eToro Review 2020 – Fees, Features, Pros and Cons Revealed

Are you based in the United Kingdom and looking to buy stocks and shares from the comfort of your home? If so, you might have come across FCA broker eToro. This multi-asset platform in question is popular with first-time buyers, as you can easily open an account, deposit funds, and buy shares with no commission in a matter of minutes. But is eToro right for you? Read this eToro review to find out more.

In this eToro review, we cover everything you need to know about eToro This includes the types of shares you can buy, fees and commissions, trading tools, payment methods, ease-of-use, regulation, and more. Let’s find out whether eToro is the right broker for you.

What is eToro?

eToro is an online brokerage firm that was first launched by a group of fintech entrepreneurs in 2007 in Isreal. The platform offers a range of asset classes and allows eToro users to buy assets in the traditional sense as well as trading contracts for difference (CFDs).

In the traditional ownership department, eToro allows you to buy shares, ETFs, and cryptocurrencies, while it offers CFDs for stocks, indices, bonds, hard metals, energies, and more

One of the most appealing aspects of eToro is its industry-leading pricing structure, as it’s one of the few platforms in the space that allows you to buy shares on a commission-free basis. This is also the case for cryptocurrencies like Bitcoin and over 153 ETFs. As a share dealing platform that is targeted to newbie investors, eToro is suitable for those of you that are yet to buy stocks online.

This is because it takes just minutes to get set up with a trading account, and you can easily deposit funds with a debit/credit card, e-wallet, or bank account. Then, you simply need to choose which shares you want to buy, how much you want to invest, and then confirm the transaction.

We should also make reference to the social and copy trading features hosted at the eToro trading platform, which are among the main reasons behind eToro’s rapid rise in popularity. These allows you to interact with other investors in a Facebook-esque format, and even copy the trades of other users, adding a new dimension to traditional trading.

What Shares Can You Buy on eToro?

eToro lists over 1,700 companies from various stock markets. Although this is less than brokers such as IG or Hargreaves Lansdown, you still have a good number of companies to choose from, including many of the best shares in 2020. For example, if you are looking to invest in UK companies such as BP, Royal Mail, Tesco, or HSBC, you can do this with ease at eToro.

Additionally, if you are looking to add international stocks to your portfolio, eToro also gives you ample choice. At the forefront of this is the US markets. Across the New York Stock Exchange (NYSE) and NASDAQ – eToro gives you access to hundreds of well-known American firms.

The international stock exchanges that eToro allows you to access are as follows:

  • Amsterdam
  • Brusells
  • Copenhagen
  • Frankfurt
  • Helsinki
  • Hong Kong
  • Lisbon
  • Madrid
  • Milan
  • NASDAQ (US)
  • NYSE (US)
  • Oslo
  • Paris
  • Saudi Arabia
  • Stockholm
  • Zurich

This includes the likes of Apple, Amazon, Facebook, IBM, Ford Motors, Nike, Disney, and more. As we cover in much more detail further down in our eToro review, you can access all of the above exchanges in a 100% commission-free basis.

When it comes to the specific types of stocks that you can buy, this includes everything from tech stocks, retail stocks, banking stocks, food and beverage stocks, and even cannabis stocks! This also includes a good selection of dividend stocks for those of you that seek passive income.

You can keep track of your favourite stocks via eToro’s customisable watchlists.

Fractional Shares at eToro

eToro is one of the few UK brokers that allows you to take advantage of ‘fractional ownership’. As the name implies, this allows you to buy a ‘fraction’ of a stock. This is hugely beneficial for a number of reasons. For example, let’s suppose that you plan to add some US stocks to your eToro portfolio.

Unlike the London Stock Exchange – which prices companies in pennies, the US markets are denominated in dollars (as opposed to cents). As such, some of the most traded companies on the NYSE and NASDAQ have a share price that runs into the hundreds – and often thousands, of dollars.

Let’s take Amazon as a prime example, At the time of writing this eToro review, the retail giant has a stock price of $3,184. In pounds and pence that equates to roughly £2,400. For most of us, we wouldn’t be looking to spend that much money on a single share. Not only does this hinder your ability to create a diversified portfolio of stocks – but it might be much more than you had planned to invest.

But, by buying Amazon shares at eToro, you would only need to meet a $50 minimum or £40-ish. In other words, if you invested £40 into Amazon, you would own roughly 1.6% of a single share. This fractional ownership offering at eToro is available across all 1,700+ shares at the platform.

ETFs

If you are interested in using eToro for commission-free access to the global stock markets but are not quite sure which companies to choose, it might be worth considering an ETF. This will allow you to invest in a basket of different stocks through a single investment.

Once you allocate funds into an ETF at eToro, you won’t need to do anything else until you decide to cash your investment in. This is because the ETF provider will buy and sell shares on your behalf. In total, eToro hosts 153 ETFs from a range of different sectors.

In particular, eToro offers ETFs from three of the largest providers in this segment of the financial scene – Vanguard, iShares, and SDPR. This allows you to invest money into some of the most popular ETFs globally. For example, all three of the aforementioned providers offer an ETF that tracks the S&P 500 with ease.

S&P 500 ETF at eToro

This is the most traded stock market index in the world and it tracks 500 large-cap companies listed in the US. In other words, by making a single investment into an S&P 500 ETF at eToro, you are buying shares in 500 different firms.

If you want to take your diversification strategy to the next level, eToro also offers ETFs that give you access to bonds. For example, the Vanguard Total International Bond ETF contains over 6,000 bond instruments from a variety of markets. Once again, you can invest in the entire basket of assets by making just a single ETF trade.

In terms of minimum investments, ETFs at eToro can be purchased from just $50. This is big news for UK investors, as most online brokers require significantly more. In fact, if you were to go direct the ETF provider itself – the likes of Vanguard requires a minimum investment of £500.

Other Assets at eToro

If you want to diversify into a range of asset classes, eToro has you covered.

Here’s a break down of what else you can trade at the platform:

  • Indices: eToro offers 3 indices that you can buy or sell at the click of a button. This includes the FTSE 100, Dow Jones 30, France 40, S&P 500, NASDAQ 100, Japan 225, and more.
  • Cryptocurrency: You can buy 16 different cryptocurrencies at eToro at a minimum investment of just $25. This includes Bitcoin, Ethereum, Ripple, Bitcoin Cash, Ripple, and more. There’s also cryptocurrency trading for crypto cross-pairs like BTC/ETH. You can either buy cryptocurrencies and own the assets or do cryptocurrency trading via CFDs.
  • Commodities: You can also trade commodities at eToro. This covers various oil and natural gas markets, gold, silver, copper, and several agricultural products.
  • Currencies (FX): eToro also offers an in-depth currency trading facility that covers over 40+ pairs.

It is important to note that apart from stocks, ETFs, and cryptoassets,  all other asset classes at eToro are traded via CFDs (contracts-for-differences). This means that you can trade the future value of the asset in question without needing to store or own it. In particular, this would be highly condusive for gaining exposure to hard assets like gold, silver, or oil.

Although you won’t own the underlying asset, CFDs at eToro provide you with two key benefits that you won’t find when investing in the traditional sense – leverage and short-selling.

Just remember that CFDs are complex instruments with a high risk level, particularly if you’re using leverage, so make sure you do your research and have a sound understanding of how CFDs work before trading with real money.

eToro Leverage

Leverage allows you to trade with more money than you have in your account. At eToro, the broker follows all regulations imposed by the European Securities and Markets Authority (ESMA). As such, those of you based in the UK (and mainland Europe) will be capped by the amount of leverage that you can apply.

This stands at 1:5 on stocks, 1:20 on gold, and 1:30 on major currency pairs. You can also get 1:2 on cryptocurrency trading and 1:10 on non-gold commodities.

If you’re not sure how leverage works at Toro, you are essentially multiplying your stake by your chosen factor. For example, let’s suppose that you staked the equivalent of £100 on gold. If the price of gold increased by 10% and you applied the maximum leverage of 1:20 – then your £10 profit would be amplified to £200.

eToro Short-Selling

One of the most popular features at eToro is that of its short-selling facilities. Put simply, this allows you to speculate on the value of an asset going down.

For example, let’s suppose that you have performed some in-depth research on HSBC shares. As per your findings, you believe that the shares are heavily overvalued. While most UK investors will simply avoid making a purchase, the shrewd traded will look to short-sell HSBC shares to profit from falling prices.

So, if you placed a £500 sell order on HSBC and the shares fell by 20% – your profit would amount to £100. In order to do this, you will need to trade your chosen asset via CFDs.

eToro Dividends

One of the most common questions that we are asked if whether or not eToro pays dividends. The simple answer to this is yes – by investing in shares and ETFs at eToro you will be entitled to dividend payments as and when they are distributed by the respective organization.

In the case of shares, the company will transfer your dividend payment to eToro. In turn, the broker will add the funds to your cash balance. You can then withdraw the money out or better – reinvest the funds into other assets. This will give you the best chance possible of taking advantage of compound interest.

When it comes to ETFs, providers like Vanguard and iShares typically make a payment every three months. This is because the respective basket of assets will attract dividend payments throughout the month – so it would make it unviable to keep making individual payments.

Instead, your quarterly payment will cover all dividends received by the ETF provider in the relevant period. Once again, the ETF dividends will be reflected in your eToro account and available for immediate withdrawal.

eToro Fees and Commissions

One of the most important metrics that you need to look in to before joining a UK stockbroker is that of its fee policy. This doesn’t include just share dealing charges, as there are other fees that might be applicable.

As such, below we give you a full breakdown of what fees you will pay at eToro.

No Share Dealing Fees

The headline offering at eToro is that of commission-free stock trades. This is the case with each and every stock that eToro lists, whether that’s in the UK or overseas. Such a generous fee policy is in stark contrast to some of the larger UK share dealing sites, which is one of the main reasons why eToro has since amassed a customer base of over 12 million investors.

For example, popular UK broker Hargreaves Lansdown charges an entry-rate of £11.95. You need to pay this when you buy your chosen shares and then again when you sell them. With that in mind, let’s suppose that you wanted to buy £50 worth of Royal Mail shares. At a rate of £11.95, you would end up paying a nominal-rate of 23.9%! At eToro, that very same trade would cost you £0.

Take note, you will only avoid share dealing charges at eToro on the proviso that you:

  • Do not apply leverage
  • Do not short-sell the company

Either of the above actions would mean that you are trading stock CFDs, meaning that you are trading the asset as opposed to investing in it.

Buying £1,000 Worth of Shares at eToro vs Other UK Brokers

If you were to buy £1,000 worth of shares at eToro, IG, or Hargreaves Lansdown – below we list the fees that you should expect to pay.

eToro IG
Hargreaves Lansdown
UK Shares £0 £3 or £8 £5.95 to £11.95
International Shares
£0 £0 or £10
£11.95 or 1% (min £20 / max £50)

Longing £1,000 Worth of Share CFDs at eToro for 1 Week vs Other UK Brokers

If you were to enter a £1,000 long stock CFD position at eToro, Plus500, or MarketsX – below we list the fees that you should expect to pay.

eToro Plus500 MarketsX
S&P 500 £1.20 £1.05 £1.30
Europe 50 £1.35 £0.65 £1.25
Apple £3.15 £4.45 £3.20

No Stamp Duty

In addition to a 100% commission free share dealing service, eToro has taken things one step further by waving all stamp duty fees. Ordinarily, all UK investors are required to pay a 0.5% stamp duty tax on all share purchases. For example, if you bought £10,000 worth of GlaxoSmithKline shares you would need to pay £50 in stamp duty.

Other Fees

There are some fees to look out for when using eToro.

The Spread

In the world of stocks and shares, the spread is the difference between the ‘bid’ price and ‘sell’ price of a company. This is an important concept to understanding, as it is an indirect trading fee that must be included in your end-to-end ROI (Return-on-Investment).

eToro does not have a specific structure on spreads, insofar that it will change depending on market conditions. In other words, if you trade during standard market hours then you will benefit from the most competitive spreads. To give you an idea of what you will pay, the bid and ask price on Royal Mail shares at the time of writing (during standard UK trading hours) is 174.24p and 174.80p. This translates to a spread of approximately 0.32%. This is actually very reasonable when you consider there are no share dealing charges in play.

Inactivity Fee

eToro charges an inactivity fee of $10 per month after one year of inactivity.

Deposit Fees and Withdrawal Fees

eToro does not charge a specific deposit fee per-say. But, there is an underlying currency conversion fee that you need to take into account. This is because all account balances at eToro are denominated in US dollars. So, when you fund your eToro account with a debit/credit card, e-wallet, or bank account, you will incur a 0.5% currency conversion fee. This means that a £1,000 deposit would cost you £5.

When it comes to withdrawals, eToro charges a flat fee of just $5 – which is about £4.

eToro Stocks and Share Dealing Platform

In terms of buying and selling shares at eToro, the process is extremely simple. In order to find your chosen investment, you have two options.

  • You can either search for the specific company to be taken straight to its respective investment page
  • You can browse the eToro stock library and then filter-down by the exchange or sector of the company

Stock Orders

Although eToro is tailored to newbie investors, you will still have access to several orders when placing a trade.

This includes:

  • Market Order: This allows you to place a stock trade at the next available price. If the respective stock exchange is open, your share trade will be executed in a matter of seconds.
  • Limit Order: If you want to buy your chosen shares at a specific price, eToro allows you to set up a limit order. Take note, your order will only be executed if and when the trigger price is met. If it isn’t, your share trade will remain pending until you cancel it.
  • Stop Loss Order: This particular order is more suited for those of you that wish to buy and sell shares on a short-term basis. Essentially, you can elect to have your trade closed automatically when your investment goes down by a certain amount.
  • Take Profit Order: This particular order is also more suited for short-term traders. This allows you to close your trade automatically when a pre-defined profit target is met.

In effect, if you are looking to buy shares at eToro and hold on to them for a number of years, a market order is likely to suffice.

eToro Review about How to Buy Shares on eToro Platform

eToro Social and Copy Trading

eToro is often referred to as a ‘social trading platform’ – and for good reason. For those that are new to the social trading phenomenon, this works much like a social media platform but for the stocks and shares investment space. In other words, you have the opportunity to discuss and shares trading ideas, and even get investment advice, with your fellow eToro members in a public setting.

For example, let’s suppose that an experienced investor at eToro published some trading ideas for the upcoming week. Not only would you be able to view the publication, but you can also post a reply.

This is especially useful if you are super-new to the investment arena and you want to pick up knowledge and insights along the way. You can then add your chosen eToro members to your ‘friend list’, which then allows you to follow the user’s activity at the platform.

Copy Trading

As great as social trading at eToro is, nothing quite matches its copy trading feature. As the name suggests, this allows you to pick an eToro popular investor and then copy their trades like-for-like. You can copy the trader’s entire portfolio, as well as all future investments,

This means you can essentially invest in stocks and shares without doing any of the research you would otherwise have to. So if you’re a beginner learning how to invest in stocks but want to invest at the same time, you can back do so by using eToro’s CopyTrader.

The best thing about it is that you can invest an amount that you feel comfortable with – as long as you meet a $200 minimum.

  • For example, let’s suppose that you copy a trade that has £100,000 invested across 30 different stocks.
  • Of this figure, the trader has 5% in Facebook stocks – amounting to £5,000
  • You, however, invest just £1,000 into the copy trading portfolio
  • As everything is proportionate, your 5% investment in Facebook will amount to a holding of £50!

There are no additional fees to utilize the copy trading feature at eToro, and you can exit your position at any given time. In fact, you can manually cancel individual orders from within a portfolio, which gives you 100% control of your money.

Best eToro Traders to Copy

At the time of writing, there are just under 710,000 traders that you can copy at eToro. Fortunately,  the platform offers a full range of filters that ensures you are able to find a top-rated trader that not only meets your long-term financial goals – but one that will make you consistent gains.

To give you an idea of the types of things you should be looking for when choosing the best eToro traders to copy, check out the list below:

  • Overall returns since the trader joined eToro
  • Month-by-month returns
  • Risk rating (1 being the lowest and 10 the highest)
  • Preferred asset class (shares, ETFs, etc.)
  • Average trade duration (indicates whether they are a short, medium, or long-term investor)
  • Number of traders copying them and total assets under management

Finding a trader to copy at eToro can be a time-consuming process. After all, you have thousand upon thousands of potential investors to choose from.

With this in mind, below we have listed three of the best eToro copy traders to consider right now.

1. Jay Edward Smith – Jaynemesis – Top-Rated Trader With 68% Returns in 2020 YTD

Make no mistake about it – Jay Edward Smith, who goes under the username ‘Jaynemesis’, is one of the hottest eToro copy traders of 2020. First and foremost, the trader is looking at 2020 gains of just over 68% (as of mid-October 2020).

This is unprecedented when you consider the wider market uncertainties of COV-19 – and the fact that many stocks are still worth less than pre-pandemic levels. Even more impressively, apart from a small 0.57% loss in September 2020 – Jay Edward Smith finished each of the prior 14 months in the green. In 2018, the trader returned investors just over 52%, which again – is huge.

Jay Edward Smith - Jaynemesis

Taking a closer look at the trader’s portfolio, Jay Edwards Smith has a diversified basket of stocks. This includes everything from Microsoft and Etsy to UPS, Canadian Solar, and Beyond Meat. Although 95% of the trader’s portfolio is in shares, he also has a small allocation of Bitcoin and ETFs.

Jay Edward Smith - Jaynemesis

Previously, Jay Edward Smith has also dabbled in indices and commodities. Nevertheless, the trader has an eToro risk rating of 5/10, which is up from the 2/10 he had in April 2020. Currently, this top-rated copy trader has over 26,000 followers and more than $5 million worth of assets under management.

2. Shamsher Malik – ShamsherMalik – Low-Risk Share and Forex Trader (55% Gains 2020 YTD)

If you don’t feel comfortable backing a copy trader with a risk rating as high as Jay Edward Smith (5/10) – it might be worth considering Shamsher Malik. This UK-based trader – which specializes in fundamental analysis, likes to take a low-risk approach to investing. In particular, most of the traders’ focus is on shares and forex.

Shamsher Malik

On average, Shamsher Malik will keep a position open for 2 weeks – illustrating that he likes to follow short-term trends. Although the trader has a low risk-rating score of 3/10 – his returns to date have been very impressive. For example, in the first 10 months of 2020 alone, Shamsher Malik is looking at returns of 12.32%. Sure, this is much lower than Jay Edward Smith.

Shamsher Malik

But, it is important to remember how the risk vs reward ratio works. After all, the more risk your chosen copy trader takes, the more you should expect in terms of profit. Nevertheless, in 2019 the trader made even better returns at just over 32% for the year. Shamsher Malik also has an impressive drawdown percentage rate – which currently amounts to an average of 10.45% annually.

3. Mantas Dabkevicius – Mantasdabk – Up and Coming Swing Trader (55% Gains 2020 YTD)

If you have an interest in shorter-term swing trading, it might be worth considering up and coming trader Mantas Dabkevicius. Based in Denmark and going under the username ‘Mantasdabk’, this eToro copy trader like to buy and sell assets on a regular basis. In fact, he has an average trade duration of just 1.5 weeks.

Furthermore, Mantasdabk places just under 20 trades per week on average – so he’s super active. In terms of asset classes, this eToro copy trader has a 60% exposure to stocks. After that, the trader likes to access everything from commodities, forex, cryptocurrencies, and ETFs.

Mantas Dabkevicius - Mantasdabk

This ensures that you are able to trade multiple markets around the clock in a 100% passive-free manner. In terms of performance, Mantas Dabkevicius only joined the eToro platform in December 2019. Nevertheless, the trader made 4.85% in his first month and is now looking at 2020 YTD gains of 55.62%.

Mantas Dabkevicius - Mantasdabk

This translates into 58.70% profitable weeks since he joined eToro. Although such large returns might give you the impression that Mantasdabk is a high-risk trader, he actually has a very respectable risk rating score of 4/10. This is down from the 6/10 average risk score that Mantasdabk has in March 2020 – which is good.

CopyPortfolios

eToro also offers more advanced copy trading tools called CopyPortfolios. These are professionally managed portfolios that utilise artificial intelligence and algorithmic trading, and there are two types. Top Trader Portfolios are made up of the best performing traders on eToro, while Market Portfolios bundle together a number of assets under one chosen market strategy.

Top Trader Portfolio

Regarding the former, one of the most popular Top Trader Portfolios available on the platform is that of ‘GainerQtr’. This CopyPortfolio is currently up just under 20% in 2020. In the previous year, it returned just over 14%. The portfolio is well-diversified, with 5 traders making up just over 25% of its weighting. The remainder is split across a vast number of traders from a variety of target markets.

copyportfolios at eToro

While these are more advanced than the standard CopyTrader tool, you need to invest at least $5,000 into a CopyPortfolio. On the flip side, this is the most passive investment option at eToro, as everything is managed for you. There is no requirement to personally choose which investors to copy now do you need to worry about constantly rebalancing your portfolio.

Market Portfolios

When it comes to Market Portfolios, this allows you to target a specific segment of the financial markets. One such example is that of the ‘RemoteWork’ portfolio. As the name suggests, this gives you exposure to companies associated with the work-from-home space. This includes the likes of Twilio, Zoom, Shopify, Adobe, Salesforce, and more.

copyportfolios at eToro

This eToro Market Portfolio has performed extremely well since its inception at the platform in 2018. Over the past three years, it has returned 82% (2020 YTD), 41% (2019) and 49% (2018) – which is huge. Other niche sectors that are covered by the eToro Market Portfolios feature includes Renewable Energy, Driverless Cars, Mobile Payments, Food and Tech, and Gaming.

Unlike Top Trader Portfolios – which requires a minimum investment of $5,000 – some Market Portfolios can be accessed from just $1,000. The specific amount will, however, depend on your chosen portfolio  -so be sure to check this for yourself.

Charting, Research and Analysis at eToro

eToro is slightly lacking when it comes to research and analysis. Although the eToro web platform has integrated its stock research page with TipRanks, this doesn’t provide an abundance of information. For example, you are unable to view earnings reports, published accounts, or in-depth expert analysis.

You can, however, view a range of analytical data surrounding your chosen stock. This includes a plethora of charts and graphs around the stock’s historical pricing action, as well as what the general consensus is from leading hedge funds. In terms of a fundamental news feed, this again is lacking at eToro. This is limited to the ‘sharing’ of news developments by users of the platform.

As such, you are best advised to seek your research material from an external source such as Yahoo Finance or Morningstar.

eToro Mobile App

If you’re the type of trader that likes to keep tabs of your investments at all times, eToro offers a free stock trading app. The mobile trading app is available to download on both iOS and Android devices. If you don’t have one of the aforementioned operating systems, you will be able to access eToro from your standard mobile web browser.

 

Both the investment app and the mobile browser-based versions allow you to perform the same account features as the main desktop website. Whether that’s buying and selling shares, checking the value of your portfolio, or depositing and withdrawing funds – everything can be facilitated via your mobile phone.

 

Crucially, the trading experience when using the eToro mobile app is not hindered by smaller screens. This is because the application has been fully optimized for mobile usage – making the remote investment process seamless. If you are looking to take your investment endeavours to the next level – we would suggest taking full advantage of what the eToro app offers.

 

For example, you can check the value of your stock positions at the click of a button no matter where you are. You can also make last-minute investments without needing to wait until you get home. This also rings true when it comes to closing a losing position. After all, needing to wait hours on end until you have access to your desktop device could be extremely costly.

eToro Demo Account

If you’d like to get a feel for eToro and practice your trading before putting your money on the line, you can do so courtesy of the eToro demo account. This provides $100,000 of paper trading money and offers the full functionality of the eToro platform, including its copy trading tools, so it’s a great way to learn more about the platform.

Payments at eToro

One of the best things about eToro is that it offers a wide selection of payment methods to choose from. These include:

  • Debit Cards
  • Credit Cards
  • Paypal
  • Skrill
  • Neteller
  • Unionpay
  • UK Bank Transfer
  • Wire Transfer

The above payment methods offer much more in the way of flexibility, as a lot of traditional brokers in the UK will only allow you to deposit funds via bank transfer. Degiro is a good example in this respect – with the end-to-end deposit process often taking days on end. This can be frustrating if you want to buy shares instantly.

At eToro, however, as long as you use a debit/credit card or e-wallet to make the deposit – your funds will be credited instantly and thus – you can start investing straight away.

In terms of account minimums, eToro requires a minimum deposit of $200 – which is about £160. You might notice that everything at eToro is denominated in US dollars. This is because the platform offers over 1,700 shares across 17 international markets. By sticking to one currency – it means that you do not need to keep worrying about constant FX fluctuations.

As a result of this, all deposits at eToro do some with a 0.5% currency conversion charge. So if you’re depositing in GBP, EUR, AUD or any other currency that isn’t USD, you’ll pay a small fee  For example, if you were to deposit $1,000 – the fee would amount to $5. With that being said, eToro waves the 0.5% stamp duty fee that you would ordinarilly pay when you buy UK shares.  As such, the FX fee is effectively countered.

eToro Withdrawals

When it comes to making a withdrawal, the process is also super easy. You simply need to head over to your account dashboard, elect to make a withdrawal, and enter the amount that you want to take out. As per anti-money laundering laws in the UK, you will need to withdraw at least the deposit amount back to the same funding source.

cFor example, let’s suppose that you deposited $500 with your debit card and you make a withdrawal for $600. At least $500 of your withdrawal request must be sent to the same debit card that you used to deposit – while the $100 balance can be sent to an alternative source.

The minimum amount that you can take out from the platform is $30. There is a flat fee of $5 on all withdrawal requests – irrespective of the amount. We should also note that eToro charges the 0.5% FX fee on withdrawals. This will be taken at the current GBP/USD at the time of the withdrawal request.

Is eToro Safe?

While tradable stocks and share dealing charges are super-important metrics to look out for when choosing a broker, it is imperative that you check the platform’s regulatory standing. This will ensure that you are using a reputable and trusted UK broker that keeps your funds safe.

In the case of eToro, the platform holds three regulatory licenses:

  • Financial Conduct Authority (FCA)
  • Australian Securities and Investments Commission (ASIC)
  • Cyprus Securities and Exchange Commission (CySEC)

If you are a UK investor, then you will fall under the remit of the FCA. The good news is that eToro (UK) Limited is a member of the UK’s Financial Services Compensation Scheme (FSCS). Although its advisory document states that UK investors are covered by up to £50,000, this has since been increased to £85,000 by the FSCS.

On top of its regulatory licenses, it is important to remember that eToro has been active in the online stock trading space since 2007. This gives it a track record of more than 14 years. As previously noted, this includes a customer base now than exceeds 12 million investors. All in all, you should have no concerns about the safety of your funds at eToro.

How to Get Started in eToro?

If you like the sound of eToro and wish to get started with a commission-free stock account today, below you will find the required steps.

Step 1: Open an Account

First, you will need to visit the eToro homepage and open an account. As with any FCA-regulated share dealing platform, this requires some personal details. This will include your name, home address, date of birth, and contact details. You will also need to supply your national insurance number.

eToro sign up

Step 2: Verify Your Identity

eToro will need to ensure that you are the true owner of your account. As such, you will be asked to upload a couple of verification documents.

eToro verify account

This includes:

  • A government-issued ID such as your passport or driver’s license
  • A proof of address such as a recent utility bill or bank account statement

eToro will usually verify your documents within the hour. In the meantime, you can proceed to fund your account.

Step 3: Deposit Funds

Depositing funds at eToro is simple. You just need to select which payment method you wish to use (see above for a breakdown of options) and then determine how much you wish to deposit. The minimum deposit is $200 (about £160). Unless you are opting for a bank transfer, the deposit will be credited to your account instantly.

eToro deposit

Step 4: Buy Shares

Now that your eToro account has been funded, you can proceed to buy some shares. If you know which company you want to invest in, enter it into the search box at the top of the page. If you want to browse the eToro stock library, click on the ‘Trade Markets’ button followed by ‘Stocks’. You can filter this down by the stock exchange or sector that the shares are associated with.

Buy shares on eToro

In our example, we are looking to buy shares in Nike, so we enter this into the search box and click on ‘Trade’.

Then, it’s just a case of specifying how much we wish to invest. As noted earlier, you need to state this in US dollars. You can invest a minimum of $50 into your chosen share, which is about £40.

To complete your stock order, just click on the ‘Open Trade’ button during market hours, or the ‘Set Order’ button if the respective stock exchange is currently closed.

eToro Pros and Cons

Pros

  • Buy shares without paying any dealing charges
  • No annual fees
  • More than 1,700 shares to choose from
  • Copy and social trading features
  • Buy shares or trade CFDs
  • Access UK and international stocks
  • Very user-friendly
  • Supports debit/credit cards, e-wallets, and bank accounts
  • Minimum share investment of just $50 (£40)

Cons

  • 0.5% currency conversion fee when you deposit
  • Limited research and analysis department

The Verdict

In summary, it is clear to see why eToro has amassed a customer base of over 12 million investors. Not only is the platform super-simple to use, but you can buy shares without paying any commissions or dealing charges. There is no annual fee to take into account either, and supported payment methods include debit/credit cards, bank accounts, and e-wallets.

For those of you that are looking to place more sophisticated trades, eToro also supports leverage and short-selling. This is available on its 1,700+ stocks, as well as indices, cryptocurrency trading, bonds, forex, and commodities. All in all, eToro is ideal if you are looking to invest in the stock markets in a simple, safe, and cost-effective manner.

Like the sound of eToro? Simply click the link below to register an account today!

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FAQs

Can you really make money on eToro?

Yes - you can make money by investing or trading at eToro. However - and much like any online brokerage site - this is 100% dependent on your trading performance. That is to say, there is no guarantee that you will make money at eToro - as your returns are dictated by the investment decisions that you make.

Is eToro available in the US?

Yes - eToro is available in the US. However, not all features are offered to United States clients. In fact, you will only be able to buy shares or ETFs at the platform. This is because eToro does not have the legal remit to offer CFDs to US residents/citizens. As such, you won't be able to apply leverage on your trades - nor will you be able to short-sell. Additionally, Americans can only open an eToro account if they are resident in the US.

Is eToro legit?

Yes - eToro is legit. It is regulated by three tier-one bodies - the FCA (UK), ASIC (Australia), and CySEC (Cyprus). This ensures that you have regulatory oversight on three fronts. More specifically, if you're based in the UK you will also benefit from the protections provided by the FSCS. This means that were the worse to happen and eToro went bankrupt - your money would be protected up to the first £85,000.

What are the eToro supported countries?

eToro is available in lots of countries. However, those based in the following jurisdictions cannot open an account:

Afghanistan Aland Islands Albania Anguilla Antarctica Antigua and Barbuda Armenia Aruba Bahamas Barbados Belarus Benin Bermuda Bhutan Bonaire Bosnia and Herzegovina Botswana Brunei Burkina Faso Burundi Cambodia Cameroon Canada Cape Verde CAR Chad Chagos Islands China Congo Republic Cote d'Ivoire Crimea Region Cuba Curacao Democratic Republic of the Congo Djibouti Dominica El Salvador Equatorial Guinea Ethiopia Faeroe Islands Fiji Gabon Gambia Ghana Greenland Grenada Guatemala Guinea Guinea-Bissau Guyana Haiti Honduras Iran Iraq Jamaica Japan Kyrgyzstan Laos Lesotho Liberia Libya Malawi Maldives Mali Marshall Islands Mauritania Mauritius Micronesia Moldova Mongolia Montenegro Mozambique Myanmar Namibia Nepal Netherlands Antilles Nicaragua Niger Niue North Korea North Macedonia Pakistan Palau Papua New Guinea Paraguay Pitcairn Islands Rwanda Saint Kitts and Nevis Saint Lucia Saint Vincent Samoa San Marino Sao Tome Serbia Sierra Leone Sint Maarten (Dutch Part) Somalia Sri Lanka Sudan Suriname Svalbard and Jan Mayen Swaziland Syria Tajikistan Tanzania Togo Trinidad and Tobago Tunisia Turkey Turkmenistan Turks and Caicos Islands Uganda Uzbekistan Vanuatu Virgin Islands Yemen Zambia Zimbabwe

Is eToro good for beginners?

Yes - eToro is an ideal online trading platform if you are a complete newbie. This is because eToro was designed exclusively to cater to investors of all skill sets. As such, the process of opening an account, depositing funds, and buying/selling assets can be completed by anyone. Even if you get stuck - eToro offers a highly comprehensive help section. This includes FAQs, guides, and video explainers. Failing that, you can always contact the eToro customer support team and they will be happy to assist.

Is eToro really free?

At first glance, it might appear that a 100% commission-free offering is somewhat 'too good to be true'. However, we can confirm that eToro does, in fact, allow you to buy shares, ETFs, or cryptocurrencies in a fee-free environment. This means that you will not pay any dealing fees, and there is no ongoing charge, either. With that said, you will need to pay a 0.5% FX fee when you make a deposit/withdrawal. Furthermore, eToro withdrawals come with a flat fee of $5 - which is about £4.

What shares can you buy at eToro?

At the time of writing, eToro offers in excess of 1,700 shares. This covers 17 international markets - including the UK, US, Germany, France, Spain, Sweden, Saudi Arabia, and more. eToro is constantly adding new shares to its platform. In particular, when a company completes its IPO process, you will often find the stocks listed at eToro within a few days.

What is the minimum deposit for eToro?

The minimum deposit at eToro is $200. If you're based in the UK, this amounts to about £160.

How do you withdraw money at eToro?

If you want to make a cash out at eToro, the process takes seconds. All you need to do is log into your account, elect to make a withdraw, and enter the amount you wish to cash out. Depending on your payment method, you should receive the funds in a couple of days. If it's your first time making a withdrawal, you will first need to have your identity verified. This can be done by uploading a copy of your passport/driver's license and a proof of address. This is why it's best to complete the identity verification process when you first open an account - as you can avoid delays when it comes to making a withdrawal.

Does eToro accept Paypal?

Yes - eToro does accept Paypal. In fact, the platform offers a variety of e-wallets - such as Skrill and Neteller.

All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Kane Pepi

About Kane Pepi

Kane Pepi is a British researcher and writer that specializes in finance, financial crime, and blockchain technology. Now based in Malta, Kane writes for a number of platforms in the online domain. In particular, Kane is skilled at explaining complex financial subjects in a user-friendly manner. Academically, Kane holds a Bachelor’s Degree in Finance, a Master’s Degree in Financial Crime, and he is currently engaged in a Doctorate Degree researching the money laundering threats of the blockchain economy. Kane is also behind peer-reviewed publications - which includes an in-depth study into the relationship between money laundering and UK bookmakers. You will also find Kane’s material at websites such as MoneyCheck, the Motley Fool, InsideBitcoins, Blockonomi, Learnbonds, and the Malta Association of Compliance Officers.