With the rise of Zero Fee Investing Apps and the leading presence of Trading 212 and Freetrade, it may be a bit confusing to decide which one is good enough for you. In this blog, I am going to break the two apps down for you, telling you the advantages and disadvantages, so it will be easier to make a choice as to which one is right for you. That way, you can start your investment with as little as one pound, with low entry fee and low cost.
My name is Antoaneta, and I welcome you once again to learn a thing or two about two of the most prominent and popular zero fee investing apps present in the UK. So, if you are in the UK and you simply want to make your investments with no strings attached, you probably might want to read and pay attention to this blog, because you might be needing the information I am about to share.
Now, let me jump straight into the business of the day, dissecting both of them for you to make your choice. The thing about both sites is that they have smart and powerful incentives to encourage you and other people to join their platforms. Both of them offer free shares incentives if you are referring a friend to them. If you refer a friend to Trading 212, you may receive free shares of up to a hundred pounds and so will the people you referred up to a limit of twenty shares overall, while with Freetrade gives free shares of up to two hundred pounds.
Freetrade started in 2015, while Trading 212 started earlier back in 2013. The two companies attacked the stock market with enough incentive, as they did people more options to invest without complicated fees associated with investing, like commission fees and admin fees.
One of the slight differences between the zero fee investing apps right now is Trading 212 offers more investment platform choices than its counterpart, Freetrade. They both provide tax-free returns up to twenty thousand pounds per person. So, you do not have to be taxed for anything you earn, deposit, or withdraw. As a new investor, make sure to look out for investment allocations first.
How do these sites make their money?
In this section of the blog, I will be discussing how individual companies make their money.
Freetrade, on the one hand, makes most of its money through some of their premium options. To invest with Freetrade, you have to pay a small premium fee of three pounds monthly, amounting to thirty-six pounds per annum, and for instantaneous withdrawal, there is a small charge of five pounds. They are working on a premium account very soon, and for a monthly fee, you will have all those smaller deductions removed.
Trading 212, on the other hand, do not charge a shilling across the board. They offer a type of account called CFD, mainly used for quick analysis, buying and selling, to make profits on the same day. Through the small token you pay for this account, the company can make a bulk of the profit.
Both of the accounts are protected by the FXCs, which means you can deposit up to eighty-five thousand pounds at a time, and if anything goes wrong, your money is still safe. This should give some bit of confidence, considering they are so new on the market and have not been through any economic meltdowns or recessions.
A rough overview of Freetrade
Their features include having a general account, an investment ISA (bear in mind that they do charge for that if you want to have an investment ISA with them), they provide you with UK stocks, and you do not have to pay any additional fees, they also make their money from international stock (PORTION) meaning you can invest in UK pounds and they convert it to buy your shares in whatever currency you want and are working on a premium account which will eradicate any fees whatsoever and allow you to buy stocks at any time of the year. The general account does not allow that, only trades till 4 pm, once a day. They also offer basic ETFs, stocks and shares, but do not enable cryptocurrency and currency options.
However, the information on Freetrade app may be somehow limited compared to that of Trading 212, and have free options. They offer great premium services. The investment ISA will make people use them more often.
A rough overview of Trading 212
They allow a minimum investment of about one pound, allow a euro or dollar account. For their CPD account, you will need a minimum investment of ten pounds. They have a large array of assets of about 1800 diversities. They make their money through the CFD accounts. Trading 212 has more detailed information compared to Freetrade. This option seems like the best for someone looking long term, not only will it start with the investment ISA, but it could build up to something good in the stock market.
Let’s round up the zero fee investing apps:
To conclude, I will say that both zero fee investing platforms don’t have anything outside of the investment ISA or general investment accounts. They do not offer pensions or any other way to invest. They offer excellent services and incentives. Both apps are also straightforward to use.
From my assessment, I find Trading 212 more user-friendly and better to use as a beginner than Freetrade, but it does not mean that every platform does not have its benefits and drawbacks. In general, I like the benefits of both apps so you may consider the option of buying parts of shares in both. So, you can start with as little as one pound, and watch it turn into a significant portfolio over the years. However, you can do your research and draw your conclusions.
Recommended books for further reading:
- Unshakeable: Your Financial Freedom
- The Intelligent Investor
- The Wealthy Barber
- Rich Dad Poor Dad
- Money: The Top 100 Best Ways To Make And Manage Money
If you are looking to open an investment account, follow these links below:
- Passive income
- Silver & Gold coins
- Interactive Brokers
(‘68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.)