The cost of a securities account
When looking for a suitable securities account, investors often do not see at first glance what costs are incurred when trading shares, certificates or ETFs. In the following, we have summarized for you which fees you should pay attention to when trading on the stock exchange – and thus when choosing your securities account.
Some depot providers charge a fee just for keeping a securities depot. This Custody Fee always occurs whether you trade funds, stocks or warrants or not. Even worse are the so-called Penalty interest (also negative interest), which are incurred when you park money in your clearing account for a short time in order to prepare for the next purchase of securities. For example, customers of Flatex, one of the largest brokers in Germany, have to pay this fee – read more about this here.
Custody Fees are part of the ongoing costs, as are the custody account management fee and negative interest. They are mainly due if you have foreign shares or other securities in your custody account. It is usually a small percentage of the total value of a position in your securities account. The custodial fee is usually payable annually and reduces your returns significantly.
When choosing your custodian bank, you should also take a look at the fees that are incurred when buying and selling securities. These so-called transaction costs you as an investor have to bear it all by yourself. In addition, you should also look at the order commission Pay attention to the fees charged by the bank for carrying out your transactions. Order commission is one of the most important cost factors for investors. You should therefore make absolutely sure that your custody account provider caps the order commission or – this is even better – charges a flat rate regardless of the order volume.
Many more fees, like Trading Venue Fees or brokerage fee, you as an investor can only influence it to a limited extent. Whether these fees are incurred and how high they are depends less on your securities account and more on the stock exchange on which you trade and the financial product. The brokerage fee, by the way, is the difference between the bid price and the ask price, too Bid-ask spread called. The bid price is the highest price a security buyer is willing to pay for a stock. The ask price is the price that a seller wants his security to be.
Tip: Under certain circumstances, you can save yourself the trading venue fee completely. Many Internet banks and online brokers offer fee-free over-the-counter direct trading.
Also consider the Costs of partial executions an order. Partial executions can sometimes occur when an order placed by the investor cannot be fully executed in a single transaction, for example because the offer does not exist in the market.
Our recommendation: Avoid a provider who charges custody account fees or even negative interest. These costs are avoidable and unnecessarily jeopardize the success of your investment. Also choose a provider who does not charge any order commission, such as finanzen.net zero1.