Using a stocks and shares ISA is an excellent way for UK investors to protect investing gains and dividend income from tax. However, not all ISA accounts come with the same costs and fees. Finding the cheapest stocks and shares ISA means you keep more of your investment profits.
Otherwise, it’s counterproductive if you go through all the effort of protecting your investments from tax but then end up paying through the nose in fees and costs. Especially when there are cheap ISA options out there.
In this article, we’ll showcase the cheapest stocks and shares ISA accounts available so that you can find the best one for protecting your portfolio from the taxman.
Cheapest Stocks and Shares ISAs for 2023
- Trading 212: Cheapest overall ISA
- InvestEngine: Cheapest ISA for ETFs
- Vanguard: Cheapest ISA for index funds
- Dodl: Cheapest ISA for beginners
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Comparison of Cheapest Stocks and Shares ISAs
| ISA provider | Minimum deposit | Products | ISA fee | Investing commission |
| Trading 212 | £1 | Stocks, ETFs, investment trusts | Free | £0 |
| InvestEngine | £100 | ETFs | Free (0.25% for managed) | £0 |
| Vanguard | £500 (or £100/month) | Index funds & ETFs | 0.15% (capped at £375/year) | £0 |
| Dodl | £100 (or £25/month) | Stocks, ETFs, and funds | 0.15% (min. £1/month) | £0 |
#1 Trading 212
Trading 212 at a glance
Trading 212 is an excellent investing platform and offers the cheapest all-around stocks and shares ISA in the UK. It costs nothing to open an account, there are no commissions for buying or selling investments, you can buy fractional shares for just £1, and there’s no extra fee to use the ISA wrapper.
The app is extremely well-designed and easy to use. You can use your Trading 212 stocks and shares ISA to invest in over 12,000 stocks, ETFs, and investment trusts across the UK, US, and Europe. There is a small FX fee of 0.15%, but this is lower than most competitors.
With Trading 212’s cheap stocks and shares ISA, you still get full access to all the benefits and features offered by the platform. If you’d like to know more about the provider, you can read our in-depth Trading 212 review.
Pros
- No ISA fee
- 0% commission
- Low 0.15% FX fee
- Over 12,000 investments
- Social features
- Fractional shares
- No minimum deposit
- Excellent investing app
- Ability to use ‘Pies’ and ‘Autoinvest’
- Interest paid on cash balances
- Referral scheme
Cons
- Limited range of asset types
- Limited analysis and investment resources
#2 InvestEngine
InvestEngine at a glance
InvestEngine is a relatively new platform that focuses completely on exchange-traded funds (ETFs). If you’re not interested in ETFs or want to pick individual stocks, this cheap ISA probably isn’t for you. But for those looking to invest their ISA allowance in ETFs, InvestEngine offers extremely low-cost stocks and shares ISA.
If you want to invest in ETFs, InvestEngine has over 550 to choose from, and if you opt for its DIY ISA, there’s no platform fee. If you’d rather have an expertly managed portfolio, you can use its robo-advisor service for a fixed 0.25% fee.
InvestEngine has a great app with useful features like ESG screening and portfolio look-through. It also offers the option to autoinvest and one-click portfolio rebalancing. Check out our complete InvestEngine review to find out more.
Pros
- No for DIY ISA portfolio
- Over 550 ETFs
- Zero cost to buy or sell ETFs
- Great app
- One-click portfolio rebalancing and autoinvest
- Invest from £1
- Referral scheme
Cons
- 0.25% fee for managed ISA
- Only ETFs available
- Limited investing and analysis resources
- £100 minimum initial deposit
#3 Vanguard
Vanguard at a glance
Vanguard created the concept of index funds back in the 1970s, so it’s no surprise it’s our cheapest stocks and shares ISA for index funds. In fact, there are not many places to invest in proper index funds throughout the UK, and often, you’ll need to use ETFs instead.
It doesn’t cost anything to open a Vanguard stocks and shares ISA; there’s just a 0.15% ongoing platform fee (capped at £375/per year). Vanguard also offer a managed ISA, but there’s an additional fee of 0.3%. The investment selection is limited compared to other ISAs, but Vanguard has an excellent basic choice of index funds and ETFs covering a range of markets and assets.
If you’d like to know more about the platform, you can read our full Vanguard ISA review.
Pros
- Low 0.15% annual platform fee
- No added fee for an ISA
- Over 85 index funds & ETFs
- Market leader for index funds
- No charge to buy or sell funds
- Interest paid on cash balances
- SIPP available for no extra fee
Cons
- Limited investment choice
- High £500 minimum deposit (or £100/month)
- 0.3% extra fee for managed ISAs
- No investing app
- Limited analysis and resources
- Can only buy Vanguard funds
#4 Dodl
Dodl at a glance
Dodl is an investing app launched by established provider AJ Bell in 2022. One of the best things about Dodl is that it allows you to hold a general investment account, a stocks and shares ISA, a self-invested personal pension (SIPP), and a lifetime ISA (LISA) – all for no extra cost.
We think this is the cheapest ISA for beginners because that’s who it’s designed for. The app uses a range of monsters to help you learn about basic investing concepts. Also, a few different asset types are available (stocks, ETFs, and blended funds), but only a small selection of each type so that it’s not overwhelming for those starting out.
Experienced investors would find the Dodl stocks and shares ISA limiting, but that’s not who it’s designed for, and we think it’s a great cheap choice for beginners.
Pros
- Low 0.15% annual platform fee (£1/month minimum)
- No added fee for an ISA, SIPP, or LISA
- 3 asset types
- Easy-to-use app
- No charge to buy or sell investments
Cons
- Small number of investments
- £100 minimum deposit (or £25/month)
- No desktop platform
- Limited analysis and resources
- 0.75% FX fee
The bottom line
To summarise, here’s the list of the ‘cheapest stocks and shares ISAs’:
| #1 | Trading 212Cheapest overall ISA |
| #2 | InvestEngineCheapest ISA for ETFs |
| #3 | VanguardCheapest ISA for index funds |
| #4 | DodlCheapest ISA for beginners |
Using a tax-efficient account is the best way to protect your investment portfolio from capital gains or dividends tax. But, it’s important to find the cheapest stocks and shares ISA possible. Otherwise, the money you save in tax will just be paid to the platform in fees.
Understanding what type of investor you are will help you decide on the cheapest stocks and shares ISA to use for investing your £20,000 yearly allowance. We hope this article has provided some insights into the options available in the UK. Let us know in the comments if there are any cheap stocks and shares ISAs you like to use.
Pedro is passionate about finance, marketing, and technology. He is a growth manager at several online projects and a former digital marketer for a fintech company.
