Best CFD brokers in Australia in 2020

To find the best CFD broker in Australia for 2020, we went ahead and did the research for you. After testing, analyzing and comparing 59 brokers, 5 made it to the top in Australia. We tell you the list, you pick your winner. And now, without further ado...

The top 5 picks for the best CFD brokers of 2020 for citizens in Australia:

1. City Index is the best CFD broker in Australia in 2020. Low fees for forex and index CFDs. Fast and smooth account opening. Diverse research tools.
2. eToro is number two. Free stock and ETF trading in the EU. Seamless account opening. Social trading experience.
3. IG is third. First-class web trading platform. Superb educational tools. Great deposit and withdrawal options.
4. XM, at place four. Low CFD and withdrawal fees. Easy and fast account opening. Great educational tools.
5. Number five is Plus500. Easy-to-use platform. Low trading fees. Listed on the London Stock Exchange.

What makes a good CFD broker? First of all, they need to offer fair fees and have a good safety score. It must also be easy to open an account and deposit money. They should give access to many products and need to have a great platform.

Easy to list, but hard to figure it out. We are testing brokers more than 100 criteria with real accounts and real money. We know what's up. You can find all the ranking criteria in our methodology.

Boring, but important stuff: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money. If you don't have a clue what a CFD is, start by reading more about CFD trading.

Not sure which broker? For a tailored recommendation, check out the broker finder tool. You can enter your country and it will show only the relevant brokers. Want more details? Compare brokers with this detailed comparison table.

And now, let's see the best CFD brokers for Australian citizens in 2020 one by one. Starting with the winner, City Index.

City Index was founded in 1983 and it is a global CFD and FX broker. City Index is the brand name of GAIN Capital, which is listed on the New York Stock Exchange. The company is regulated by top-tier financial authorities, such as the Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC) or Monetary Authority of Singapore (MAS). 

City Index is considered safe because it has a long track record, is regulated by top-tier financial authorities, and its parent company is listed on a stock exchange.

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% 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.

Recommended for forex and cfd traders looking for low forex fees and great research tools

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71% of retail CFD accounts lose money

#1 City Index
Fees

4.1

City Index has low fees for forex and stock index CFDs. On the other hand, stock CFD fees are high and there is an inactivity fee.

All spreads, commissions and financing rate for opening a position, holding for a week, and closing.

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71% of retail CFD accounts lose money

#1 City Index
Account opening

5.0

City Index account opening is fully digital and there is no minimum deposit. It took us one day to have an approved open account.

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71% of retail CFD accounts lose money

#1 City Index
Deposit and withdrawal

4.0

City Index provides multiple options for deposit and withdrawal and they are free of charge. However, the withdrawal with some credit cards is not possible.

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71% of retail CFD accounts lose money

#1 City Index
Markets and products

2.1

At City Index, you can only trade with CFDs, forex, and cryptos. Unfortunately, real stocks, bonds and ETFs are not available.

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71% of retail CFD accounts lose money

#1 City Index
Web trading platform

4.3

City Index's web trading platform is user-friendly and extremely customizable. It has also a lot of order types. On the flip side, there is no two-step login.

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71% of retail CFD accounts lose money

#1 City Index
Verdict

City Index is a great CFD and forex broker regulated by top-tier financial authorities, such as the UK FCA.

On the bright side, it has low forex and stock index CFD fees, a smooth account opening process, and high-quality research tools.

It has some drawbacks though. The product portfolio is limited, the stock CFD fees are quite high, and the desktop platform is not easy-to-use.

As there is no minimum balance, no withdrawal fee and inactivity fee only kicks in after one year, feel free to try City Index out.

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71% of retail CFD accounts lose money

eToro is a well-known Israeli fintech startup, a social trading broker established in 2007.

eToro serves UK clients through an entity regulated by the Financial Conduct Authority (FCA), Australians through an Australian Securities and Investment Commission (ASIC) regulated entity. All other customers are served by a Cypriot entity that is regulated by the Cyprus Securities and Exchange Commission (CySEC).

eToro is not listed on any stock exchange, does not disclose its annual report on its site and does not have a bank parent.

eToro is considered safe because its UK and Australian arms are regulated by top-tier financial authorities and it is a well-known fintech startup.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% 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.

Recommended for traders interested in social trading (i.e. copying other investors’ trades)

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75% of retail CFD accounts lose money

#2 eToro
Fees

4.2

eToro offers free stock trading in Europe and has low CFD fees. On the negative side, forex trading fees are high and there is a fee charged for inactivity or withdrawal.

All spreads, commissions and financing rate for opening a position, holding for a week, and closing.

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75% of retail CFD accounts lose money

#2 eToro
Account opening

5.0

Account opening at eToro is seamless and very fast.

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75% of retail CFD accounts lose money

#2 eToro
Deposit and withdrawal

3.7

Depositing money is free and easy, with a lot of available options, including credit cards. However, there is a withdrawal fee and only USD accounts are available.

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75% of retail CFD accounts lose money

#2 eToro
Markets and products

3.8

At eToro you can trade with CFDs and forex, as well as real stocks, ETFs and many cryptocurrencies. In addition, the broker also offers innovative services like social trading and CopyPortfolio.

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75% of retail CFD accounts lose money

#2 eToro
Web trading platform

4.4

eToro offers a user-friendly and well-designed web trading platform. In addition, social trading is also available. On the other hand, the customizability is limited.

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75% of retail CFD accounts lose money

#2 eToro
Verdict

eToro has zero-commission stock trading in Europe. Account opening is really fast and seamless. It has also a lot of innovative features, like social trading.

It has some drawbacks, though. Forex fees and non-trading fees are high, and eToro only allows USD accounts. 

Overall, we would recommend eToro for its social trading feature and cheap stock trading.

Risk disclaimer

eToro is a multi-asset platform that offers both investing in stocks and cryptoassets, as well as trading CFD assets.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% 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.

Cryptoassets are volatile instruments which can fluctuate widely in a very short timeframe and therefore are not appropriate for all investors. Other than via CFDs, trading cryptoassets is unregulated and therefore is not supervised by any EU regulatory framework.

Past performance is not an indication of future results.

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75% of retail CFD accounts lose money

IG was established in the UK in 1974 and is one of the biggest CFD brokers in the world. It is regulated by several bodies globally, including top-tier regulators like the Financial Conduct Authority (FCA) and the Federal Financial Supervisory Authority (BaFin). IG Group is listed on the London Stock Exchange.

IG is considered safe because it is listed on a stock exchange, discloses its financials and is overseen by top-tier regulators.

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% 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. CFDs are not provided for US clients. Forex trading involves risk. Losses can exceed deposits.

Recommended for traders of any experience level looking for an easy-to-use trading platform

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68% of retail CFD accounts lose money

#3 IG
Fees

3.3

IG has low fees for stock index CFD, while forex fees are average to low. There is no fee for withdrawal and the inactivity fee is charged only after 2 years. On the negative side, the stock CFD fees are high.

All spreads, commissions and financing rate for opening a position, holding for a week, and closing.

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68% of retail CFD accounts lose money

#3 IG
Account opening

4.4

IG's account opening is seamless and fully digital. There is no minimum deposit for bank transfers and a low, $300 minimum deposit for credit/debit cards and PayPal. On the other hand, account verification takes around 3 business days, which is slower than at some other brokers.

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68% of retail CFD accounts lose money

#3 IG
Deposit and withdrawal

4.5

IG offers free and fast deposit and withdrawal. There are various options for funding your account, including traditional methods such as bank wire and credit card funding, as well as PayPal.

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68% of retail CFD accounts lose money

#3 IG
Markets and products

3.2

At IG, most clients can only trade with CFDs, forex and options. There are literally thousands of CFDs available to trade. Residents in the UK and some other countries can also trade with real shares. Other popular assets, like mutual funds or bonds, are not available.

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68% of retail CFD accounts lose money

#3 IG
Web trading platform

5.0

IG's web trading platform is great for both beginners and professional traders. It is easy to use, has all the necessary functions and can be customized.

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68% of retail CFD accounts lose money

#3 IG
Verdict

IG is one of the biggest and most reliable CFD brokers. It is regulated by several financial authorities around the world. IG Group is listed on the London Stock Exchange.

IG has one of the best web trading platforms Brokerchooser tested. The deposit and withdrawal conditions are great. You can also educate yourself with great educational materials.

On the other hand, there are some drawbacks. The stock CFD fees are high and the product portfolio in most countries is limited to forex, CFDs, and options. The phone customer service has also low quality.

Feel free to test IG's first-class trading platform since there is no minimum funding amount for bank transfers and you can easily open a demo account too. 

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68% of retail CFD accounts lose money

Trading Point Holding, XM's parent company, is a global CFD and FX broker founded in 2009. Trading Point Holding has two brands, XM and Trading.com.

XM is available globally and is regulated by three financial authorities: the Cyprus Securities and Exchange Commission (CySEC), the Australian Securities and Investments Commission (ASIC), and the International Financial Services Commission of Belize (IFSC).

Trading.com was launched in 2019 and is available only for EEA residents, except those living in Belgium, Cyprus, Greece and Switzerland. Trading.com is regulated by the UK's Financial Conduct Authority (FCA).

In this review, we focus on the XM brand.

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69.10% 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. Risk warnings are shown on the website but they are unclear on percentages

Recommended for forex and cfd traders who prefer metatrader platforms and seek low trading fees

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69.10% of retail CFD accounts lose money

#4 XM
Fees

3.8

XM has low trading fees for CFDs and charges no withdrawal fee. On the other hand, forex fees are average, and there is a fee for inactivity.

All spreads, commissions and financing rate for opening a position, holding for a week, and closing.

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69.10% of retail CFD accounts lose money

#4 XM
Account opening

5.0

XM account opening is hassle-free and straightforward. Your account is ready for trading on the same day.

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69.10% of retail CFD accounts lose money

#4 XM
Deposit and withdrawal

5.0

XM's deposit and withdrawal functions are fast and inexpensive, and offer you several options.

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69.10% of retail CFD accounts lose money

#4 XM
Markets and products

2.9

At XM, you can trade CFDs, forex and cryptos; non-European clients can also trade some real stocks. There are no ETFs, mutual funds, bonds, options or futures.

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69.10% of retail CFD accounts lose money

#4 XM
Web trading platform

2.8

XM's web trading platform is provided by MetaTrader. It is highly customizable and has a clear fee report. On the other hand, the platform lacks price alerts, and the design is outdated.

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69.10% of retail CFD accounts lose money

#4 XM
Verdict

XM is regulated by several authorities globally, including the top-tier ASIC.

On the plus side, we liked the low CFD and withdrawal fees. The account opening process is seamless and hassle-free. There is a wide range of educational tools of great quality.

XM has some drawbacks though. Its product range is limited to FX, CFDs and cryptos, with stock trading only available for non-European users. Its forex fees are average, and a monthly $5 fee is charged after three months of inactivity. 

We recommend XM for those who are interested in CFD and forex trading and prefer MetaTrader trading platforms. Feel free to test it via the demo account.

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69.10% of retail CFD accounts lose money

Plus500 is a London Stock Exchange-listed global CFD and FX broker that was founded in 2008 in Israel. It is regulated by several international financial authorities, including top-tier ones like the UK's Financial Conduct Authority (FCA) and the Australian Securities and Investments Commission (ASIC).

Plus500 is considered safe because it is listed on a stock exchange, discloses its financials and is regulated by several top-tier financial authorities.

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.4% 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.

Disclaimer for daytraders: At Plus500, scalping is defined as "A trading strategy where a significant portion of the customer's positions are opened and closed by him/her within 2 minutes." If Plus500 believes you were following this strategy, your account might be blocked and closed. Therefore, if you plan to execute trades within 2 minutes, Plus500 is not your broker.

Recommended for experienced traders looking for an easy-to-use platform and a great user experience

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76.4% of retail CFD accounts lose money

#5 Plus500
Fees

3.6

Plus500 has low trading fees and average non-trading fees. Even if they have an inactivity fee, it is applied only if you are not logging in at all.

All spreads, commissions and financing rate for opening a position, holding for a week, and closing.

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76.4% of retail CFD accounts lose money

#5 Plus500
Account opening

5.0

Plus500 account opening is seamless, fast and fully digital. You can open your trading account within a day.

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76.4% of retail CFD accounts lose money

#5 Plus500
Deposit and withdrawal

5.0

Plus500's deposit and withdrawal services are both great. You have many options, the process is simple and usually free of charge.

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76.4% of retail CFD accounts lose money

#5 Plus500
Markets and products

1.9

At Plus500 you can trade only with CFDs and forex. There is a wide selection of CFDs and currency pairs to trade with.

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76.4% of retail CFD accounts lose money

#5 Plus500
Web trading platform

4.4

The Plus500 trading platform is very easy to use and also looks great. On the negative side, it cannot be customized.

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76.4% of retail CFD accounts lose money

#5 Plus500
Verdict

Plus500 is a good CFD and forex broker. It is recommended for traders who are aware of the risks of CFD trading. The broker is regulated by several financial authorities globally, including the UK's FCA, and is listed on the London Stock Exchange. If you are not from the UK, you will most likely be served by Plus500 Cyprus, thus the Cypriot investor protection will apply.

Attention Daytraders! At Plus500 scalping is defined as "a trading strategy where a significant portion of the customer's positions are opened and closed by him/her within 2 minutes." If Plus500 believes you are scalping, your account may be blocked and closed. Therefore, if you plan to execute many trades within 2 minutes, Plus500 is not your broker.

The Plus500 platform is easy to use, with a great user experience, which even first-time users can navigate with ease. Spreads are competitive, but financing rates are quite high. Some more advanced research tools would be useful. 

As there is no minimum balance required, no withdrawal fee above $100, and the inactivity fee only kicks in after three months, feel free to give Plus500 a try.

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76.4% of retail CFD accounts lose money

Trading with CFDs became really popular in the last decade. Keeping your eyes on important criteria like fees or number of CFDs helps you to find the best CFD broker for you.

When we selected the best CFD broker in 2020, we ranked brokers focusing on CFDs along more than 100 criteria. Not to overwhelm you we list the five most important criteria.

The 5 most important criteria for CFD brokers are:

Fees, fees, and fees. We bet this is on top of your mind when you want to select the best CFD broker. Let's see how we checked.

It is tough to compare CFD broker fees, but we are here to help. You need to calculate with two fee categories: trading-related fees and non-trading fees.

Trading-related fees

With regards to the trading-related fees, brokers can charge commissions, spreads and overnight fees. To make your life easier we calculated all fees for real-life scenarios. So, you can compare the fees. We took

• US equity index - S&P 500 index CFD
• European equity index - Europe 50 index CFD
• Forex - EURUSD and GBPUSD

We assumed opening a position, holding it for a week, and closing it. S&P 500 and EU 50 positions are $2,000, while the forex positions are $20,000. These real-life assumptions make CFD fees comparable.

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CFDs are derivatives, you can easily trade with a wide range of products, but it is leveraged, so it is risky.

CFDs are derivatives: you bet on price movements

With CFDs, you can gamble on whether asset prices will go up or down without buying the stock. Let's say you want to profit from Microsoft's stock price going up. At an online stockbroker, you would buy the Microsoft stock. At a CFD broker, you can instead bet directly on the stock price going up. However, CFDs are much like knives: could be very useful, but if no idea how to use one, you can cut yourself.

CFDs are an easy way to reach a lot of markets with leverage

Why on earth is this good for you? Well, there are three advantages:

• 1, You can make bets on all kinds of products. E.g. if you wanted to trade with Turkish stocks, go ahead. This might not be possible with an online stockbroker. It is easier for a broker to provide a CFD than have access to the Turkish stock exchange.
• 2, The second advantage is leverage. The odds of your bet will be much larger than with buying the actual stock. It also comes with greater risk, therefore we recommend you to fully understand leverage before you invest.
• 3, Lastly, with CFDs, you can easily have a short position. That is a plus indeed.

To understand these advantages better, you can learn through CFD trading tips.

Not owning the underlying asset exposes you to additional risks

If you do not own the stock (or any other underlying asset), you are running a whole different risk which you need to understand before trading CFDs.

Let's say Bob has a Siemens stock and Janet is in a long Siemens CFD position, both with broker “Bust Broker Co.”. Bust Broker Co. goes bust. Bob's Siemens stock is in custody with his custody service provider, sooner or later he will be able to access it. Janet was in a long position, therefore she will be compensated only up to the investor protection scheme of the country. In most cases, this is up to €20,000.

You've probably heard of European Securities and Markets Authority's new regulation relating to CFDs and binary options. New measures clearly show how the European regulators want to secure retail investors from the gloomy side of the European retail brokerage industry.

Based on ESMA's research, around 74-89% of investors are losing their deposits and in many cases not purely due to their fault. One core problem is that the dealing desk brokers are gaining profit when their clients lose. If you don't know what this model looks like, a Financemagnates article explains that very well. Another problem is the limitless and uncontrolled marketing of deposit bonuses, cheap prices and messages promising easy ways of getting rich.

The new regulation will probably help to make the ratio better off. The measures and their explanations are the following:

• Limitation of leverage: it was not unusual that you could open a position with 400:1 leverage, but from now the possible maximum leverage will be 30:1 for major currency pairs. The limitation varies according to the underlying asset's volatility:
  • 30:1 for major currency pairs
  • 20:1 for non-major currency pairs, gold and major stock indices
  • 10:1 for commodities other than gold and non-major stock indices;
  • 5:1 for single stocks and any underlying not otherwise mentioned
  • 2:1 for cryptocurrencies
• Margin close out on a per account basis: if an account's total margin falls below 50% of the initially required margin, brokers must close out or more of your positions.
• Negative balance protection: you cannot lose more money than you invested in.
• Restriction on marketing and incentive tools: instead of promoting CFD trading by promising of getting rich in a short period, brokers have to clearly show what percentage of their customers are losing money.

Summing up, the stricter regulations mean that trading CFDs will become a nothing but a bedtime story for our kids? On the one hand, retail investors are protected by losing more than their deposit. On the other hand, handy investors can't multiply their profits by the use of high leverage. Altogether, we think CFD will keep its popularity as trading with that will become more transparent and safer.

Being part of a banking group or listed on an exchange should be your primary compass for the best CFD brokers

It is time to discuss how to make a well-established choice in today's changing landscape of CFD brokers. We prefer exchange-listed and/or banking licensed brokers. Why?

• Being listed on any developed exchange means additional regulations, strict and frequent audits and also the need for constant communication between the shareholders and other stakeholders. No wonder that only a small portion of retail brokers decides to exchange money for transparency.
• Banks are indisputably crucial building stones of any economy. Strict capital requirements, regulations and need for transparency is a must. Therefore any broker with a bank behind its back can be considered more reliable than the rest of the competition.

For more help on these points check out our online brokers' comparison table.

Compare protection amounts

You saw the details, now let's zoom out. Here are the best CFD brokers in 2020 for citizens in Australia

City Index is our winner, the best CFD broker for Australian citizens in 2020. Low fees for forex and index CFDs. Fast and smooth account opening. Diverse research tools.

All are great great choice. Do not forget, that CFDs are really risky. If you are experienced, pick your winner, and take the next step in your trading journey. Let us know what you think in the comments section.

Still unsure? Use the broker finder and find the best broker for you.