to use theirs even without giving up your email address but then you will not be able to watch your unreal stocks for days, weeks or months unless you sign up.
Now, considering everything overall, it can be concluded that both eToro and Trading 212 are quite good options for making free trades using a wider range of financial instruments.
You can make commission free trades with no trading limits. However, you will need to create a suitable portfolio on your own since these platforms do not offer any pre-made portfolios.
If you are not keen on creating such a portfolio, then neither of these platforms will be suitable for you.
Therefore, in the end, after considering all the features, functionalities, pros, and cons of both the platforms it can be said that for an average investor Trading 212 is perhaps the best available choice as compared to eToro.
However, the ultimate choice should be made after thorough research so that none of your trading purposes is left unfulfilled.
Online investing is in vogue today and it may be quite difficult for you to determine which trading platform is best for you and your trading needs. Both eToro and Trading 212 come with their differences which this article is all about.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.