With interest rates on savings accounts in Ireland so low , some people might be looking into alternative investment options for some of their money.
Buying shares is one method of potentially making a return from an increase in share value and also from dividends.
After sharp falls in share prices in March, there has been some good recovery since then. Interestingly, we saw larger numbers of people searching for ” How to buy shares in Ireland” since the stock markets fell.
Some online stockbrokers had so many new customers in March and April , that they had to put new registrations on a waiting list. DEGIRO was one of them. – but as of July 12th they no longer have a waiting list.
There have been some huge share price rises in recent years of companies like Tesla , Amazon, Google, Facebook and Apple. So it’s understandable that people want to try and make some money from shares.
Investing in stocks and shares involves risk of loss. Shares can fall in value as well as rise.
We do not recommend that anyone should invest money they cannot afford to lose. If you want a guarantee that you will not lose any of your money, then the stock market is probably not for you .
The period after a stock market crash , as happened at the start of coronavirus, can be a good time to buy shares. You have a chance to take advantage of the lower share prices or look for companies that will do well in the current situation. Of course – prices could fall lower again.
Stocks and Shares
A share is a small part of a company that you can buy for a set price.
When someone buys shares in companies like Amazon , Alphabet (Google) , Ryanair or Tesla , they 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. The Stock Market is made up of various exchanges where shares are bought and sold by stockbrokers. These include the London Stock Exchange, New York Stock Exchange etc.
The Irish Stock exchange is known as the ISEQ.
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.
You can buy shares with fees as low as 50c in some cases.
Listed below is a comparison of the share trading fees at some online stock brokers that operate in Ireland.
We have compared the fees charged by DEGIRO, Interactive Brokers, Davy Select and Goodbody Online.
The fees shown are for buying or selling shares / ETFs. The figures were checked in August 2020. We have not included stamp duty in this comparison because it was the same amount for all providers.
(More about ETFs here)
In our comparison of online share dealing fees and portfolio management costs – DEGIRO came out as the cheapest.
In one example they were 40 times cheaper than the most expensive alternative.
Share Dealing Charges Compared
|Buy €1000 of Irish shares |
each month for a year
|Buy €10,000 worth of |
US shares @ $10 each
and keep for 5 years.
|Buy €5000 of UK |
shares and keep
for 2 years then
|Buy €1,000 of Euro|
ETFs each month
for 5 years
Review of Online Share Dealing Fees in Ireland
Dutch firm DEGIRO launched its online stock brokerage services in 2013.
DEGIRO now operates in 18 European countries – including Ireland. the Investors Chronicle / Financial Times voted DEGIRO the Best Low-cost Stockbroker in 2018 and the best mobile share dealing app in 2019.
DEGIRO is regulated by the Netherlands Authority for the Financial Markets (AFM) and the Dutch Central Bank (DNB). It uses EU passporting rules to allow it to operate across the single market. Stock dealing can be carried out on the DEGIRO app or on their desktop site.
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)
- ETFs – some free otherwise €2 plus 0.03%
- Annual fees – DEGIRO has an annual fee you for connecting you to exchanges. This fee is currently €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%
If you bought 1000 US shares worth €10000 and kept them for 5 years , DEGIRO would charge you a total of just €25.76 including currency charges. See the table above to see more examples of DEGIRO charges compared with Interactive Brokers and other online stockbrokers.
You can sign up to DEGIRO here.
DEGIRO is partnered with Flatex Bank to hold client’s uninvested cash. Flatex bank is guaranteed by the German Deposit Guarantee Scheme. So all DEGIRO client’s cash is covered,up to €100,000.
Interactive Brokers is a worldwide company and Irish residents will deal with the UK branch, Interactive Brokers U.K. Limited. They are authorised and regulated by the UK Financial Conduct Authority. Share trading can be done on desktop or also on the IB app
Online Fees at Interactive Brokers
- US shares $0.005 per share
- Irish shares not available to buy.
- UK Shares £6 per order up to £50k
- Euro Shares 0.1% , Min €4 max €29
- Maintenance Fees : Minimum commission of $10 every month. (This fee is waived if you have over $100k in portfolio
Their $10 minimum commission per month makes them an expensive option for most investors. If you bought 1000 US shares @$10 each and kept them for 5 years, Interactive Brokers would charge you $600 .
Compared with DeGiro – Interactive Brokers would be about €500 more expensive.
Davy stockbrokers are based in Dublin and are 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. Davy Select seems to be a popular site for people checking out Irish ISEQ share prices You cannot buy or sell shares on the Davy app.
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.
If you bought €10,000 worth of US shares with Davy Select ,and kept them for 5 years, Davy would charge you €75 in commission and €950 in execution service fees: a total of €1025 . Compared with DeGiro – Davy online is €1010 more expensive.
See the table above to see more examples of how Davy compares to Degiro
Signup at Davy Select here
Goodbody has been involved in the Dubin Stock Exchange since as far back as 1874. Fexco bought Goodbody Stockbrokers in 2011 and 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.
Goodbody do not have a share trading mobile app.
Online Fees at Goodbody
- Charge of 1% on the first €25k of a transaction – then 0.5%. ( Minimum fee €25.)
- A €25 charge on all US and European trades.
- Maintenance Fee €100 year plus VAT
- Foreign exchange fees – up to 1.25%
If you bought €10,000 worth of US shares and kept them for 5 years- Goodbody would charge you €615 in maintenance fees and €125 in commission. a total of €740.
See the table above to see more examples of Goodbody fees compared with Degiro .
Sign up at Goodbody here
Alternative Share Buying Options
Revolut only allows customers to buy selected shares on the New York Stock Exchange. They do not give access to stock markets in London, Dublin or Europe. Nor do Revolut give access to ETFs, index trackers or investment trusts.
Basic Revolut account holders get 3 free trades each month. Premium account holders get 8 free trades. After you use up your monthly free limit, trades are charged at £1 each.
For now, Revolut limits each trade to just US$1,000.
There’s a 0.01% annual custody fee. If you held £10,000 worth of shares in your account, you’ll be charged £1 a year.
In the USA a share trading app called Robinhood has become very popular with novice investors. Robinhood is not available in Ireland or in the rest of Europe. It is only available for use by residents of the USA. Their planned launch in the UK earlier this year was postponed and then abandoned.
Robinhood seems to make it easier and more attractive for less experienced investors to use more sophisticated investments such as “options”. Options are a financial derivative that can give investors far greater exposure to a share price changes with an often small down payment. This can magnify gains but also potentially enhance losses. Robinhood had some bad publicity after the suicide of a customer in the USA this year after he thought he had lost several thousand dollars on the app.
If you are interested in affordable share trading in Ireland – then, as our comparison above shows, Degiro is the best option.
ETFs (Exchange Traded Funds)
Exchange-Traded Funds (ETFs) are a good method of investing in a wider portfolio of shares. You can buy ETFs from all the stockbrokers we have listed above. An ETF, also known as a tracker, is a product that follows an index, commodity, bond or composition of products. You can think of it as a basket of shares.
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. Unlike DIRT, the first €1,270 of taxable gains in a tax year are exempt from CGT. There are no tax-free exemptions with DIRT on deposits.
Taxation of Share Dividends
If your shareholding gets paid a dividend, Revenue is going to want some of that in the form of Income-tax.
Additionally , PRSI and USC may also be due on the gross dividend. These will be collected through the Self Assessment system (if applicable)
Taxation of 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 the higher rate you will pay tax on the gross dividend at the higher rate and be given a credit for the 20% tax already deducted.
Taxation of 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.
Taxation of 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 apply. You will need to declare dividend income on your Irish tax return. You will be liable for either 5% or 25% of the dividend in additional tax. (Depending on whether you pay income tax at 20% or 40%)