Freedom24 vs Portuguese Broker: Is it Worth Leaving the Bank to Invest?

It’s a common concern for those who already have an account with a Portuguese bank and are considering opening one with a foreign broker solely for investing: “Isn’t it simpler to keep everything in one place?” Simpler, perhaps — but generally more expensive. Let’s compare the two models directly.

How commissions typically work in a Portuguese bank

Most retail banks in Portugal follow a similar model for financial intermediation: a percentage commission on the value of each order (common to see values between 0.25% and 1%), subject to a fixed minimum per transaction — which especially penalizes those investing smaller amounts, as the minimum can represent a significant portion of the buy. Additionally, many cases include an annual custody fee on the portfolio’s value and limited access (or with extra costs) to markets outside Portugal, such as the USA. Exact amounts vary from bank to bank — it’s always worth checking your bank’s updated fee schedule before comparing.

How it works at Freedom24

In Freedom24’s Smart plan, the commission on stocks and ETFs is fixed per share — from €0.02 per share, with a minimum of €2 per order — and there is no custody fee or inactivity fee. This makes the cost structure more predictable and, for those who invest regularly, usually cheaper than a bank’s percentage commission. We have already explained in detail the regulation and security of Freedom24 — regulated by CySEC in Cyprus, with protection up to €20,000 by the Investor Compensation Fund.

What you gain by leaving the bank

• Lower and predictable costs, especially for those who invest small amounts regularly;
• Access to more markets and products — including IPOs and more than 147,000 bonds, something that most Portuguese banks do not offer to retail clients;
• Interest on uninvested balance — money not yet allocated to a position automatically earns interest, unlike most checking accounts.

What you lose (or need to get used to doing differently)

• No physical branch — all support is online or through chat/helpdesk, which might be an adjustment for those who prefer to resolve everything in person;
• Not “all on the same statement” from your main bank — you will manage two separate accounts (which, for tax purposes, means just keeping each statement well stored);
• Initial learning curve — opening an account and understanding the platform takes some time at first (we have already explained the complete process step by step).

And security? Leaving the bank doesn’t mean less protection

A common concern is thinking that only the bank where you already have a checking account is “safe” for investing. In practice, what matters is the regulation of the entity managing your investments, regardless of whether it’s your usual bank. Freedom24 is regulated by CySEC (Cyprus) under MiFID II — the same European directive that regulates Portuguese banks for investment services — with protection up to €20,000 in case of the brokerage’s insolvency.

And taxes? It doesn’t change by being a client of a foreign brokerage

The obligation to declare capital gains, dividends, and interest is the same regardless of where you invest — only the annex changes. Foreign brokers like Freedom24 go on Annex J instead of Annex G, but the rates (28% or inclusion) and discounts for holding periods apply in the same way.

When it might make sense to stay with the bank

If you invest very rarely (once or twice a year), clearly prefer face-to-face support, or only buy specific products from your bank (like savings certificates), the cost difference may not justify the change. But for those who regularly invest in stocks and ETFs — which is the case for most reading this site — the numbers tend to clearly favor a specialized brokerage.

Open an account at Freedom24 →

Educational content, not tax or investment advice. Mentioned commissions may change — always check the current fees of each institution. Investing involves risks, including capital loss.

Educational content, not financial advice. Always compare current conditions before making a decision.