eToro are well known for their commission free trades so how do they make money?
Simple, eToro fees apply to these other types of investments and trading products.
Some of them are cheap. Others not so much. We’ve broken down all the major costs so that you know exactly what you are paying.
There are a lot of them and even different types of the same asset can have different costs attached to them.
How much you pay is going to depend on what assets you choose and how you actually trade that asset.
The bottom line is eToro’s fees certainly aren’t the most expensive out there, but equally they aren’t the cheapest either. (except for their stocks, index funds and ETFs which are commission free!).
About eToro
eToro is a social trading and multi-asset brokerage company. They have registered offices in the UK, Cyprus and Israel.
With eToro you can trade manually, like with all traditional stock brokers. However, eToro also offers social trading.
Social trading enables you to follow the trades of others. Essentially, you use eToro’s CopyTrader function to copy everything the trader you are copying does as they do it.
If they use 5% of their money to buy Apple stock, so will you. If they sell Google short with 2% of their money, so will you.
If you find the right trader to follow, it’s a bit like investing in a hedge fund, but without the high fees.
eToro also has CopyPortfolios which are more automated. Rather than copying another trader, you follow an algorithm.
This lets you automatically follow a predetermined market strategy without having to lift a finger.
Of course, the social aspect is there for those who want it. It isn’t compulsory by any means. Lots of people simply use eToro to trade and invest in the traditional way.
Whatever floats your boat.
Even after that explanation, social trading and copy portfolios aren’t the easiest thing to understand. That is until you try them for yourself.
If you are interested there’s an eToro demo account so you can try everything before you risk any of your own money.
Reviews
Before you get to grips with the fees, it’s probably worth asking is eToro good for trading and investing? From nearly 15,000 eToro Trust Pilot reviews, eToro achieves a great score so they must be doing something right.
Skimming through a selection of the comments it looks like users think the platform is easy to use, and the CopyTrader function looks like it is very popular.
The main complaints refer to eToro withdrawal fees and customer service. However, personally I’ve never had a problem with either of those. Yes, there’s a withdrawal fee, but its pretty low (see below). My guess is, it used to be higher before.
As for the customer service, they’ve always replied to my questions quickly and given me detailed answers, but there is one issue which I think people who use eToro before probably have.
Due to an mass influx of new clients they have limited the live chat eToro service to club members (clients with over $5000 dollars in their accounts). So if you were used to using live chat to instantly deal with your complaints having to wait for few hours or a day for an email response might be a little annoying.
That said, anybody who invests more than $4K (£3.2K) gets access to live chat anyway.
Withdrawal fee
When you take your money out of eToro there is a withdrawal fee of $5.
So I’m sure it goes without saying that the more you withdraw in one go the better for your wallet.
If I withdraw $50 dollars a month for 10 months it would cost me an additional $50 in withdrawal fees. However, if I withdrew $500 in one go it would only cost me $5.
How much is the spread?
When you buy or sell on eToro there is usually a spread.
The spread is the difference between the buy price and the sell price. The difference between the two is a way for stock brokers to make money.
Spreads are usually shown as a percentage or in PIPs.
PIP means percentage in point, which is the smallest price change that a given exchange rate can make. It refers to the very last digit in price.
Typically, a pip is equivalent to one hundredth of a percent, or the fourth decimal place (0.0001). There is the odd exception such as the Japanese Yen, where the PIP is the second digit after the decimal point but generally when we are talking about PIPs we are talking about one PIP being 0.0001.
So if we were talking dollars that would be $0.0001.
There’s a PIP calculator here if you want to calculate the cost of your trades in terms of PIPs, but many of eToros spreads are shown in terms of percentages, which are quite easy to work with.
For example, Bitcoin has a spread of 0.75%.
That means if Bitcoin costs $8000 per coin and you want to buy $1000 worth you can calculate the spread as follows:
First of all you work out how much Bitcoin you are buying so $1000/$8000 gives you 0.125.
You then multiply this value by the spread and then by the price of Bitcoin like this:
$8000 x 0.1225 x 0.75% = $7.5
There are too many different assets with different spreads to list here. The range of spreads on eToro assets are shown on the table below: (If you want to see the actual spread of a particular asset just go to the home page here and then choose Trading / Fees / CFDs and then scroll down to Spreads and then choose the actual asset you want to trade (76% of retail investor accounts lose money when trading CFDs with this provider).
| Asset | Spread |
| Currencies | 1 to 50 PIPs |
| Commodities | 2 to 20000 PIPs |
| Indicies | 100 to1200 PIPs |
| Stocks | 0.09% |
| Cryptocurrencies | 0.75% – 4.5% |
On eToro the prices of trading Cryptocurrencies and CFDs are given as spreads, so at this point it is probably worth going over what a CFD actually is.
What is a CFD?
CFD stands for Contract for Difference, which is a contract between two parties that requires a buyer to pay a seller the difference between the current value of an asset and that asset’s value when the contract is up.
Essentially you take a bet on price movement either up or down.
The main advantage of CFDs are the fact that you can usually trade an asset with less money that you would need to buy the actual real asset.
For example, say Alphabet (Google) stock costs $2000 to buy one share, but you could buy an Alphabet CFD for $25, you can trade for a lot less money with a CFD.
CFDs also make it a lot easier to go short or use leverage.
If you use eToro what is leverage is one of the first questions you need to be answering and basically it means borrowing money to juice your investments. (We’ve gone into a lot more detail here if you are interested)
Of course this could be a big negative too if you don’t know what you are doing. Many people have been ruined by getting themselves into too much debt using leverage.
And another disadvantage of CFDs are overnight fees, which we will come to next.
(On eToro how to sell CFDs through to topics like Negative Balance Protection are all covered here)
How much are overnight fees?
Platforms that allow you to trade CFDs usually have overnight fees.
This means a position that stays open overnight will incur an overnight fee.
Just to be clear, if you buy (go long) stocks or ETFs there won’t be an overnight fee. However, if you sell a stock short or use leverage the trade would be executed as a CFD, which would incur an overnight fee.
Just like with spreads, there are too many different assets with different overnight fees to list here. If you want to see the actual overnight fee of a particular asset just go to the home page here and then choose Trading / Fees / CFDs and then scroll down to overnight fees and choose the actual asset you want to trade (76% of retail investor accounts lose money when trading CFDs with this provider).
But as an example eToro fees for an overnight sell position of a stock are calculated like this:
Annual interest of 2.9% + 1 month LIBOR*, divided by 365 and multiplied by the opening sell price.
*you can read about LIBOR here.
So if you want to buy 10 units of Apple stock priced at $200 dollars per unit and LIBOR was 1.55% you’d calculate your overnight fees as follows:
(1.55%+2.9%) / 365 x $200 x 10 = $0.24/day
But don’t fret about calculating overnight fees. When you trade on eToro a pop up box opens showing the overnight fee at the bottom of the box. See the pic below. The last line of text under the set order button.
Inactivity fee UK & overseas
This is what eToro say about the inactivity fee:
After 12 months with no login activity, a $10 monthly inactivity fee will be charged on any remaining balance. No open positions will be closed to cover the fee.
eToro
(At the time of writing that’s a £7.68 eToro inactivity fee UK)
So I interpret that to mean as long as you log in at least once per year you won’t pay this fee.
But if you can’t even manage to log in just once per year, eToro will subtract $10 from your remaining cash balance every month until you don’t have any cash. However, they won’t close your positions i.e. sell your investments to pay this if you don’t have any cash left.
Essentially, this means the money you’ve actually got invested won’t be touched. It also means if you plan on not logging in for a over a year, it would be in your interests to make sure as much of your cash balance is invested as possible!
Deposit fees
The deposit fee is free of charge on eToro.
That said, there is a currency conversion fee if you deposit in any currency other than US dollars because eToro is a dollar denominated platform. (We will cover conversion fees later in this article).
Mminimum withdrawal amount
The minimum withdrawal amount is $30.
If you have less than this in your account it will be stuck on the platform.
Minimum deposit amount
As already mentioned eToro does have a demo account so you don’t actually need to add money to try out the platform.
The minimum deposit comes into play when you decide you want to invest or trade real money.
It depends on three factors:
- What deposit method you are using (bank transfer, Paypal etc).
- Whether or not it is your first deposit.
- Where you live (not your nationality).
If you deposit via a bank transfer you need to deposit at least $500. But, it is as low as $50 using other methods.
The minimum deposit in eToro is usually $200 the first time you add money to your account. However, there are exceptions and these are shown in the table below. After your first deposit the minimum drops to $50.
| Where you live | eToro Minimum first deposit amount: |
| USA | $50 |
| Argentina, Azerbaijan, Bahrain, Bolivia, Bulgaria, Cayman Islands, Colombia, Costa Rica, Croatia, Dominican Republic, Ecuador, Egypt, Estonia, French Polynesia, Georgia, Gibraltar, Greece, Guernsey, Hungary, Iceland, India, Isle Of Man, Jersey Island, Jordan, Kazakhstan, Kenya, Kuwait, Latvia, Lithuania, Luxembourg, Malta, Morocco, New Zealand, Oman, Palestinian Territory, Peru, Qatar, Reunion Island, Russia, Saudi Arabia, Senegal, Slovakia, Slovenia, South Korea, Taiwan, Ukraine, Uruguay | $1,000 |
| Algeria | $5,000 |
| Israel | $10,000 |
Corporate accounts require $10,000 as a minimum for first time deposits.
Crypto fees
eToro charges spreads on cryptocurrency fees (explained earlier in this article).
These vary depending on the cryptocurrency in question. See below:
| Cryptocurrency | Spread |
| BTC Bitcoin | 0.75% |
| ETHEREUM Ethereum | 1.90% |
| BCH Bitcoin Cash | 1.90% |
| XRP Ripple | 2.45% |
| DASH Dash | 2.90% |
| LTC Litecoin | 1.90% |
| ETC Ethereum Classic | 1.90% |
| ADA Cardano | 2.90% |
| MIOTA IOTA | 4.5% |
| XLM Stellar | 2.45% |
| EOS EOS | 2.90% |
| NEO NEO | 1.90% |
| TRX TRON | 3.5% |
| ZEC ZCASH | 3.5% |
| BNB Binance Coin | 2.45% |
| XTZ Tezos | 5% |
Crypto transfer fees
If you would like to transfer any cryptocurrency you own from the eToro platform to another wallet there will be a small fee which depends on the blockchain in question. See below:
| Cryptocurrency | Minimum Withdrawal Amount You can Make | Fee |
| BTC Bitcoin | 0.008 BTC | 0.0005 BTC |
| ETHEREUM Ethereum | 0.26 ETH | 0.006 ETH |
| XRP Ripple | 25 XRP | 0.25 XRP* |
| LTC Litecoin | 0.68 LTC | 0.001 LTC |
| BCH Bitcoin Cash | 0.18 BCH | 0.001 BCH |
| XLM Stellar | 534 XLM | 0.01 XLM |
Conversion fees?
eToro is a US dollar denominated platform. That means deposits or withdrawals in another currency will have fees attached.
These fees are shown in the table below: (See “How much is the eToro spread” for an explanation of PIPs).
The Conversion fees for Bank transfers, iDEAL, Sofort and Trustly are shown below:
| Currency | Fee |
| AUD | 50 Pips |
| EUR | 50 Pips |
| GBP | 50 Pips |
| SEK | 50 Pips |
| DKK | 50 Pips |
| NOK | 50 Pips |
| PLN | 50 Pips |
| CZK | 50 Pips |
And the conversion fees for Credit Cards, PayPal, Skrill, Neteller, RapidTransfer and Local Online Banking are shown below:
| Currency | Conversion deposit fee | Conversion withdrawal fee |
| AUD | 100 Pips | 50 Pips |
| EUR | 150 Pips | 50 Pips |
| GBP | 50 Pips | 50 Pips |
| MYR | 200 Pips | 200 Pips |
| PHP | 2500 Pips | 2500 Pips |
| THB | 35 Pips | 35 Pips |
| IDR | 150 Pips | 150 Pips |
| VND | 25000 Pips | 25000 Pips |
A couple of points to be aware of.
AUE, EUR, GBP transfer via wire transfer, iDEAL, Sofort and Giroplay is free for Diamond members.
A 50% conversion fee discount is available for eToro Platinum and Platinum + members.
Commission fees for stocks and ETFs
There are no commission fees on stocks or ETFs.
So when you buy (long) stocks and ETFs you don’t pay any commissions whatsoever (Your capital is at risk. Other fees may apply. For more information, visit etoro.com/trading/fees).
This is perhaps the best aspect of eToro. See screenshot below:
CopyTrading fees
You don’t pay anything extra for copying a trader.
eToro makes money from the spread (discussed earlier) which you pay anyway if you buy or sell assets.
CopyPortfolio fees
There are no additional fees levied on CopyPortfolios. As with CopyTrader, eToro makes money from the spread which you would pay anyway whenever you bought or sold an underlying asset.
Commodities fees
eToro charges spreads on commodities and these are shown below:
| Commodity | Fees |
| OIL Oil | 5 Pips |
| GOLD Gold | 45 Pips |
| SILVER Silver | 5 Pips |
| COPPER Copper | 2 Pips |
| NATGAS Natural Gas | 10 Pips |
| PLATINUM Platinum | 35 Pips |
| PALLADIUM Palladium Future Contract | 20000 Pips |
| SUGAR Sugar Future Contract | 8 Pips |
| COCOA Cocoa Future Contract | 650 Pips |
| WHEAT Wheat Future Contract | 100 Pips |
| CottonNo7 Cotton No.7 | 1200 Pips |
| ALUMINUM Aluminum Future Contract | 700 Pips |
| NICKEL Nickel Future Contract | 3200 Pips |
| CL.MAR21 Crude Oil Future March 21 | 5 Pips |
| CL.APR21 Crude Oil Future April 21 | 5 Pips |
| CL.MAY21 Crude Oil Future May 21 | 5 Pips |
eToro Fees – the bottom line
The fees you pay when using eToro vary depending on what asset you trade and how you trade it.
If you bought and sold $1000 of the cryptocurrency Tezos every day for a month it would cost you over $3000 in trading fees, but if you did the same thing with Apple stock it wouldn’t cost you a penny.
It pays to make sure you know what things cost before you trade them, because eToro can be a really cheap platform, but it can also be expensive if you don’t pay attention to what you are doing.
eToro (Europe) Ltd., a Financial Services Company authorised and regulated by the Cyprus Securities Exchange Commission (CySEC) under the license # 109/10. eToro (UK) Ltd. is authorised and regulated by the Financial Conduct Authority (FCA) under the license FRN 583263.
Visit eToro.
eToro is a multi-asset platform that offers investments in stocks and crypto assets as well as trading CFDs. Please note that CFDs are complex instruments and, due to the leverage effect, carry a high risk of losing money quickly. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not an indication of future results. The trading history shown is less than 5 complete years and may not be sufficient as a basis for an investment decision. Copy Trading is a portfolio management service provided by eToro (Europe) Ltd. which is authorized and regulated by the Cyprus Securities and Exchange Commission. Don’t invest in Cryptoassets like Bitcoin unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.