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Freetrade investment platform review

We analyse the ‘commission-free’ trading platform and ask whether it’s a good option for investors

In this article
What is Freetrade? Is Freetrade good? What are Freetrade’s charges? Who is Freetrade good for?
Who is Freetrade expensive for? What accounts and services does Freetrade offer? Is your money safe with Freetrade? Get top money-saving tips from Which?  

What is Freetrade?

Freetrade is a smartphone app-based investment platform for trading shares, exchange-traded funds and investment trusts.

It offers commission-free trading, with no transaction fees, and no platform fees for a general investment account.

Freetrade is based in the UK and its app was launched in October 2018.

Is Freetrade good?

Although we weren’t able to survey enough of Freetrade’s customers to create customer scores, potential customers should take note of a number of points.

Freetrade’s ‘commission-free’ model could save you a considerable amount of money compared to other DIY investment platforms.

However, the range of investments it offers is more restricted than other platforms, with only US and UK stocks, as well as ETFs and trusts.

It offers a limited selection of investment news, but fewer tools than you’ll find at other DIY platforms.

What are Freetrade’s charges?

Annual charges

  • General investment accounts are free
  • £3/month (£36 a year) for stocks and shares Isa
  • £9.99/month (£119.88 a year) for self-invested pension plan (Sipp - £7 if a Freetrade Plus member)
  • £9.99/month (£119.88 a year) for Freetrade Plus

Trading charges

  • No charge for buying and selling assets
  • 0.45% currency conversion surcharge
  • No charge for transferring in or out

Who is Freetrade good for?

The absence of transaction or platform fees makes Freetrade a good option if you can recreate your current portfolio with it.

It may also suit those who frequently trade shares - though bear in mind the selection of shares is far more limited, and the tools are more basic. You also can’t vote in company AGMs.

Who is Freetrade expensive for?

Freetrade’s £3/month Isa charge means that, for portfolios of £10,000 or less, you’d be better off with DIY platforms such as Vanguard, Charles Stanley Direct, Fidelity, Close Brothers Asset Management or HSBC

Given the limited selection of investments offered by Freetrade, it’s important to consider your investment goals, and whether switching to save on transaction and platform fees is worth compromising your strategy.

You’ll also need to be comfortable managing your investment by smartphone app.

What accounts and services does Freetrade offer?

The information below gives an at-glance view of the key things that the accounts and services Freetrade offers.  Elements marked with a are offered by Freetrade and those marked with a are not.

 

General investment account

 

A general investment account that can hold different types of investments but doesn’t give tax-free benefits like pensions and Isas.

 

Sipps

 

A Sipp is a pension where you have complete control over the investments you put your savings into.

 

Stocks and shares Isa

 

A stocks and shares Isa is a tax-free account that allows you to put your money in a range of investments.

 

! Savings account

 

With Freetrade Plus (costing £9.99 a month) you can earn 3% interest on cash up to a maximum deposit of £4,000.

 

Advisory services

 

Advisory services allow you to access professional investment advice.

 

Lifetime Isa

 

A lifetime Isa is a tax-free savings or investment account designed to help people aged 18-39 buy their first home or save for retirement. 

 

Annuity

 

An annuity is an insurance product which allows you to swap your pension savings for a guaranteed regular income that will last for the rest of your life. 

 

Banking services

 

Banking services allow you to operate bank accounts, make transfers and make payments.

 

Income drawdown

 

Income drawdown allows you to take money out of your pension to live on in retirement.

Is your money safe with Freetrade?

If Freetrade went out of business, you would be compensated by the Financial Services Compensation Scheme (FSCS). 

The FSCS will cover up to £85,000 of investments per person, per platform. You can claim for free online: there’s no reason to use a claims management company. 

You won’t be compensated for investments falling in value, or a company in which you hold shares goes bust, unless this poor performance resulted from bad advice given by a regulated Independent Financial Advisor that has since gone bust.  

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