With the interest rates on savings accounts in Ireland so low for the past few years , many people have been looking for alternative investment options for some of their money.
Buying stocks and shares is one way of potentially earning a good return from an increase in share value and also from dividends.
When people saw the big share price rises in recent years of companies like Tesla , Amazon, Google, Facebook and Apple it’s no wonder they wanted to try and make some money from shares.
Investing in stocks and shares involves risk of loss, they can fall in value as well as rise
So it is not recommended to invest money that you cannot afford to lose. If you want to guarantee that you will not lose any of your money, then the stock market is probably not for you .
The recent sharp fall in world stock markets caused by the Coronavirus scare is an example of the risk of loss.
In recent weeks as many share prices recover – we have seen large numbers of people searching for ” How to buy shares in Ireland” .
Now could be a good time to buy shares because you can take advantage of the lower share prices or look for companies that will do well in the current situation (Online). But of course – there is still the chance of prices falling again.
New customer numbers were so high that some popular online stockbrokers (Degiro was one) had to put new registrations on a waiting list – so get your applications in soon if you are hoping to buy some bargain-priced shares . At one stage there were 100,00 on the list. Degiro started working through their waiting list from May 4th onwards and the list is much shorter now.
Stocks and Shares
A share is a small part of a company that you can buy for a set price. When you buy shares in companies like Amazon , Alphabet (Google) , Ryanair or Tesla , you become a shareholder in that company.
A person can also own shares of several kinds of financial instruments: such as investment trusts, mutual funds and exchange-traded funds(ETFs)
Stock is the generic term for shares , and the Stock Market is the various exchanges where shares are bought and sold by stockbrokers. The London Stock Exchange, New York Stock Exchange etc.
Share prices can move up or down in value, depending on the performance of the stock market, the current profitability of the company and the expected future profitability or potential of the company.
Cheapest Way to Buy Shares Online in Ireland
The cheapest and easiest way to buy stocks and shares in Ireland is to have an online “execution-only” account with a stockbroker. That means you can buy or sell shares or ETFs that you chose yourself without getting any advice from a broker.
Listed below is a comparison of the share trading fees at some online stock brokers that operate in Ireland.
We have compared fees at DEGIRO, Interactive Investors, Davy and Goodbody.
(Fees shown are for buying or selling shares / ETFs and were checked in March 2020 .We have not included stamp duty in the comparisons because it will be the same for all providers. ). (More about ETFs here)
In our comparison of online share dealing and portfolio management costs – DEGIRO came out as the cheapest.
In one example they were 240 times cheaper than the most expensive online stockbroker option.
Buying Shares in Ireland - a Price Comparison
|Broker Name||Buy €1,000 of Irish Shares each month for a year.||Buy €10000 US shares on NYSE||Buy €5000 of shares|
London Stock Exchange
|Buy €10,000 Irish shares|
in 5 different companies
and keep for 5 years.
|Buy €10000 of Amazon shares each year for 5 years.|
Review of Online Share Dealing Fees in Ireland
DEGIRO is based in the Netherlands where it launched its online stock brokerage services in 2013.
DEGIRO now operates in 18 European countries – including Ireland. DEGIRO was voted the Best Low-cost Stockbroker in 2017 and 2018 by the Investors Chronicle / Financial Times.
Degiro is regulated in the Netherlands and uses EU passporting rules to allow it to operate across the single market.
Fees at DEGIRO
- Irish shares : €2 + 0.05% per trade
- UK / European shares: €4 +0.05% per trade capped at a maximum of €60
- US shares : €0.50 per trade + (USD 0.004 per share)
- Annual fees – DEGIRO has an annual fee you for connecting you to exchanges. This fee is currently just €2.50 per exchange per year but there is no fee for the Irish exchange for Irish residents.
- Foreign exchange fees – Manual = €10 plus 0.02% OR auto = 0.1%
So that means if you bought €10,000 worth of US shares each year for 5 years (such as Amazon) , DEGIRO would charge you €12.50 in maintenance fees and just €2.60 in commission- a total of €15.10 . See the table above to see more examples of DEGIRO charges compared to Interactive Investors and other online stockbrokers.
You can sign up to DEGIRO here. (Due to a surge in new registrations there may be a waiting list in place temporarily.)
Interactive Investors is based in London and regulated by the UK Financial Conduct Authority. In the UK Interactive Investors is the second largest retail stockbroker, based on the volume of customer transactions.
We have included them in the comparison – but they no longer accept applications from Ireland or anywhere else outside the UK
Online Fees at Interactive Investors
- €20 per trade up to €100k
- €52 per trade 100k to 500k then €80 per trade over €500k
- Transaction fees reduced by €5 if you trade 10 or more times in the preceding 3 months.
- Foreign exchange fees from 0.25% to 1.5%
- Maintenance Fees : €30 fee every 6 months if you don’t trade and have less than €5k in portfolio
So that means if you bought €10,000 worth of US shares each year for 5 years (such as Amazon, Tesla,Alphabet) , Interactive Investors would charge you €0 in maintenance fees and €100 in commission- a total of €100 .
Compared to DeGiro – Interactive Investors works out €85 more expensive.
Davy stockbrokers was established in 1926, the Davy Group is based in Dublin and is regulated by the Central Bank of Ireland. They manage €14bn+ of client assets, with offices in Dublin, Cork, Galway, Belfast, London and Luxembourg. Minimum investment €500.
Online Fees at Davy :
- Trading fees of 0.5% – Minimum €14.99.
- €25 Foreign Transaction Settlement Charge per trade for each trade of shares listed outside Ireland and UK .
- Foreign exchange fees max 1%.
- Minimum Fee per trade for shares listed outside Ireland and UK 0.06%.
- Execution Service Fee of €50 per quarter less any commissions paid that quarter.
So that means if you bought €10,000 worth of US shares each year for 5 years (such as Amazon, Google , Facebook) , and kept them – Davy would charge you €375 in commission and €750 in execution service fees: a total of €1125 . Compared to DeGiro – Davy online works out €1110 more expensive.
See the table above to see more examples of how Davy compares to Degiro
Signup at Davy Select here
The firm Goodbody has been involved in the Dubin Stock Exchange since 1874. Goodbody Stockbrokers was acquired by Fexco in 2011. They are regulated by the Central Bank of Ireland .You need to deposit a minimum of €5000 to open an online trading account with Goodbody.
Online Fees at Goodbody
- Charge of 1% on the first €25k of a transaction – then 0.5%. ( Minimum fee €25.)
- Also – a charge of €25 is made on all US and European trades.
- Maintenance Fee €100 year plus VAT
- Foreign exchange fees – up to 1.25%
So if you bought €10,000 worth of US shares each year for 5 years (such as Amazon or Facebook ) , and kept them – Goodbody would charge you €615 in maintenance fees and €625 in commission. a total of €1240.
See the table above to see more examples of Goodbody fees compared with Degiro .
Sign up at Goodbody here
ETFs (Exchange Traded Funds)
ETFs are another way of investing in a portfolio of shares – The stockbrokers listed above will allow you to buy and sell various ETFs as well as shares in single companies.
Read more about Buying ETF Funds here.
Stamp duty on Shares
Stamp duty is chargeable on the purchase of all Irish and UK shares. The rates are: 1% on Irish Shares and 0.5% on UK shares. This will be the same for all brokers.
Taxation of Shares
Capital Gains Tax (CGT) – if you make a gain on a share trade, the state is going to be looking for 33% of it as Capital Gains Tax . This is the same rate as the DIRT tax on deposit accounts. But – with CGT the first €1,270 of taxable gains in a tax year are exempt. There is no tax free exemptions with DIRT on deposits.
Taxation of Share Dividends
If your shareholding gets paid a dividend, Revenue is going to look for some of that too in the form of Income tax.
PRSI and USC may also be due on the gross dividend and will be collected through the Self Assessment system (if applicable)
Dividends paid by Irish companies
Irish companies will always deduct 20% tax at source from the gross dividend. If you are liable for income tax at a higher rate you will pay tax on the gross dividend at the higher tax rate and be given a credit for the 20% tax already deducted.
Dividends on UK shares
You will be liable for Irish income tax on the net dividend received by you. No credit is allowed for any UK tax already deducted from the dividend payment. You must convert the net payment received to Euros and declare it on your Irish tax return form.
Dividends on US Shares
There is a 30% withholding tax on US dividends for non-US residents. If you complete a W8-Ben form for your stockbroker, a lower 15% tax rate will then apply. You need to declare the dividend income on your Irish tax return and you will be liable for either 5 per cent or 25 per cent of the dividend in additional tax. (Depending on whether you pay income tax at 20% or 40%)