Accounts
At Freetrade, you can invest through an Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAEnterWordHere
ISA, 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
or 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 allowancegeneral trading account
.
Here’s how that measures up against other comparable trading platforms:
Assets
The first thing to note with Freetrade is that it doesn’t offer 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
within any of its products, meaning this is a platform solely for those happy to make their own investment decisions. There are also no mutual funds here – only 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. ETFs
.
If you’re comfortable building your own portfolio for your ISA, SIPP or general investment account, Freetrade offers access to a selection of:
- UK shares
- US shares (inc Fractional shares are portions of shares (or ETFs) that are smaller than one whole share. They are designed to make ownership of large, expensive shares more accessible. fractional US shares
) - European shares
- ETFs
- REITs
- Investment trusts
- Treasuries (a form of UK government bond)
- Over the Counter (OTC) shares
Freetrade offers investors a choice of 6,100 stocks, ETFs, and investment trusts. While that sounds like plenty to choose from, some of these assets are only available on the top-priced plan (see Fees section for details of which assets are available with each plan ).
If you were just planning to take advantage of the free Basic plan, do a search for the assets you want to invest in before signing up to check if they are available. I had a look for International Consolidated Airlines Group SA (IAG) which owns British Airways, and it wasn’t listed, despite the fact that it’s a FTSE 100 listed company.
Freetrade does make a point of saying they are always looking at suggestions from users for new stocks to add and have stated that their long-term vision is to make all listed companies globally available within the Plus plan. However, British Airways shares were promised some time ago by Freetrade and they have still failed to materialise.
With Freetrade, you’re getting an uncomplicated platform with fewer assets and fewer complex instruments than professional trading platforms like Interactive Brokers, Saxo Markets, and IG. As such, it doesn’t offer access to options, CFDs, cryptocurrencies or forex.
However, Freetrade does offer access to some leveraged ETFs through the Standard and Plus accounts. As leveraged ETFs are classed as ‘complex instruments’, Freetrade will ask you to take an appropriateness test, which you’ll need to pass before being able to trade these securities – something that’s required by regulators.
Freetrade has done an impeccable job of designing the menu of assets on offer. It’s a visual feast.
The opportunity to buy fractional shares will make Freetrade an attractive proposition to those looking to hold stock in some of the biggest US companies but who don’t have the budget for whole shares. It also gives Freetrade an advantage over some of the bigger, more established names (including interactive investor) who don’t currently offer them.
Stocks and Shares ISA
The Freetrade ISA received the best score in the Investors’ Chronicle’s ISA rankings and Freetrade was also voted Best ISA Broker for 2022 by Brokerchooser.
A Stocks and Shares Individual Savings Account (ISA) is a tax-efficient investment account that enables you to put up to £20,000 into stocks, funds, bonds, ETFs and other assets. ISAs are exempt from tax on savings interest, dividends or capital gains tax on funds. Withdrawals are also not subject to income tax. Read more about ISAs here.
To access Freetrade’s ISA account, you’ll either need to pay for a Standard account (from £4.99 per month), or upgrade to a Plus plan (from £9.99 per month), as it’s not available to those on the free Basic account.
It’s free to make a transfer if you already have an ISA somewhere and want to transfer it over. You’ll need to complete a form but Freetrade takes care of the rest for you. The transfer process typically takes four to six weeks.
Junior ISA
Freetrade does not offer a A junior self-invested personal pension (SIPP) is a way of investing money for your child’s future retirement, free from capital gains and dividend tax. As it is designed to be started before a child turns 18, it must be opened by a parent or guardian although anyone can contribute. Once the beneficiary turns 18, they take control of the account, however, the money within the account cannot usually be accessed until age 55 (rising to 57 in 2028 and likely to rise further)Junior ISA
product.
Cash ISA
Freetrade does not offer a A Cash ISA (Individual Savings Account) is a tax-free savings account where you earn interest without having to pay tax on it, allowing you to grow your savings more efficiently. cash ISA
.
Lifetime ISA
Freetrade does not offer a Lifetime ISAs (Individual Savings Accounts) (LISAs) are designed to help you save for your first home or retirement and come with an automatic 25% government bonus on all contributions up to the value of £4,000. There are stocks and shares LISAs – where you invest your savings – and cash LISAs – where you earn interest on your savings. You must be between 18 and 40 to open a LISA and all income, capital gains and interest earned within LISAs is tax-free, although these funds can only be used to purchase your first home or for retirement. Ensure you are familiar with the rules surrounding this account before utilising itLifetime ISA
.
SIPP
You’ll need to open a Plus plan (from £9.99 per month) to start saving into a SIPP as it’s not available on either the free Basic account or the Standard plan. You’ll also have to be confident enough to pick your own investments with Freetrade’s SIPP, and adjust your exposure to risk as you approach retirement age, as there are no ready-made portfolios here.
Freetrade won’t charge you to transfer a pension to them, but you may incur fees from your existing provider which Freetrade doesn’t unfortunately offer to refund, unlike a few other providers. (AJ Bell, for example, will cover up to £500 of transfer costs.)
One possible downside to opening a SIPP here is that Freetrade isn’t currently able to accept employer contributions. That means it’s not an option if you wanted your employer to pay into your SIPP.
Cash savings account
Freetrade does not offer a cash savings account.
Company account
Freetrade does not allow for accounts to be opened in limited company names so you can’t take advantage of more favourable capital gains tax rates or offset losses against personal income, as you can when investing through a limited company.
Joint accounts
Freetrade does not facilitate joint accounts.