Depot
A securities account (also known as a custody account) is an account used for the custody and trading of securities. Investors who wish to trade securities can open a securities account with banks or other financial service providers, such as online brokers. Just as a current account is intended for holding and transacting money, a securities account is designed for holding and transacting securities, such as shares and ETFs. For investors who invest via a robo-advisor, it is not necessary to open an account themselves, as robo-advisors like Ginmon open an account for the client as part of the registration process.
What is a clearing account?
Depositing money into a clearing account associated with a securities account records the inflows and outflows of funds. Since a securities account only facilitates and stores transactions with securities, a clearing account is required for the storage and transaction of money.
This is opened in the course of opening the securities account and must generally be balanced. If an investor wants to buy an Exchange-Traded Fund (ETF), for example, they must first transfer money to their clearing account with their custodian bank.
If the investor is a client of a robo-advisor, as is often the case with Ginmon, it is often possible to make deposits via direct debit as well. This allows for a significantly higher level of convenience.
Once the money has arrived in the clearing account, it can be used to buy securities. For this purpose, orders to buy a specific security can be placed via the broker or the bank.
If the investor is a Ginmon client, the money is automatically invested via the intelligent portfolio technology apeiron® after receipt of payment on the clearing account.
In contrast to the assets in the clearing account, the shares, ETFs, funds, etc. held in the securities account are so-called special assets (Sondervermögen).
As a result, in the unlikely event of insolvency, these assets are not affected but can simply be transferred to another bank / another broker. However, assets on clearing accounts are also protected up to 100,000 euros by the deposit guarantee scheme, and often beyond.
How much does a securities account cost?
In principle, a distinction must be made between two types of fees: on the one hand, transactions ("orders") of securities incur fees. On the other hand, some providers charge securities account management fees.
The transaction costs for an exemplary transaction of 2000 euros usually amount to around 0.25% – 0.5% of the transaction volume. Securities account management fees usually vary between 0 and 15 euros per month.
In addition to these fees, buying and selling securities also incurs costs for the bid-ask-spread ("spread"). This is the difference between the buying and selling price.
Some securities, such as mutual funds, also charge a management fee. With the robo-advisor Ginmon, however, custody and transaction fees are already included in the all-inclusive service fee.
What should I consider when choosing a securities account?
Private investors who are looking for a suitable securities account should consider a few things. The most important criteria for this are: tradeable securities, fees, available trading venues, service and hidden costs.
Criterion 1: Tradeable securities
Anyone looking for a suitable securities account should definitely make sure that the entire or desired investment universe is tradeable there. To do this, check, for example, how large the selection of shares, ETFs and funds is with the custody account providers. There are providers that, for example, only offer a few, selected ETFs. This can be a disadvantage, as a desired financial product may not be tradeable and a different, poorer product has to be used instead.
Criterion 2: Fees
The fees of a securities account are certainly one of the most important aspects of a good securities account. Observe closely how high the fixed fees for the account (account fees) are. Furthermore, you should keep an eye on the order fees. Here, particular attention must be paid to variable and fixed cost components.
Criterion 3: Available trading venues
This is an often underestimated quality criterion of a good custody account provider. If only a few trading venues or even only one is available, this can cost the investor real money in the worst-case scenario. When trading securities, there is always a spread. On trading venues where the trading volume is low, this spread can quickly become wide and thus drive up transaction costs. Therefore, make sure that you have enough trading venues available to you.
Criterion 4: Customer service
Watch out! You should take a closer look at low-cost custody account providers. Inform yourself about the service quality, for example by reading reviews from other customers. If you as an investor have questions or problems, it is important that you can quickly reach a competent customer service.
Criterion 5: Hidden costs
To discover hidden fees of custody account providers, a look at the provider's list of prices and services usually helps. It should be noted that a good securities account should not have any such hidden fees. This refers to costs for changing and deleting orders or limits, costs for attending annual general meetings or even postage costs.