How DeGiro fees drag on your return: a worked example
Each charge is small enough to ignore. Added up over a year — and measured against how much you actually invested — they're often not.
Three kinds of cost
Investing through a broker like DeGiro costs money in a few different ways, and they behave differently. A transaction fee is charged per trade, so it's a fixed amount whatever the size of the order. A currency conversion cost applies when you buy or sell something priced in a currency other than your account's, and is usually a percentage of the amount converted. An exchange connection fee is charged per year for each foreign exchange you trade on, whether you trade there once or fifty times.
The amounts, which instruments are exempt and how each is charged all change over time and differ between account types, so this guide doesn't quote any. Every number below is a round, made-up figure chosen to make the arithmetic easy to follow. Check DeGiro's own current fee schedule for the real ones before applying any of this to your account.
A worked example
Say you put €200 a month into a single fund listed on a foreign exchange, priced in another currency — €2,400 over the year. Assume, purely for illustration, a fee of €2 per trade, a conversion cost of 0.25% of each amount converted, and a connection fee of €2.50 a year for that exchange.
Twelve monthly buys cost 12 × €2 = €24 in transaction fees. Converting €2,400 at 0.25% costs €6. The connection fee adds €2.50. That's €32.50 for the year, or about 1.35% of the €2,400 you invested — before the market has done anything at all. If the fund's price ended the year exactly where it started, the account would be worth roughly €2,367.50, and the return on the year would be negative.
Now buy quarterly instead: four buys of €600. Transaction fees fall to 4 × €2 = €8. The conversion cost is still €6, because it's a percentage of the same €2,400. The connection fee is still €2.50. The total is €16.50, about 0.69% of what went in — roughly half, for the same money in the same fund.
What the example shows
A fixed per-trade fee hurts small orders most. €2 on a €200 order is 1%; the same €2 on a €2,000 order is 0.1%. Anyone investing small regular amounts is paying the highest percentage rate, and batching orders into fewer, larger ones is the lever that changes it the most — at the cost of having money sitting uninvested for longer between buys.
A percentage conversion cost doesn't care how often you trade, only how much you convert. It can be avoided only by holding instruments priced in your own currency, or by keeping foreign cash — dividends paid in dollars, say — in that currency and reinvesting it there rather than converting it back and forth.
A yearly connection fee is the opposite of a percentage: it matters a lot on a small account spread across several exchanges and almost not at all on a large one using a single exchange. Five exchanges at a hypothetical €2.50 each is €12.50 a year whether the account holds €1,000 or €100,000.
Why it compounds
Money paid in fees isn't just gone once: it's money that is no longer invested, so it also misses whatever that money would have earned in every year after. A cost of 1% of each deposit means 1% less capital growing from that day forward. The fee doesn't grow, but the gap between the account you have and the account you'd have without it does, in proportion to however well the market does afterwards.
The flip side is that fees on a growing account fall as a share of the whole. A per-trade fee is a percentage of each new deposit, not of everything you hold, so in an account that mostly sits still and grows, last decade's trade fees become a smaller and smaller part of the picture. The habits that keep fees low matter most early on, when each deposit is a large part of the account.
Where the costs show up in your statement
Transaction fees and connection fees usually appear as their own lines in Account.csv, with “fee” or “kosten” in the description. The tracker counts every such line as a fee, totals them on the Income & Fees tab under “Fees paid”, and lists each one, so you can see exactly what the account has been charged and when.
Per-trade fees also appear in Transactions.csv, in the fee column next to each trade, and are part of the trade's total. Because the tracker builds each position's cost basis from that total, a buy's fee is included in what the position cost, and a sale's fee comes off what it brought in. The profit and loss on the Positions tab is already after trading costs.
Currency conversion is harder to see. If DeGiro books a separate charge for it, that's a line with “fee” in the description and it is counted like any other. A cost built into the conversion rate itself isn't a line anywhere: it shows up only as slightly fewer dollars received for the euros you converted, so no fee total can include it. Comparing the rate on the statement with a market rate for the same day is the only way to see it directly.
How fees affect your return figures
Fees reduce the account's value, so they reduce its return. The time-weighted return counts each fee line as a loss on the day it was charged, the same as a fall in price — it isn't netted out the way deposits and withdrawals are, because paying it is part of the cost of the investing being measured. XIRR sees fees through the account value: the less there is at the end for the same deposits, the lower the rate.
That also makes the index comparison on the Overview tab a slightly tougher test than it looks. The benchmark line is your deposits invested in an index on the same dates with no trading fees taken off at all, so trading costs are part of whatever gap you see between the two lines. If you trade often, that gap is worth looking at alongside the fee total.