Investing in stocks & funds is one of the greatest ways to put your money to work and take advantage of the big gains offered by the stock market.
Previously many large investing firms charged very high fees to invest stocks & funds. For example, Hargreaves Lansdown charges £12 a trade which can significantly add up if you’re a frequent investor.
The high fees & complexity of use, put off many people from even attempting to invest.
But now things have changed!
We are now in a new age of FREE TRADING INVESTING APP’s such as Free Trade & trading 212. These are easy to use, versatile and offer you instant access to the worlds markets.
In this video I’m going to review two of my favorites FREE Trade & Trading 212.
————————————————-Lets Dive in! (Intro
Is Free Trade really FREE?
Well yes mostly! There are no trading fees & no minimum deposit for Freetrade, which means that you can buy stocks from as little as £1.
However,
if you trade in stocks from other countries. There’s a 0.45% fee that applies here.
How Does Freetrade Make Money?
Freetrade makes money, simply, by charging for premium perks. One of the most interesting sides to Freetrade is its stocks and shares ISA which can protect your cash from tax but costs £3 per month.
They also charge a fee if you wish to take your money from the app quickly.
The standard bank transfers can take time to process, so if you would like a same day transaction that will cost you £5.
Whereas Trading charges ZERO platform FEES and you can open an ISA for FREE!!
They likely make there money through the CFD part of there platform and other advanced parts. This is the classic fermium business model.
Which Taxes do you have to pay?
You must pay a 0.5% stamp duty cost on any individual stock purchased through the apps. If you’re a long term investor & not a regular trader then this isn’t an issue.
You also would have to pay Capital gains tax on any stock profits you made over a period of time. However, if you invest via an ISA account then your profits are protected from this tax!!
Is your money Protected??
They are also registered with the FSCS which offers compensation up to £85,000 should the company go bust. However, they won’t protect you from bad investment decisions that risk is yours. But the rewards are also yours!
Both Apps also offer ISA account options which allow you investments to be protected from Tax up to £20,000.
Each person can only open one ISA account per tax year so just be aware of that if investing large sums.
Freetrade Pros and Cons
- Freetrade is, for the most part, absolutely free. Therefore, you can start depositing and trading from at least £1.
- However
- The app itself is really easy to get into and use. Therefore, it is likely to appeal to people who may not know how to get their heads around basic investing and trading.
- Freetrade offers a nice stocks and shares ISA option, which is only really going to be worthwhile if you know what you’re doing, and if you’re willing to pay £3 per month for the privilege.
NEGATIVES of the Free Trade App?
- Free Trade offers a more limited amount of international stocks compared to Trading 212. For example, they did not have access to any of the latest US Airline stocks such as delta airlines which I invested in during this latest crash.
You can request these missing stocks on the forum, but dates for the introduction are ongoing.
- you will expect to pay an FX percentage on anything you trade in outside the UK.
- While you can trade for free through Freetrade, it may not be the best at delivering the stats and reports you’re looking for.
- No Desktop PC version. They have a mobile app version only.
As a long term investor I prefer investing via my PC. However, it’s clear that free trade is a mobile app only version to increase trading volumes, as the power is always in your hand.
We have all heard of drunk text messages, but what about drunk investing if someone has been to the pub. Gets there phone out and could invest thousands in a fret of emotion.
- Registration can take slightly longer on Free trade.
On apps such as Trading 212 or the Vanguard platform they use your national insurance number for near instant verification. Whereas with free trade you must submit your Identification documents & wait. This can be a little annoying if you have seen a rare opportunity where you need to act fast.
However, if you set your account up before then this should be no problem. ]
- Deposits into Free trade can take a few hours to show up whereas trading 212 is instant.
Trading 212 Pros and Cons
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Trading 212 offers a larger set of international investing stocks & funds. A much more diverse selection. For example, I invested in Delta & southwest airlines on this app as it wasn’t available on Free trade.
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Trading 212 also has a Desktop & mobile app. So people can choose how they wish to invest. This is a lot safer for the reasons mentioned previously.
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Trading 212 is very flexible and is also really easy to set up and start with. There are a few specialist platforms on board, all of which have their positives.
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Trading 212 is, in the long run, going to appeal to more experienced traders. It’s a little more complex to digest.
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Trading 212 offers the ability to deposit instantly whereas on free trade it takes a few hours for your money to appear.
Negatives of Trading 212:
Trading 212 doesn’t seem to offer a nice clean overall summary of your investments which is a plus of free trade.
Conclusion:
Both Trading 212 & Free trade are both great free trading apps. I would recommended Free Trade for beginner investors who wish to invest in a smaller set of UK stocks & big name international brands.
Whereas Trading 212 is better for the more advanced user, who wishes for greater selection of assets to invest in & the desktop version which gives peace of mind for some.
To get started on either platform, use the link below & you will get a FREE share up to £100 upon sign up once you deposit.
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Thanks for watching 😉
