Best high street bank for investing

Clare says

On price, NatWest Invest has by far the lowest platform fee of all the high street banks I’ve reviewed – just 0.15% (0.10% if you’re investing £1m+, or just 0.05% if you’re investing £5m+). And with ongoing fund fees guaranteed never to top 0.40%, that means you’re assured a maximum total fee of just 0.55%.

The reassurances here are only possible, however, because there are so few funds on offer: just five ready-made portfolios. Each has a different risk rating so there’s an option for every profile from ‘defensive’ investor to ‘adventurous. And, of course, with a ready-made solution, virtually all of the hard work is done for you as there’s no researching different investment strategies or individual investable assets. It’s an out-of-the-box solution that can have you investing in super quick time. And if you need help working out which portfolio is best for you, NatWest provides a robo-advice service that you can access for just £10, which will assess your risk profile for you.

But, of course, this won’t suit everyone. If you want more control over your investments and the full range of stocks, shares, funds, investment trusts and ETFs to choose from, you’ll need to look outside of your NatWest app.

I should also say, it is possible to get lower ongoing fund fees at other providers, but NatWest offers funds managed by Coutts which have so far (although we only have one full year’s worth of data) out-performed the industry average.

Use this if

You are a NatWest customer looking for a very low cost, easy entry into investing and you want a prestigious name managing your funds.

Fees

The platform fee varies depending on how much you invest:

Up to £1m = 0.15%
£1m – £5m = 0.10%
£5m+ = 0.05%

Fund fees vary according to which ready-made portfolio you choose but are never more than 0.40% of the amount you have invested.

There are no additional dealing fees or FX fees with ready-made portfolios.

Account types

• General investing account
• Stocks and shares ISA
• Junior stocks and shares ISA
• Self-invested personal pension (SIPP)
• Cash ISA

Assets

Five ready-made portfolios spanning the following risk profiles:

Defensive
Cautious
Balanced
Ambitious
Adventurous

Clare says

Barclays has a few things going for it which might make it a good option if you’re an existing Barclays customer: reasonable annual fees, no dealing fees on funds or ready-made portfolios, a wide range of assets to choose from, and above-average historic returns on its ready-made portfolios.

However, if you’re a customer who wants to trade in stocks, ETFs, investment trusts, or bonds/gilts, then you could find your costs ticking up thanks to dealing fees and FX fees that are far from the cheapest around.

Use this if

You’re a Barclays customer, and you want to invest in a ready-made portfolio.

Fees

Platform fees:
Up to £200,000: 0.25% of your portfolio value
Over £200,000: 0.05% of your portfolio value

Dealing fees: £6 per trade (excluding funds which incur no dealing fees)

Fund fees: Paid to the fund provider directly, these fees vary according to the fund you choose.

FX fees: First £5,000: 1%
£5,000 – £10,000: 0.75%
£10,000 – £25,000: 0.5%
£25,000 – £250,000: 0.25%
Value over £250,000: 0.1%

SIPPs: Additional third-party admin costs of £150 apply for investments in SIPPs.

Account types

• General investing account
• Stocks and shares ISA
• Self-invested personal pension (SIPP)
• Cash ISA

Assets

• UK stocks
• US stocks
• European stocks
• ETFs
• Ready-made portfolios
• Bonds and gilts
• Investment trusts
• Funds

Clare says

If you’re a Lloyds customer, it is possible to invest relatively cheaply with a flat platform fee of just £20 per six months and low fund dealing fees. The best deals, therefore, are to be had by those with large portfolios who will benefit most from a flat fee, and only invest in funds.

If you’re aged 18-25, or you’re a Lloyds Premier or Private banking customer then the twice-yearly £20 admin charge is waived, which is a nice bonus.

If you’re planning on buying and selling shares, however, watch out for the above-average stock dealing fees and FX fees. With a 1% FX fee added on to all international trades, and £11.00 charged every time you trade a UK asset, costs will soon mount for regular traders. That said, Lloyds does offer reductions on costs for those willing to set up a monthly investment plan.

Use this if

You’re an existing Lloyds customer with a large portfolio, wanting to buy and hold funds, and not planning to buy/sell often.

Fees

• Twice-yearly administration charge of £20.00
• No administration fees for Premier and Private Banking customers
• No administration fees for 18-25 year olds
• No dealing fees on international shares but 1% FX fees apply
• Very high dealing fees on UK stocks – £11.00 per trade
• Regular investment plan eradicates dealing fees

Account types

• Stocks and shares ISA
• Self-invested personal pension
• General investment account
• Cash ISA
• Junior Cash ISA
• Junior SIPP
• Trust account

Assets

• UK Stocks
• US Stocks
• European Stocks
• Rest of World Stocks
• ETFs
• A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.Ready-made Portfolios
• Bonds and Gilts
• Funds
• Investment Trusts
• REITs

Clare says

£36 per year flat platform fees could be a potential steal if you’re a high-value portfolio-holder. And Halifax offers a decent range of stocks, funds, ETFs and ready-made portfolios.

However, A foreign exchange (FX) fee is added to all trades involving foreign currencies. If you buy a stock that trades in US dollars, for example, and your home account is in GB pounds, you’ll need to pay an FX fee.FX fees – which you’ll incur every time you trade a non-GBP asset – are an extraordinarily high 1.25%. They don’t reduce in value with the size of your trade either. That’s an high price to pay when you consider that Trading 212 charges just 0.15% for its FX fees.

Dealing fees on UK trades are also very high – £9.50 per trade. There is a way to avoid these fees, however, by signing up to a regular investing plan whereby you agree to pay money into your investment account every month. But this may not suit your investing style or strategy.

On the plus side, Halifax waives service fees for 18-25 year olds, so this could still be a very cheap option for existing customer if you’re young and not planning to buy and sell often.

Use this if

You already have a Halifax bank account and you’re happy to invest via the regular investment service – and only in UK stocks.

Fees

• Service fees

One flat fee of just £36 p.a.

• Dealing fees

£9.50 per trade for all UK assets (including funds!). Dealing fees can be avoided by setting up a regular investing plan, however.

£0 per trade for non-UK assets. However, a 1.25% FX fee will be applied to all these trades.

• Fund fees

Paid to the fund provider directly, these fees vary according to the fund you choose.

• Ready-made portfolios

Fees for a ready-made solution are £3 per month plus ongoing fund fees and transactions costs that range from 0.32% for a Cautious portfolio, to 0.37% for a Progressive portfolio. That’s considerably more than NatWest Invest charges for a wider range of ready-made solutions as this chart shows.

Account types

• General investing account
• Stocks and shares ISA
• Junior stocks and shares ISA
• Self-invested personal pension (SIPP)
• Cash ISA

Assets

• UK stocks
• US stocks
• European stocks
• Funds
• ETFs
• Bonds and gilts
• Ready-made portfolios

Clare says

It’s possible to keep costs low with HSBC if you adopt a buy-and-hold approach and only invest in funds or ready-made portfolios.

Ready-made portfolios are well-priced, costing between 0.45%-0.50% including fund fees, and for that, you’re getting some strong, high, historical returns (although past performance is no guarantee of future performance, of course).

However, there are some ridiculously high fixed-priced charges to watch out for if you’re investing in stocks or gilts: £29.95 – £39.95 per trade. Even the absence of any FX fees can’t make amends for those charges, especially if you’re a relatively small-scale investor.

There’s a headache-inducing separation of funds and stocks too with HSBC. You can’t hold both in the same account so you basically have to pick one asset class and stick with it, or life becomes very complicated.

Use this if

You’re an existing HSBC customer wanting a cheap ready-made investment portfolio with good historical performance.

Fees

• Flat service fees of £10.50 per quarter for investing in shares
• 0.25% annual fees for investing in funds
• No A foreign exchange (FX) fee is added to all trades involving foreign currencies. If you buy a stock that trades in US dollars, for example, and your home account is in GB pounds, you’ll need to pay an FX fee.FX fees
  No dealing fees on funds
• Minimum investment: £50
• Ready-made portfolios cost 0.45%-0.50% inc fund fees
• Very high dealing fees on UK stocks: £10.50 per trade
• Astronomically high dealing fees on EU and US stocks, and gilts: £29.95 – £39.95
• No interest paid on cash held in your accounts
• Fund fees: Paid to the fund provider directly, these fees vary according to the fund you choose.

Account types

• General investing account
• Stocks and shares ISA
• Investment trust account
• Self-invested personal pension (SIPP)

Assets

• UK shares
• US shares
• ETFs
• Ready-made portfolios
• Funds
• Bonds and gilts
• Investment trusts
• REITs

Clare says

Sadly, there’s little that I can find to recommend about Santander’s Investment Hub. It’s a decent range of funds, but you can find better selections elsewhere. Pricing is around average, meaning it’s possible to find cheaper elsewhere. And although you don’t need to be a banking customer to open an investment account, the process I had to go through to get an investment account open was overly lengthy and frustrating.

There’s nothing terrible about Santander, but nothing that makes me want to recommend it, either.

Use this is

You’re an existing Santander customer and you want a quick way to invest in funds.

Fees

Annual fees:

0.35% for the first £50,000 invested
0.20% on anything between £50,000 and £500,000
And, 0.10% on amounts over £500k

There are no dealing fees with Santander, which keeps things simple and means there are no ‘hidden’ costs. You will still incur ongoing fund charges with Santander funds and A ready-made portfolio is a pre-made collection of investments that have been put together by investment experts. They are designed to be a simple option for those who don’t want to choose individual stocks or funds for themselves.ready-made portfolios, however. These are paid directly to the fund provider from your investment.

Ongoing fund charges for the ready-made portfolios range from 0.34% – 0.49%.

Account types

• Stocks and Shares ISA
• Self Invested Personal Pension (SIPP)
• General Investment Account (GIA)
• Cash ISA
• Junior ISA

Assets

• Funds
• ETFs
• Ready-made portfolios