Freetrade Review: Perfect For The Beginner Investor

This is a 2020 review for the UK based mobile app Freetrade that lets you invest from the comfort of your own phone in companies from all over the world. If you already have a good idea what Freetrade is all about and are looking to open an account, you can get a free share worth up to £200 by using one of my Freetrade sign up links! Head over to the Free Shares section of the website to see the current links or check the links at the bottom of the page. Alternitavely you can email me for a unique code via email at info@moneymagma.com.

What Exactly Is Freetrade and What Do They Do?

Freetrade are an app based investment platform that lets you invest in companies from all over the world in varying markets. The app is available on the Apple App Store as well as the Google Play Store and is free to download. Freetrade are a commission-free investment platform meaning that when you purchase stocks or shares through them you don’t pay any fees in order for the transaction to take place. This helps you save money as beginning to invest with larger investment firms will usually mean paying a high commission fee to the provider. As far as ease of use for setting up an account goes it’s really simple and easy to do.

Available Freetrade Accounts

There are a couple of types of account you can open with Freetrade currently, one of which being an ISA account, commonly known as a Stocks & Shares ISA. This account entitles you to deposit £20,000 a year with tax-free capital gains (the money you basically make from any investment). This type of account however does incur a small monthly fee of £3 to manage the account and if your new to investing and looking to really contribute some cash into stocks and shares then this will be the account for you.

The other type of account is a General Investment Account (or GIA for short) and is what I currently have open with Freetrade. This type of account doesn’t have any monthly fees or charges for buying or selling shares of a company, so it really is as free as you can get in the investment world. However this account doesn’t have the tax efficient wrapper of the Stocks & Shares ISA so if you end up investing a decent amount into the account you will need to pay tax on capital gains from your investments large or small.

There is however a new product being offered by Freetrade called Freetrade Plus. This costs a bit more to have an account at £10/month, however a Stocks & Shares ISA is included for the price and you get access to even more variety of stocks, shares and ETFs.

Is Freetrade Right For Me and My Personal Financial Goals?

So this is something that you will need to decide for yourself when choosing a platform to use, it gets slightly confusing in the investment world and ease of use is paramount, that’s exactly what you get here. The app is very easy to navigate, it’s sleek and clean in every way that makes it perfect if you’ve never bought a share in a company before. The app has a main page showing you all of the investments you have and how they’re performing in real time when the markets are open. There are great discovery avenues for finding the right stock or share, as well as a search function. Want to invest in Unilever? Search it up and buy a share.

Adding funds is really simple and is done by means of a direct bank transfer on your phone, it’s really one of the easiest experiences I have had transferring money on my phone. The funds do take an hour or so to clear though so you need to keep this in mind, as available funds become free to purchase with though you will get a notification telling you that your money has been added to your account.

The graphs used in the Freetrade app are also great, instead of the janky and sharp graphs of other providers such as Trading 212 there are nice free flowing curvy graphs helpinganyone new to investing understand that the value of investments goes up as well as down.

Lets Talk Security

Security is something not a lot of people talk about and it is really important. Security doesn’t just mean having a pass-code on your account, it means making sure your money is protected in the event that Freetrade stopped being a provider due to insolvency (highly unlikely). They have modern encryption and fingerprint recognition however I think there are two more important things to note.

The two things you should look for when choosing a provider for your investments here in the UK, one is making sure they are registered with the Financial Conduct Authority, and wouldn’t you know, Freetrade are indeed registered with them. At the end of the day, they must as it’s the law, however there are a few providers who are NOT registered so stay away from them. The next is making sure that they are part of the FSCS scheme (Financial Services Compensation Scheme). This means that if the company in question (being Freetrade) were to stop trading and declare bankruptcy then your money in your account would be covered up to the value of £85,000. That’s a lot of money! Freetrade has both these protections so you’re safe to trust them with your money if you decide to.

Fees When Buying Shares

Remember when I said that it was free to use the service with a general investment account? Well there are however some fees that come into play due to the UK government and Foreign Exchange Rates, let me explain. If you’re buying UK shares then you will need to pay a 0.5% stamp duty tax on the total value of the shares or funds that you purchase. When bought electronically this is called Stamp Duty Reserve Tax (SDRT) however if the transaction is above £1000 you will pay normal stamp duty. This is something I will go into more detail with in a future article.

If you’re purchasing stocks and shares from the United States for example then you will need to factor in a 0.45% FX fee when you purchase any US stocks. This is usually factored into your price so what you see on screen when purchasing these shares is what you’ll pay.

The Verdict On Freetrade

I am really enjoying my time using Freetrade, and although I am using multiple platforms for my investments I will be using Freetrade more often to diversify my investments and not have all my eggs in one basket. For people looking to invest for the very first time then this is a no brainier, download the app and get started today. The app is packed full of great stocks and funds to get involved in and is the easiest platform to understand for beginners. Honestly it’s so user friendly that it meets my motto of everyone and anyone can invest in the stock market, now you can too.

Looking for some free shares with Freetrade? Looking for a Freetrade Promo Code? If you sign up with one of the links below you will receive a free share worth up to £200 just for opening an account. All you need to do is click the link, sign up and complete a US tax form (this is done automatically for you in app you just need to check it and submit). Happy investing!

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