Through eToro, Australian users can buy and sell a range of assets including stocks, ETFs, commodities, FX trading and crypto assets. In fact, there are now 6,000 assets to choose from on the platform.
Since August 11, a commission fee of $US2 may apply when you open and when you close a stock position (if you are resident in Australia and trade on the ASX). Positions opened before August 11th, 2024, will not incur a commission fee at close.
There are a number of other fees you will need to pay, including a conversion fee when depositing and withdrawing in non-US dollars.
As with other investment platforms, eToro has built-in a range of educational resources, but users can also learn from one another through a news feed and a range of social features. Let’s take a closer look at some of the platform’s key features.
Pros
- User friendly
- Multiple asset class investing, including crypto
- Social and educational features
- Low commissions on stock trading
Cons
- Currency conversion fees from AUD to USD.
- Inactivity fees kick in after 12 months
- Withdrawal fees apply
- Can only withdraw crypto to the eToro wallet
Table of Contents
Who should choose eToro?
If you’re new to investing, eToro could be a good point of entry. The platform is user-friendly, easy to navigate, and available through a browser or mobile app.
eToro lets users invest in a selection of stocks and shares, but if you don’t feel confident picking out your own portfolio you can choose to copy the trades of the most successful investors, as part of a platform feature known as ‘copy trader’. if you wish to copy another trader, you can make use of the ‘Editor’s Choice’ section which highlights the movements of popular investors. You can copy trade from as little as $200. Popular investors are also rewarded, with each investor financially remunerated according to how many ‘copiers’ they have. You can read more in our list of the best traders to copy on eToro to get you started.
In fact, the social component of eToro is one of its main selling points. Because of the size of eToro, you can leverage the insights from a community of fellow traders, at various levels of experience, through the dedicated news feed. You’ll need to understand investment terminology to get the most out of these features. But since eToro has its own education resources, you could quickly get up to speed.
eToro is also a cost-effective starting point, since you won’t be charged any commission or deposit fees on the ETFs you trade, and stocks only incur a $US2 fee when opening and closing a trade. Rather than relying on income from high commissions, eToro makes its money through charges like its flat ($5) withdrawal fee, inactivity fees, currency conversion fees, and crypto investing fees. These can take new investors by surprise so make sure you read eToro’s fee page, which discloses all of the various spreads and fees incurred for different actions.
eToro Offerings and Features
As a multi-asset investing platform, eToro gives users the option to invest in crypto assets, stocks and ETFs all in one place, as well as offering a few extra functions.
Traditional Investments
eToro offers access to 19 global indices, more than 3,000 stocks, 49 currencies, and 264 ETFs. You can choose your own collection of assets or choose to invest in a ready-made ‘Smart Portfolio’.
Starting August 11, 2024, a commission fee of $US2 may apply when you open and when you close a stock position (if you are resident in Australia and trade on the Australia Stock Exchange). Positions opened before August 11th, 2024, will not incur a commission fee at close.
While brokerage fees on stocks are low, there are currency conversion fees to be aware of. In Australia, Diamond members are exempt from FX conversion fees, whereas Platinum and Platinum+ members receive a 50% discount. There is a fixed $5 fee for withdrawals and a $10 monthly inactivity fee after 12 months of no trading activity.
Invest in Crypto Assets
The eToro platform lets users buy and sell more than 100 crypto assets, including:
For more seasoned investors, eToro also allows users to trade crypto CFDs and engage in crypto staking to earn rewards. There is also a dedicated eToro Crypto platform with an integrated wallet.
Smart Portfolios
Through Smart Portfolios, users can invest in a pre-selected collection of assets that aim to diversify their holdings.
Some portfolios focus on a specific theme. These can be industries such as technology or crypto, and others are composed with a type of investment strategy in mind.
Social Investing Community
As mentioned above, eToro lets investors connect with one another through a social media-like news feed, where news and strategies are discussed. Regular blogs and personalised alerts are another way users can keep track of the market. You can create your own profile and share your insights, or, if you prefer anonymity, you can set up a private profile. Popular investors who gather a following of copytraders can get paid up to 1.5% of the value of assets under copy, which can be a fantastic way to earn additional income if you are a profitable trader.
Education
Anyone, even those who aren’t users, can visit eToro and gain access to lessons on investment terms, interpreting the markets, and different types of assets through the eToro Academy. Topics range in complexity from beginner to expert level.
When you first join and create an account with eToro, you can access a ‘practice account’ that allows you to invest a virtual fund of $100,000 so you can get to grips with the platform before real money changes hands.
eToro club
eToro users who have made at least $5000 profit from sold assets can join the eToro Club at the silver level, which grants perks including personalised investment guidance and free webinars. You will also be automatically admitted to the additional tiers provided you meet the equity requirement:
Silver: $5000
Gold: $10,000
Platinum: $25,000
Platinum+: $50,000
Diamond: $250,000
Mobile apps
It’s possible to invest from an Android or iOS device with eToro’s investing app. If you purchase crypto assets through the platform, there’s also the eToro Money wallet app, which allows you to store or transfer your coins.
Security
eToro is licensed with ASIC in Australia to offer certain financial products and services, and the platform uses advanced encryption to secure users’ information. You can also select two-factor authentication to log in.
Use award-winning social trading features to connect with over 25 million users worldwide and find top-performing crypto traders to copy with CopyTrader
eToro Commissions and Fees
Starting August 11, 2024, a commission fee of $US2 may apply when you open and when you close a stock position (if you are resident in Australia and trade on the ASX). Positions opened before August 11th, 2024, will not incur a commission fee at close.
Investors need to be aware of a range of fees, including foreign conversion fees, when you transfer Australian dollars into the base currency of US dollars. These differ depending on your payment method, so do your homework first. Investing in crypto assets incurs a fixed fee of 1%, whether you’re buying or selling and there is a $5 withdrawal fee.
This article is not an endorsement of any particular cryptocurrency, broker or exchange nor does it constitute a recommendation of cryptocurrency or CFDs as an investment class. Cryptocurrency is unregulated in Australia and your capital is at risk. Trading in contracts for difference (CFDs) is riskier than conventional share trading, not suitable for the majority of investors, and includes the potential for partial or total loss of capital. You should always consider whether you can afford to lose your money before deciding to trade in CFDs or cryptocurrency, and seek advice from an authorised financial advisor.
Frequently Asked Questions (FAQs)
Can I buy cryptocurrency with eToro?
Yes, you can. You can trade almost 100 of the leading coins, such as bitcoin and Ethereum, and create a customised watch-list for your coins. You can also stake coins on eToro.
Is eToro legit?
Yes, eToro is a legitimate investment platform regulated by ASIC in Australia, which you can read more about here. It offers a range of financial products including stocks, ETFs, commodities, forex and cryptocurrencies. The platform uses advanced security measures to protect user information and funds. While eToro is considered safe and transparent about its fee structure, users should be aware of various fees like currency conversion charges and withdrawal fees.
Can you become a millionaire on eToro?
While it’s possible to make significant profits on eToro, becoming a millionaire is not guaranteed and would be extremely challenging. eToro offers various investment opportunities and features like CopyTrader that could potentially yield high returns. However, substantial gains require a combination of significant initial capital, expert knowledge, successful trading strategies and favourable market conditions. As with all investing, there are inherent risks, and users should invest responsibly.
Can I take my crypto out of eToro?
You can only withdraw your crypto from the eToro platform to the eToro Money crypto wallet. To withdraw funds entirely from the eToro platform, you must first close out your cryptocurrency positions into fiat currency, and then withdraw the funds into an accepted bank account.
What would happen to my money if eToro shuts down?
As eToro only acts as an intermediary, your assets are held with external custodial partners. This means that if eToro went bust, you would have a claim on these assets, as they still belong to you, and creditors would be unable to access them.
Is eToro Australian?
eToro was founded in Israel in 2007 and is available in multiple countries worldwide, including Australia. eToro is regulated by the Australian Securities and Investments Commission (ASIC) to ensure compliance and to help keep Australian users safe.
Can you really make money on eToro?
Yes, you can potentially make money on eToro. The platform allows users to buy and sell a variety of assets, including stocks, ETFs, commodities, FX trading, and cryptocurrencies. There are various mechanisms through which you can make money.
One of the more popular features of eToro is its social trading feature, which allows users to copy the trades of successful investors. By doing so, users can potentially earn profits based on the strategies of experienced investors. It’s also possible to earn money by gathering a following of “CopyTraders”; popular investors can get paid up to 1.5% of the value of assets under copy. However, it’s important to note that investing always carries risks, and profits are not guaranteed.
What is the downside to eToro?
The main downsides of eToro include currency conversion fees for non-USD transactions, inactivity fees after 12 months of no trading, withdrawal fees, and the requirement to use the eToro wallet for cryptocurrency withdrawals.
While eToro offers zero commission on ETF trading, users should be aware of these additional costs.
Is eToro safe for beginners?
Yes, eToro is generally considered safe for beginners. The platform is user-friendly and offers a range of educational resources to help new investors understand the basics of trading and investment. Beginners can start by using a ‘practice account’ that allows them to trade with a virtual fund, providing a safe way to understand the platform and learn trading strategies without risking real money.
Additionally, eToro is licensed with regulatory authorities like ASIC in Australia and uses robust security measures to protect users’ information. However, like any investment platform, it’s important for beginners to conduct their own research, understand the potential risks involved, and possibly seek advice from financial advisors if necessary.
Does eToro have hidden fees?
eToro is very transparent about its fees, however, as with any trading platform, it is crucial to understand the fee structure before getting started.
Starting August 11, 2024, a commission fee of $US2 may apply when you open and when you close a stock position (if you are resident in Australia and trade on the ASX).
Positions opened before August 11th, 2024, will not incur a commission fee at close.
Here is a basic breakdown of eToro’s other fees:
- Currency Conversion Fees: If you deal with currencies other than USD for deposits and withdrawals, eToro applies a currency conversion fee. This varies depending on the currency in question.
- Spreads: The spread is essentially the difference between the buy and sell price of an asset on eToro. This varies depending on the asset you’re trading.
- Overnight Fees: For those holding ‘Contract for Differences’ (CFDs) positions overnight, eToro charges an overnight fee. This is a common practice in CFD trading.
- Withdrawal Fees: There’s a flat US$5 fee for withdrawals. This is relatively straightforward and applies regardless of the withdrawal amount.
- Inactivity Fees: Not using your eToro account for over a year? A monthly inactivity fee of US$10 is charged.
- Crypto Trading Fees: For trading cryptocurrencies, eToro applies a flat 1% fee on both buy and sell actions.
While eToro has several types of fees, they are not hidden. They are part of the platform’s trading structure and are clearly outlined on their website. As with any trading platform, it’s advisable to familiarise yourself with these fees to manage your trading budget effectively.
Does eToro have an inactivity fee?
Yes, eToro does have an inactivity fee. If an account remains inactive, meaning you have not logged in for a period of 12 months, eToro charges a monthly inactivity fee of US$10. This fee is deducted from the available balance in your account. If you are an eToro user, it’s important to be aware of this, especially if you plan to take a break from trading or investing on the platform. Regular account activity can avoid this fee.
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