Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

DeGiro - Custody Account or Basic Account

Options
  • 14-02-2017 4:15pm
    #1
    eggerb
    Registered Users Posts: 378 ✭✭


    What is the consensus on how risky the basic (non-custody account) is with DEGIRO? viz. opening a basic account that grants DEGIRO rights to lend your securities. (Basic accounts can be upgraded to to active or trader accounts which have the same 'lending of securities' terms as the basic account.)

    The basic account / active / trader account gives an enhanced product offering including options, futures and other leveraged products.

    There is a fee of 3.00% of dividend (maximum 10.00%) for processing dividends on custody accounts. There is no charge for this on basic, active or trader accounts.
    - Conditions of basic account during sign-up

    DEGIRO offers more possibilities if you give consent to use your Securities. Sufficient collateral is always provided, against a potential position lend out by DEGIRO. Moreover, no more than 30% of your position or your two largest positions will be lent out by DEGIRO.

    As a client you have the following benefits:

    1. You can trade in options, futures and leveraged products and make use of Debit Money. In that case, possibly a part of your position in Securities will serve as collateral and the position can be used by our prime brokers.

    2. You will trade with pricing conditions that are more favourable than the conditions.

    In case you trade (more than 1 transaction per month) or periodically deposit money or withdraw from your portfolio, then the benefits of lending probably outweigh the risk. In case you trade exclusively in Securities for less than 1 time a month and hold a diversified position for the longer term, then it might possibly be better to hold your shares and bonds in a Custody Profile and therefore not to consent with the lending of Securities.

    For an explanation hereof, we recommend you to read the chapter ‘Holding of Financial Instruments’ in the Investment Services. You will find this document on the Document Centre of the Website.


Comments

  • Options
    #2
    Newentrant12
    Registered Users Posts: 17 ✭Newentrant12


    eggerb wrote: »
    What is the consensus on how risky the basic (non-custody account) is with DEGIRO? viz. opening a basic account that grants DEGIRO rights to lend your securities. (Basic accounts can be upgraded to to active or trader accounts which have the same 'lending of securities' terms as the basic account.)

    The basic account / active / trader account gives an enhanced product offering including options, futures and other leveraged products.

    There is a fee of 3.00% of dividend (maximum 10.00%) for processing dividends on custody accounts. There is no charge for this on basic, active or trader accounts.




    Custody versus Non-Custody accounts

    Essentially Beleggersgiro Long Short is the trust that non-custody account assets are placed in and Beleggersgiro Long Only is where custody account assets are placed in – this concerns the right of use of third parties, which are essentially prime brokers which deal with Degiro. Basically if you have a non-custody account your assets are lent out to third parties and if you have a custody account third parties have no right of use over your assets.

    I wrote about this at length on other Degiro threads, you can search for Degiro on here and find a lot of info


Advertisement