With inflation predicted to hit 10% this year, many of us are looking for ways to grow our savings. One way you could beat inflation is placing some money in a stocks and shares Isa.
We've found that the difference in fees between the most and least expensive stocks and share Isa providers can be considerable.
Invest £5,000, and you could save up to £112 a year by going from the most to the least expensive provider (2.24%). Invest £250,000 and that annual saving jumps to £1,101 (0.44%).
And, as you'll be wanting to invest for five years or more to ride out market dips, those savings can really add up.
An Isa is a tax-free way to save money. You can have one more than type of Isa and you can put up to £20,000 a year in any of them.
Stocks and shares Isa fees are paid by selling a small portion of your investments, so you won't need to set aside money for them.
Before you invest, you need to ask yourself whether you can afford to take the risk that your investments will go down as well as up.
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The cheapest platforms for you depends on how much you have saved and what you want to invest in.
Investors with smaller portfolios - less than £50,000 - will usually be better off choosing a platform with a low percentage-based charge.
For example, it costs 0.15% a year for stocks and shares Isa - which works out at just £15 a year for a portfolio smaller than £10,000 (not including fund charges, approximately £20 extra). The most expensive platform for the same-sized portfolio charges more than ten times this.
Investors with larger portfolios - more than £50,000 - will be better off with platforms that charge a flat fee, like or , which charge £120 and £112 a year respectively regardless of whether you invest £5,000 and £500,000.
If you want to trade , or , watch out for transaction fees. This is how much a platform charges you to buy and sell shares. Some platforms will lower the charge if you buy shares as part of a regular savings plan. Others won’t charge this at all.
Commission-free trading means the platform doesn’t charge you to buy and sell shares.
But these platforms aren’t completely free.
This is still very cheap for large portfolios and the tax savings can also be considerable.
But you'll need to be comfortable with a relatively limited range of investments. It costs £9.99 a month (£120 a year) to upgrade to Freetrade Plus, which grants you access to a bigger selection of stocks and ETFs, as well as letting you limit orders and stop losses - not much cheaper than some of the flat fee platforms we've mentioned above.
Another commission-free trading app, Trading 212, is currently not opening new accounts for UK customers while it deals with a backlog of applications.
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