So, a friend or a colleague told you about a new trading platform they just made a bunch of money on, and you want to get in on the action. It’s natural to feel apprehensive or nervous about trying new services, especially one that has all your personal and financial details and uses real money. How can you know which apps to trust and which apps risk leaking your information or taking your money?

Lucky for you we looked into eToro’s security and compared it to other similar apps to see how it stacks up. Can you feel safe while using eToro? Is your money secure? What risks are involved and what features have they implemented to protect you and your investments? Here is everything you need to know about this new online digital trading platform to answer the question: is eToro safe to use?

What is eToro?

eToro is a digital-first online trading platform that focuses on attracting new and younger traders. Its clean and simple design, host of educational and helpful resources, zero-commission trades, and streamlined interface have made it a very attractive option for those who are intimidated by the large and expensive trading firms. You can see how easy it is to trade stock with our guide here.

EToro is a private company based in Israel. It has grown quickly since its founding in 2007 under the name RetailFX and the release of its social investing platform in 2010.

In addition to zero-commission trades, eToro also offers a full ecosystem of online finance tools. These include trading in cryptocurrency, crypto wallets, an options trading app, and other financial incentives. Learn about the eToro Wallet and see how it works here.

eToro also offers a unique feature known as Social Trading, which allows users to follow the trading activity of other users in real time and collaborate and compare trades with other users. You can also copy the trades of other high-profile traders if you have a favorite financial personality you want to imitate.

Whether you are a long-time professional trader or just getting into trading, eToro offers a wide range of features, products, and services that make it an attractive alternative to traditional trading platforms. Since most basic features are free, there really is no barrier to giving it a test drive, especially since eToro offers a free $100,000 test account for all users.

What Safety Features Does eToro have?

In order to operate in the United States and many other countries, eToro must meet several financial expectations and operate under certain federal and financial regulations. Additionally, any funds managed by eToro are deposited in insured banks and are insured in the unlikely event that eToro becomes insolvent. Regular audits and app updates keep security up-to-date.

If users notice any unusual activity on the account, they can choose to freeze their account until the issue is resolved.

eToro users can also choose to activate Two-Factor Authentication for their account.

Keep in mind that no amount of security or safety features will be able to protect you from yourself. Your account is only as safe as you are with your account information, and any losses from bad investments or poor money management strategies are not protected. Always invest only the amount of money you are willing to lose entirely.

Always practice good internet safety guidelines when dealing with eToro or any other financial website. Protect your login information, be extremely cautious when using public computers or networks, and so on.

Finally, markets are always subject to manipulation and people are always the target of elaborate scams. Cryptocurrencies are especially hot targets these days, so always do your research before investing. Cryptocurrency markets and crypto wallet apps differ in their security and features, so you should familiarize yourself with them before you use them. See the differences between eToro and Coinbase (NASDAQ:COIN).

Is eToro Safe to Use?

There are two ways to answer this question.

Does eToro protect your money from malicious actors, scams, and bankruptcy? Yes.

Is eToro the safest app to use to make money and reliably invest? It depends.

There is only so much security any app or service can implement before it begins to degrade the user’s experience. The discussion around the balance between security and usability is too extensive for us to explore in this article, but that balance is different depending on the user and the company. For some, the balance of security to usability is perfect in eToro, for others, it is too much, and for some, it is too little.

eToro has implemented many of the common safeguards and protections found in other financial apps and trading platforms. This includes prudent management of users’ funds, end-to-end encryption of all communication and transactions, and all security required by federal bodies like the Financial Crimes Enforcement Network and the Financial Industry Regulatory Authority in the United States. It also is regulated by the Financial Conduct Authority in the United Kingdom, the Cyprus Securities and Exchange Commission in Cyprus, and the Australian Securities and Investments Commission.

In this way, your money is as safe as it possibly could be without ruining the user experience. This security is comparable to other digital-first trading platforms and cryptocurrency management apps.

According to online reviewers, eToro is generally considered safe and secure. Reviewers and financial experts all have different questions to measure the security of an institution, but they usually include some or all of the following:

Does the company offer protection for investors and their funds? If so, how much and in what form is the protection offered? Are there any financial protections beyond those required by federal law? Does the company provide Two-Factor Authentication? Is the company listed on a public exchange? If not, why? Does the company release reliable and transparent financial results?

Overall, the answers to these questions are positive in favor of eToro, leading many reviewers to call it a safe option for money management and investments.

However, whether or not eToro is the safest choice to begin your investment career depends a lot on your financial goals, investment aspirations, and more.

eToro is not available in every country, and it does not operate in every U.S. state. If you are planning on moving in the near future, or move around often, you might lose access to your funds and your investments. eToro is not a broker, as it does not hold or sell any stocks itself, and any funds are not kept by eToro.

eToro offers a much more limited selection of stocks, cryptocurrencies, and other investment options than other platforms or more specialized apps and services. The difference in fees, account charges, and other requirements might make you feel trapped if you regret your decision later. We recommend you research each platform in depth, looking beyond the surface security, to decide which one will serve you better long-term.

If you are curious about any other part of eToro’s products and services, check out this page: a regularly updated list of all our eToro guides, news coverage, and lists of benefits. 

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