Whether you are a newbie or an experienced investor, it is never enough to stress the importance of choosing the right online broker. As such, you should open an account with a regulated broker, with good internal features, educational resources, great customer support, and, you guessed it, that saves you money on expenses and fees! Overall, you need to feel confident about the platform you are using.
As you know, the UK has left the European Union at the end of 2020. Still, as a UK investor, you did not notice much in what concerns the investment landscape. In reality, you have plenty of options compared to other countries. This article will present you with five investment platforms that offer zero commission trading in the UK, and, in some cases, we even use them in our personal investment activity.
- eToro: Trusted by +25m users, it is an online broker and a social trading platform that offers commission-free stock and ETFs trading! eToro is designed to give you access to a wide range of financial products (including cryptocurrencies) within an easy to navigate platform.
- Freetrade: An investment app that lets you invest in more than 6,000 stocks (from the US, the UK, German, Finland and the Netherlands) and ETFs. Offers ISA and SIPP accounts.
- Revolut Trading: It is a feature inside the Revolup app. It offers 1 free trade every month. Mobile app only.
- Trading 212: commission-free stocks and ETFs trading (+6500 global stocks and ETFs) and presents fractional shares. Over 15 million customers. Offers an ISA.
76% of retail CFD accounts lose money when trading with this provider.
All these companies are regulated and/or registered in the UK’s Financial Conduct Authority (FCA).
1# eToro
eToro at a glance
Founded in 2006, eToro is a well-known worldwide fintech startup and the leader in the social trading field (follow other people’s trades), with over 30 million users worldwide. You can invest in financial products such as CFDs, ETFs, Stocks, Commodities, Forex, and Cryptocurrencies through their platform, which is intuitive and simple to use, making it a good choice for beginners, not to mention that they started offering free stock and ETFs trading in the UK (not all ETFs are commission-free).
Opening an account and depositing is easy, and you can even try it out with virtual money. On the downside, you have a withdrawal fee of $5 and spreads can be high for some products, like cryptocurrencies.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% 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.
2# Freetrade
Freetrade at a glance
Freetrade is a mobile-only commission-free UK stockbroker founded in 2016 that lets you invest in more than 6,000 stocks (US, UK, German, Finnish and Dutch), as well as ETFs, for free.
Freetrade came to revolutionize the traditional brokerage industry. A lot of brokers still present high complexity over their platforms and product offer. Freetrade is on a mission to help customers achieve better long-term financial outcomes and, for that purpose, it wants to be as transparent and trustworthy as possible. Ultimately, their goal is to allow everyone to benefit from wealth creation.
In the Freetrade app, you will not find CFDs and other related complex products; it does not promote day trading and has no hidden fees. The accounting opening process is quick and smooth. The mobile app is remarkably user-friendly. The main drawback is the limited product offering (no options, Forex, CFDs, Commodities or Cryptocurrencies).
As displayed on their website, Freetrade makes money through 3 revenue streams: ISA, £3/month, their premium service (£9,9/month), a fee of 0.45% of the Base FX rate on each US order placed, and a small amount of interest earned from banks on customers’ cash.
They operate under a freemium (free+premium) business model. For £9,9/month, users get extra features, such as limit orders, the ability to set stop loss, more stocks, etc. If you’re interested, you can also read our full Freetrade Review.
3# Revolut Trading
Revolut at a glance
Founded in 2019, Revolut Trading is part of the Revolut app (existing since 2015) and provides its users with an efficient way to invest (all in one place). It only allows investment in American stocks (+750 companies) free of charge up to 1 transaction per month, cryptocurrencies with a charge of 1.99% or EUR 0.99 per trade (whichever is higher), and gold and silver with a spread of 0.25% when the market is open. On the other hand, there are no inactivity or withdrawal fees.
The app is super intuitive, and the account opening process is 100% digital, fast, and secure. Unfortunately, it still has a very low offer of financial products, and the account can only be denominated in dollars. Some of the non-accessible assets are the following ones: ETFs, CFDs, Forex, bonds, and options. Furthermore, it does not have any educational or market research material, and it charges an annual custody fee of 0.12%.
Learn more in our in-depth Revolut Trading Review.
4# Trading 212
Trading 212 at a glance
Founded in 2006, Trading 212 is a fintech based in London that aims to democratize the entire investment process through a simple mobile application by allowing anyone to invest in more than 6500 stocks and ETFs, Forex, commodities, CFDs and cryptocurrencies. More than 15 million people have already downloaded the app. In 2017, it was the trading app with the most downloads in Germany and, since 2016, it remains in 1st place in the United Kingdom.
In Trading 212, you will find commission-free stocks and ETFs trading, fractional shares, and even an automatic investment system (Robo-advisor), if you wish. On the downside, it shows some limitations in terms of products available, such as the lack of bonds and options. Opening an account is extremely quick and easy.
Within the app, you will notice two distinct sub-platforms: Trading 212 Invest, where you can trade a range of assets free of charge, and Trading 212 CFD, where you may trade leveraged financial products (CFDs).
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this broker. It is important to understand how CFDs work and the risks involved in trading, such as losing all invested capital.
Which Free Trading App Should I Choose?
In general, this is how it plays out: if you are a first-timer, you will try to get a hassle-free platform with good customer support and some help on basic investment concepts. On the other hand, as a proficient investor, you probably will emphasise the market and products covered, price alerts and real-time data on critical corporate events.
Do you see the problem? Yeah, it is pretty hard to directly answer such a large audience. Look at this article as a complementary approach to your own due diligence. Do you already have something in mind? Maybe you only want to invest in ETFs? Reach out to us in the comment section, and we will help you figure out the best platform for you!
A reminder that the above should not be construed as investment advice and should be considered information only. Investors should do their own research and due diligence about the services and opportunities best suited for their risk, returns, and impact strategy.
Happy investments!
Franklin is a CFA Level III Candidate with 3 years of experience in Wealth Management as a Fund Research Analyst and the Host of the "Edge Over Hedge" YouTube Channel.
