Best platforms for smaller portfolios

Clare says

Freetrade does exactly what it says on the tin – offers free trading (and investing). If it serves your needs in terms of the investment assets they offer, and you stay away from US stocks where FX fees are on the high-side, then it’s possible to open either a general investment account or a Stocks & Shares ISA and buy and sell investments for zero fees. That’s no account fees, no subscription fees, and no trading fees.

That only applies if you stick with the free ‘Basic’ account, however. There are two other account types: Standard (£4.99 p/mo) and Plus (£9.99 p/mo). These come with better rates of interest on uninvested cash, lower FX fees (making US stocks more affordable), and access to mutual funds. But as these are flat-fee subscriptions, they are expensive if you’re only investing small amounts.

It’s the free account that makes Freetrade a staggeringly cheap way to build up an ISA or general investment account.

Use this if

You only want to invest in UK or European shares or ETFs, and you’re looking for a free, simple Stocks & Shares ISA or general investment account.

Fees

• Basic account is free
• Unlimited, commission-free trading
• Free ISA
• Very cheap if investing in UK stocks or ETFs
• Account minimum: £1
• Need to pay for an account to access
  A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSIPP
• FX fees a high 0.99% on free Basic account – makes buying US shares expensive

Account types

• General investment account
• Stocks & Shares ISA
• Self-invested personal pension (SIPP) – only available with Plus account (£9.99 p/mo)

Investments

• UK, European and US shares
• Fractional shares
• ETFs
• REITs
• Investment trusts
• Treasuries (a form of UK government bond)

Clare says

InvestEngine regularly appears on our lowest-cost recommendation tables. There’s a no-charge Stocks & Shares ISA, a no-charge general investment account, and it is one of only two providers (the other is Prosper) to also offer a no-charge A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSelf-Invested Personal Pension (SIPP) (ETF costs and charges still apply, as they do with every provider).

Essentially, if you’re wanting a very low-cost personal pension or ISA, InvestEngine is definitely one to consider.

Where you might find a problem, however, is in its range of investment options as InvestEngine clients can only invest in Exchange traded funds (ETFs) are traded in much the same way as stocks. Instead of an individual stock, however, you own a basket of different assets which track the performance of a particular index or market. Exchange-Traded Funds (ETFs). ETFs have lots of positives: low cost funds, ready-diversified portfolio with one click, less time-consuming to research than stocks, a great option for many beginners and those who want a hands-off investing experience. But they won’t be right for everyone.

In terms of other possible costs? As there are no individual stocks on offer, you don’t have to worry about 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.currency conversion costs. There is a charge if you want your portfolio managed for you, but that’s a very reasonable 0.25% per annum. Fund providers levy fees for investing in their funds, but these fees are taken directly from your investment, and are to be found across the board at all providers. Plus InvestEngine makes a point of offering some very low-cost ETFs, starting from just 0.03% per year.

You will need at least £100 to get started though, considerably more than many other providers ask for.

Use this if

ETFs appeal to you as a ready-diversified, easy investment option and you have at least £100 to get started.

Fees

• Zero account fees on ISA, SIPP, GIA and Business Account
• 0.25% p/yr managed portfolio fee
• Fund fees (applicable whichever provider you use) start at just 0.03%

Account types

• General investment account
• Stocks & Shares ISA
• Self-invested personal pension (SIPP)

Investments

• Exchange-Traded Funds (ETFs)
• Ready-made portfolios

Clare says

Robinhood is undoubtedly a very cheap platform on which to trade US stocks. Possibly THE cheapest. The only fees you’re really paying are the 0.03% “third party” fees to convert your GB pounds into US dollars when you deposit money, and visa versa when you withdraw it again (- all funds must be held in US dollars on Robinhood).

The major downside, however, is that there is currently no Stocks and Shares ISA, so you can’t protect your investment income from tax. There’s also no personal pension account. And there is no alternative to buying US stocks at present either: no ETFs, no mutual funds, and no stocks from the UK or rest of the world. So, that’s pretty limiting.

But US stocks is where it’s at for you, then this is possibly the cheapest place you’ll find to buy and hold them.

Use this if

You want to trade US stocks as cheaply as possible.

Fees

• Zero-commission trading
• No account fees
• No FX fees on trades
• No withdrawal fees
• T0.03% fee is an extraordinarily low rate for exchanging currencies at deposit and withdrawal

Account types

• General investment account

Investments

Clare says

If you look at our charts ranking providers from cheapest to most expensive below, you’ll notice that XTB only appears when you’re investing in UK stocks.

When just looking at UK stocks, XTB is undoubtedly cheap. But if you’re investing in non-UK assets, you’ll need to factor in the 0.50% currency conversion (FX) rate that’s around about average (0.50%) which pushes costs up.

If you can avoid the FX fees though, it’s a free account. There are no account fees, there’s no commission to pay when buying or selling investments (unless you’re trading over EUR 100,000 per month!), and no withdrawal fees.

XTB is has traditionally been a trading platform, so it is more complicated to use than the investment-focused platforms. That’s because, with a trading platform, there will be a wider range of tools for those trading more complex instruments to use. If you’re a beginner, that can make the platform feel confusing and overwhelming.

Having said that, XTB has done much in recent months to make it a more comfortable space for investors too. There’s a separate price list for those just interested in stocks and ETFs, which is a great idea, as once pricing involves CFDs, options or futures, things become a whole lot more confusing.

Use this if

You want to invest in UK stocks for free

Fees

• No annual account fees
• 0% commission for buying/selling stocks & ETFs (unless you invest over £100k per month)
• 0% commission for trading CFDs
• 0.5% FX fee
• Not always the tightest spreads
• Inactivity fee: £10 per month after 12 months of inactivity

Account types

• Stocks and Shares ISA
• General Investment Account

Investments

• UK stocks
• US stocks
• European stocks
• Rest of World stocks
• ETFs
• Fractional investing
• CFDs
• Forex
• Commodities
• Indices
• Cryptocurrencies

Antonia says

Prosper is a relative newcomer, having only launched in 2021, but it’s made waves with a refreshing proposition that includes zero fees on ISAs and – very unusually – also A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSIPPs.

Even more unusually, there are 30 funds where Prosper will refund you the fund fees, meaning this can actually be a completely free ISA or SIPP. This differentiates Prosper from InvestEngine, where fund fees still apply although it must be said that fund fees can be kept very low (funds start from 0.03% at InvestEngine) and the fees come straight from your investments so it’s not an upfront cost.

You can start investing from just £1, and there’s a good choice of funds (190+) including 25 ready-made portfolios. You won’t be able to stock pick here, as the only investment options are mutual funds and ETFs. But, that’s if you’re wanting to keep it simple, that’s plenty, and it’s slightly more choice than InvestEngine offers (just ETFs).

Prosper is also refreshingly transparent over how they make their money (they keep the interest on any uninvested cash you keep in your account), so you’re not left worrying about whether it’s too good to be true.

Use this if

You want a completely free ISA or SIPP and you only have small sums to get started with.

Fees

This is as good as pricing gets.

• No-fee ISA
• No-fee SIPP
• No-fee General investment account (GIA) is an account designed to provide access to investments. You may be liable for tax on any income or capital gains earned within a general investment account but this can be a useful vehicle for anyone who has maxed out their ISA allowanceGIA
• 0.17% – ready-made fund management charge is very low
• 30 funds are free of ongoing fund charge making it totally free to invest

Accounts

• Stocks and Shares ISA
• Self-invested personal pension (SIPP)
• General Investment Account
• Savings accounts

Investments

• ETFS
• Mutual funds
• Ready-made portfolios