As a social trading app specifically dealing with CFD trading, cryptocurrency and Forex, eToro has sustained a growing number of users because of the opportunity it gives to traders to use the money that they deposited on their account by making wise investment decisions.
To learn more about how eToro makes money and how traders can use their funds on the platform and other related money matters, here's everything you need to know.
Wondering where to begin? The very first step is to open an account.
77% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
How Does eToro Make Money?
New users are immediately informed that eToro does not charge commission fees on trades.
However, eToro earns money from non-trading activities such as spread fees, currency conversion fees, crypto currency transfer fees, leveraged trading fees, withdrawal fees and inactivity fees.
Basically speaking: eToro can be categorized as a financial broker that earns in three different ways:
Using the Money in Your Account
As an eToro client, you can use the money you deposited on your account by engaging in CFD trading using the app.
CFD trading is a popular method where a trader engages in a contract with a CFD broker, instead of buying an underlying asset. CFD means "Contract for Difference".
You can engage in CFD trading to trade countless financial instruments such as stocks, indices, cryptocurrencies, forex, commodities and more.
Becoming a good CFD trader to increase your equity through the eToro app requires the following:
- Knowledge – the ability and skill to understand how price gaps operates, overnight charges, big spreads and margin calls just to state a few. To benefit from CFD trading, let it be known that knowledge is the key.
Best advice: Never stop educating yourself about the many dynamics of the CFD market by being aware of emerging techniques and trading strategies.
- Strategizing and Planning – plan your investment carefully by implementing a sound tactic without gambling away your money.
- Practice – take advantage of eToro's practice account using virtual money to hone your skills in CFD trading. This way, you can experience loses at no financial cost while learning from your mistakes.
- Use the CopyTrade feature – if you are not confident enough to do manual trades on your own, you can always seek guidance from the more successful traders using the app by copying their investment strategies and techniques. You can see the profiles of highly successful traders by simply clicking the "Copy People" tab on the left hand menu. In each of their profile, you will see their percentage of return, the number of copiers and profit percentage from the current week.
Virtual Money from the Demo Account
Every user is given a $100,000 virtual money upon creating an account. This virtual money is used for the user's practice account and it is not convertible to a real money.
The virtual money can be used to experiment with different trading strategies in order for you to get used on how the app works and to also hone your skills in managing and investing your funds—until the time you decide to deposit and start an investment using real money.
The virtual money can be used to simulate these trading activities:
- Open positions
- Practice copy trading
- Invest in CopyPortfolios
- Engage in and experiment with Stop Loss, Leverage trading and Take Profit
- Interact with other traders in the eToro community
The Process of Withdrawing Money from the Account
Users can withdraw money from their eToro account any time by simply following these steps:
- Click on "Withdraw Funds" on the menu underneath your profile in the left-hand part.
- Enter the amount to withdraw in USD.
- Fill up the electronic withdrawal form.
- Click "Submit".
Remember: You can only withdraw from your available balance.
Processing Time to Withdraw the Money
Provided you have submitted all required information, eToro processes all money withdrawal requests within 1-2 business days.
However, the estimated time to receive your money may vary depending on the payment method used. Here are some examples:
|Payment Method||Time It Takes to Receive Money|
|Online Banking||1-3 business days|
|China Union Pay||1-2 business days|
|Credit / Debit Card||7-8 business days|
|Neteller||1-3 business days|
|Skrill||1-3 business days|
|PayPal||1-2 business days|
|Wire Transfer||Up to 8 business days|
Fee to Take Out the Money
eToro charges a withdrawal fee of $5. This a flat fee for every withdrawal regardless of the amount of money that you will take out from your account. That means you will be charged with just $5 even if you withdraw the minimum which is $30 or if you decide to take a huge amount like $10000.
Is There a Minimum Withdrawal Amount?
Yes, there is a $30 minimum withdrawal amount. This is the lowest value that you can take out from your account for every withdrawal transaction.
You decided to withdraw today. You can take out $30 or more for this transaction. If you decide to make another withdrawal request the next day, eToro's withdrawal screen will only accept $30 or a higher amount.
Cancelling the Withdrawal of Money
Please note: Once your withdrawal request is already under the status of "In Process", you cannot cancel your withdrawal request anymore.
If your withdrawal request is not yet under this specific status, then you can still easily cancel the withdrawal transaction by clicking on the "Withdraw Funds" tab and clicking the "Click Here" button on the pop-up window.
After that, you will be taken to a screen showing your withdrawal history. Click on the "Reverse" button that appears next to your withdrawal request, to cancel it.
The Ultimate Question: Is My Money Safe?
Yes. As stated above, eToro operates in accordance with all the rules and regulations set by the ASIC, CySEC and FCA regulation boards. This means, measures are enacted in order to ensure the protection of the money of the investors/users.
eToro safeguards its users' fund in top-tier banks and all personal data are secured by SSL encryption.
So Can eToro Run Away With Your Money?
No, they can’t. As a licensed broker, eToro is covered by all global financial laws and regulations. They don’t have the capability and power to just take your money away.
eToro is well regulated and operates in accordance with the CySEC (Cyprus Securities and Exchange Commission), ASIC (Australian Securities and Investments Commission) and FCA (Financial Conduct Authority).
Allocating Your Funds with CopyTrader
Alternatively, you can also trade by using the CopyTrader feature of the app. This shall allow you to imitate the proven and successful strategies of the top-performing traders using the eToro app.
Do take note that their past performance does not guarantee that you will make gains from copying their future Buy or Sell positions.
Who are these people?
These are traders who have extensive experience in CFD trading. While there is always a risk when it comes to CFD trading, the odds of placing a good Buy or Sell position from copying from these successful traders is higher than making doing a trade on your own.
Another way of benefitting with eToro is to work your way to becoming a popular trader. If this happens, you become the trader most eToro users will want to copy. This program of eToro is called the "Popular Investor".
Simply say: "Get copied, get paid"
Payments to Popular Investors can go as much as 2.5% of their total AUM (Assets Under Management) annually. These additional remunerations are on top of their own personal investments.
Does Using eToro Bring in Easy Money?
No. Like with other means of lawful way of increasing one's equity, using eToro does not guarantee easy profits. While CFD trading is a highly recommended method of investing money, it also comes with a risk. A number of retail investor has had experiences of losing money when trading CFDs. You should always consider the risk of losing money when engaging in CFD trading.
The Highest Equity You Can Generate
There are no minimums nor a ceiling on how much you can increase your equity from using the eToro trading app.
Bottom line: As long as you’re making all the right moves and trading decisions, you will reap what you sow.
Successful eToro Traders
If you want to know some of the most successful traders on eToro, just look at their profiles on the Copy Trade feature of the app.
Apart from them, many traders continue using the app because they have experienced increasing their capital from trading. Coming with the risks of CFD trading is also the opportunity to benefit from wise investment strategies.
Money Laundering: A Big NO
Is money laundering possible?
No. eToro implements anti-money laundering financing policies set by world financial regulators and imposes a strict user verification process that is follows the KYC (Know Your Customer) and AML (Anti-Money Laundering) guidelines.
Money Deposit by Bank Transfer
Depositing money on your eToro account is simple and only takes these few steps:
- Click on the blue box labeled "Deposit Funds" at the lower left-hand of your menu.
- Fill up the amount you want to deposit and set its currency on the drop-down menu.
- Select "Bank Transfer" from the drop-down menu below it.
- Click "Continue". The bank transfer details will show on the screen and a copy will be sent to your email.
- Log in to your bank's online app or website.
- Key in the transaction ID and your username.
- Finish the transaction.
- Open a new ticket at eToro's Customer Service Center page and send the screenshot of the payment confirmation.
The "eToro Money" Wallet
eToro has a cryptocurrency wallet service which was initially launched as "eToro Money". This can be used by every active user to buy and sell cryptoassets, transfer or convert them from one cryptocurrency to another. This app is now labelled as "eToro Wallet".
Ready to trade with eToro? The first step is to open an account.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 77% 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. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
Copy Trading does not amount to investment advice. The value of your investments may go up or down. Your capital is at risk.
Cryptoasset investing is highly volatile and unregulated in some EU countries. No consumer protection. Tax on profits may apply.
eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.