The required minimum deposit at Freetrade is $0.
Freetrade Review 2020: Pros, Cons & How It Compares
At Starttrading.com, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.
The bottom line:
If the name hadn’t given you a clue, Freetrade’s big selling point is the price. Freetrade do not charge trading commissions. If you’re looking to limit your costs when trading stocks, Freetrade is a solid choice and great place to start investing in the stock market.
Pros & Cons
- Commission free trading.
- No account minimum.
- Streamlined interface.
- UK-regulated stockbroker. Your assets are protected by the
- Easy and fast account opening.
- Free Stock up to £200 when you sign up.
- Stocks & Shares ISA.
- Fees on Stocks & Shares ISA.
- Buying overseas shares incurs 0.45% fee.
- Currently limited to UK customers.
- No margin accounts.
- Cannot trade directly in mutual funds, bonds, options, or cryptocurrencies.
Compare to Similar Brokers
As the name suggests, Freetrade is a free-trading app that lets investors trade 600+ stocks & exchange-traded funds without paying commissions or fees. The free option is conditional and is available till the time you’re OK for your trades to be executed by the end of the day.
Even though Freetrade is a young brand, it is increasingly getting popular among young millennials. Largely due to the colourfully designed Freetrade app, as well as the website, targeted at their users.
Freetrade only offers mobile trading through their app and the platform is purposely minimalistic, which works well for new traders and investors. However some more seasoned investors may find the range of tradable securities and account options lacking.
Freetrade does not offer Margin trading. Their aim is to build “the best possible investment platform for our community”, meaning they want to empower their uses to “benefit over the longer term from the growth in the stock markets”. They beleive margin trading “along with other leveraged products like CFDs, aren’t suitable for long term investing, entry level investors or arguably most retail investors at all”.
This is something that the starttrading.com team agree with, risk management is one of the, if the the most important part of trading and can be difficult to implement correctly when trading on high leverage.
Want to learn how to trade? Enrol in our free online trading academy.
Freetrade is best for:
- Mobile users.
- Long term investors.
- Stocks and shares ISAs.
- Dividends investors.
Freetrade at a glance
Trading stocks are free at Freetrade.
All available ETFs trade commission-free.
Over 50 exchange-traded funds, including by Vanguard and iShares.
No annual, inactivity or transfer fees.
Your Stocks and Shares ISA costs a flat fee of £3/ month.
Freetrade blog, stats and insights.
No web based trading platform.
Mobile trading platform is purposely simple but meets basic investor needs.
Free simple sign up process, takes no more than 5 minutes.
Live chat, email, social media and FAQ.
Refer a friend who joins Freetrade and you both earn a free share of stock.
Sign up and claim you’re free stock now.
Freetrade trading fees
Yes, it’s true. Freetrade charges zero commission for UK stock and exchange traded fund trading.
What’s better than free? Freetrade’s commitment to providing 100% commission-free stock and ETF trades is admirable, and the savings for investors who trade frequently is significant. After all, every dollar you save on commissions and fees is a dollar added to your portfolio and of course your returns. Still, these days many big-name brokers also offer free trades, so it makes sense to compare other features when picking a broker.
New to investing? Learn more about how to buy stocks.
Freetrade Stocks & Shares ISA
Freetrade also seems committed to keeping other investor costs low. The Stocks & Shares ISA by Freetrade allows you to invest up to £20,000/year in a tax-efficient account.
Already have a ISA? Not to worry, Freetrade can transfer your excisting ISA to a Freetrade Stocks & Shares ISA, simply get it touch with their team and they will handle the rest!
Freetrade doesn’t have one, which means investors can get started right away. Of course, in order to invest, you’ll need enough to purchase the investment you have your eye on.
Wondering what it would be like to sit at home, reading by the pool, living off of the passive income that arrives in the form of dividend payments from companies they are invested in? Dividend investing allows you to create a stream of income in addition to the growth in your portfolio’s market value from asset appreciation.
Investing in stocks with Freetrade are eligible for Stock Dividends, allowing you to put your money to work and get the most out of your portfolio.
Ease of use
I’m sure you’re accustomed to using a smartphone — you’ll find the sign-up and account funding process quick and painless. It all happens within the app in a matter of minutes, with just a few quick questions that gather your personal information, contact details, National Insurance number and means of funding your account.
This could be a negative, as the service doesn’t offer all the bells and whistles of a typical online stock broker. But for beginners or investors who know what they want, the Freetrade platform is more than enough to quickly execute trades.
Both the mobile and web platforms also include a feature called collections, which are stocks organized by sector or category.
Want to invest in a particular sector? Or maybe you want to support a UK business. The Freetrade app allows you to search for specific stocks through a variety of filters, such as:
- Food & Drink
- & much more
Freetrade also has filters such as popular stocks and ETFs, newly added and the worlds largest tech giants.
Freetrade also offers a tab bar at the bottom of the app, which offers quick access to portfolio values, watch lists, transaction history and account statements.
Many brokerage customers understandably expect phone support, and they will be happy to find it here — Freetrade offers a variety of forms of customer support, through email, social media and even a live chat feature through the app. Customers are provided fast, friendly support from real humans.
However, Freetrade does not publish a phone number. It does have a useful and well-organized help center online, and the website is easy to navigate and transparent.
Lack of Margin availability
Freetrade does not offer Margin trading. Their aim is to build “the best possible investment platform for our community”, meaning they want to empower their uses to “benefit over the longer term from the growth in the stock markets”. They believe margin trading “along with other leveraged products like CFDs, aren’t suitable for long term investing, entry level investors or arguably most retail investors at all”.
Although this is a breath of fresh air and something we consider as a good move in reducing the amount of new traders/ investors suffering losses to their portfolio. The lack of options could cause the majority of experienced traders to look elsewhere to get access to make larger trades.
Mutual funds, Futures, Cryptocurrency and Forex aren’t supported. Freetrade also lacks an automatic dividend reinvestment program, which means dividends are credited to accounts as cash rather than reinvested in the security that issued them.
Freetrade currently lack the ability for users to buy fractional shares. That means you can pay as little as $1 for a portion of a share, even if that share’s full price is in the hundreds of dollars. This feature makes it much easier to build a diversified portfolio — you’re able to buy many more companies, even if you don’t have a lot of money to invest.
This is something that is offered by a growing number of online trading platform and something that Freetrade has stated they are looking to implement.
Is Freetrade right for you?
If a streamlined trading platform or the ability to trade stocks are important to you, Freetrade is a solid choice.
Whilst Freetrade does not have a lot of assets to trade on as compared to a full-service platform, it is still very popular among users. Millennial-friendly policies like mobile-only strategy, no minimum deposit, and commission-free service are its highlights.
Advanced traders may still not be attracted towards the service because of the lack of some important assets. Its services are mostly limited to the London Stock Exchange.
But now that plenty of online brokers have joined Freetrade in offering commission-free trades, casual investors can afford to shop for the broker that suits them best.