Always remember that investments can go down as well as up in value, so you could get back less than you put in. A rule of thumb is to hang on to your investments for at least five years to give them the best chance of providing the returns you are hoping for.

Best Share Dealing Accounts

Updated: Jan 2, 2022

Best Share Dealing Accounts

Contents:

Best Share Dealing Accounts

Compare some of the best share dealing accounts in the UK below. To make sense of the charges, use our share dealing charges comparison table.


Capital at risk. Other charges apply.

Interactive Investor - One free trade every month; Lots of research

Interactive Investor
Annual Platform Fee
£120 - £240
Dealing Charge
£7.99 - £3.99
Regular Investor Charge
£0

Interactive Investor has more than 40,000 investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. You get a free trade every month, which you can use to buy or sell any investment. The site has lots of expert ideas, research and insights, which can be helpful when choosing investments. Interactive Investor's services include Trading Account, Stocks and Shares ISA, SIPP and Junior ISA.

Capital at risk.

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eToro - Buy/sell cryptocurrencies; 0% Commission on real stocks

eToro Logo
Annual Platform Fee
£0
Dealing Charge
£0
Regular Investor Charge
£0

eToro is a multi-asset platform that offers both investing in stocks and crypto assets, as well as trading CFDs. It is entirely free to open an account with eToro, and all registered users receive a US$100,000 demo account for free. Withdrawals incur a fee of US$5, and FX rates apply to non-USD deposits and withdrawals. If you prefer to select a ready-made portfolio, eToro has over 40 fully allocated, balanced investment portfolios, focusing on market segments you can understand and to which you can relate. Some of the portfolios include BigTech, DividendGrowth, GoldWorldWide, Vaccine-Med, FoodDrink, BitcoinWorldWide, CyberSecurity, Diabetes-Med, Driverless, GigEconomy, Utilities and many more. These portfolios are a grouping of several assets, such as stocks, cryptocurrencies, ETFs, and even people, bundled together based on a predetermined theme or strategy. eToro does not offer an ISA or SIPP.

Please note: Cryptoassets are a highly volatile unregulated investment product. No UK or EU investor protection. Your capital is at risk. Additionally, 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

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Freedom24 - IPO stocks at initial price; Over 1,000,000 instruments

Freedom24 by Freedom Finance Logo
Annual Platform Fee
€0 - €2400
Dealing Charge
€0.02 - €0.008 per share
Regular Investor Charge
N/A

Freedom24 is an online trading platform by Freedom Finance offering access to over 1,000,000 trading instruments. Its unique value proposition is that it allows everyday investors to participate in IPOs directly, with as little as US$2,000. Freedom Finance Europe Ltd is the only EU-based stockbroker listed on Nasdaq, which allows retail investors to participate in "big name" IPOs (like Airbnb, Snowflake, Robinhood). Since launching in 2008 with the Facebook IPO, Freedom Finance has offered its 400,000+ worldwide clients participation in 250+ IPOs through an easy-to-use online platform. Freedom24 gives its customers access to over 1,000,000 trading instruments, including 35,000 stocks, 3,100  ETFs, 147,000 bonds, 855,000 options and 500 futures across 15 stock exchanges. Customers also have access to a free demo terminal which you can use to practice your trades before committing real money. In terms of pricing, Freedom24 has four service plans to choose from, with varying costs per plan. Freedom Finance (Freedom24) does not offer an ISA or SIPP.

Please note: Investments in securities and other financial instruments always involve the risk of loss of capital.

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DEGIRO - Cheap share dealing; 200 Commission-free ETFs

DEGIRO logo
Annual Platform Fee
£0
Dealing Charge
£1.75 + 0.014% (UK Stocks)
Regular Investor Charge
£0

DEGIRO is an award-winning investment broker that allows you to trade in stocks, bonds, ETFs, options, futures, warrants, certificates and more across 50 international exchanges. It offers tens of thousands of regulated financial instruments that enable investors to diversify their portfolios worldwide. With DEGIRO, you can invest in up to 200 commission-free ETFs. This means you may not have to pay a dealing charge when you invest in just ETFs (terms apply). Dealing in UK stocks costs £1.75 + 0.014% per deal, while US stocks cost €0.5 + $0.004 per share and Irish stocks are €4 + 0.05% per deal. To make sense of the charges, click here. DEGIRO currently has over 1 million customers across 18 countries. It is suitable for both beginner and advanced investors, and you can access the platform on any device via the web portal or mobile app. DEGIRO does not offer an ISA or SIPP.

Capital at risk.

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Fineco Bank - Commission-free trading up to £500; No platform fee

Fineco Bank Logo
Annual Platform Fee
£0
Dealing Charge
£2.95
Regular Investor Charge
£0

Fineco Bank is one of Europe’s largest banks, with 20 years of leadership history in brokerage and over 30 million orders processed every year. Access 26 global markets and trade over 20,000 financial instruments worldwide on a single low-cost account. Invest and trade directly in GBP, EUR, USD, Swiss Franc and 20+ currencies. Fineco Bank offers Trading Account and Stocks and Shares ISA. Capital at risk.

Promo: Apply with the link below by the 31st March 2022, and trade commission-free up to a maximum commission amount of £500. Terms apply.

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Hargreaves Lansdown - Lots of research, ideas and tips

Hargreaves Lansdown
Annual Platform Fee
£0
‍‍(Fund & Share Account)
Dealing Charge (Online)
£11.95 - £5.95
Regular Investor Charge
£1.50 per deal

Hargreaves Lansdown has thousands of investments to choose from, including UK and overseas shares, funds, investment trusts, and ETFs. It does not charge a platform fee on its Fund and Share Account but charges 0.45% (capped at £45) a year on its ISA and 0.45% (capped at £200) a year on its SIPP. It offers most products, including Fund and Share Account, Stocks and Shares ISA, Lifetime ISA, Junior ISA, and SIPP. These services are intended for investors happy at making their own decisions.

Capital at risk. Other charges apply.

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Stake - Commission-free trading; Fractional shares; Analyst ratings

Stake Logo
Annual Platform Fee
£0
Dealing Charge
£0
Regular Investor Charge
£0

Stake is a global commission-free brokerage that gives you access to 4,500 US stocks and ETFs via a mobile app and web interface. You can choose to upgrade to Stake Black to access more sophisticated features for US$9/month (or US$90 a year). Stake Free gives you access to all assets on the platform, unlimited commission-free trades, advance order types, and fractional trading. Stake Black gives you access to analyst ratings, price targets, full company financials, and trading on unsettled funds. FX rates apply to non-USD deposits and withdrawals. Stake does not offer an ISA or SIPP. Capital at risk.

Promo: Promo code: KOODY. Stake offers a free stock (Nike, GoPro, Dropbox or a mystery stock) for each new user that opens an account and funds it with at least £50 within 24 hours of opening the account.

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AJ Bell Youinvest - Cheap if you make 10+ trades a month

AJ Bell Youinvest
Annual Platform Fee
0.25%
(max £3.50 per month)
Dealing Charge (Online)
£9.95 - £4.95
Regular Investor Charge (Online)
£1.50 per deal

AJ Bell Youinvest has thousands of investments to choose from, including individual stocks and shares, funds, investment trusts, and ETFs. Share dealing is cheap if you make 10+ trades a month. AJ Bell Youinvest's services include Share Dealing Account, Stocks and Shares ISA, Lifetime ISA, Junior ISA, and SIPP.

Capital at risk.

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XTB - Speedy execution; Market order depth; Trading academy

Annual Platform Fee
£0
Dealing Charge
£0
Regular Investor Charge
£0

XTB is an easy-to-use, fully customisable European trading platform and one of the largest stock exchange-listed FX & CFD brokers in the world. It provides retail traders instant access to hundreds of global markets. With XTB, you can trade in stock CFDs, ETF CFDs, forex, indices and commodities. XTB also has an extensive library of educational materials containing videos, webinars and courses suitable for both beginners and experienced investors, which you can find here. When you sign up, you will have access to a dedicated account officer who will help you understand your needs and how XTB works. It’s free to open a trading account with XTB. Deposits in GBP and EUR are free of charge, but withdrawals below £60 have £12 processing fee. Inactive accounts also attract a monthly fee of €10.

XTB has offices in over 13 countries, including the UK, Germany and France, and over 315,000 customers worldwide. XTB does not offer an ISA or SIPP.

Please note: Contracts for Difference (CFDs) are leveraged products and carry a significant risk of loss to your capital, as prices may move rapidly against you, and you may be required to make further payments to keep any trades open. Between 74-89% of retail investor accounts lose money when trading CFDs. These products are not suitable for all clients. Therefore please ensure you fully understand the risks and seek independent advice.

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To make sense of the charges, use our share dealing charges comparison table.

What is Share Dealing

Share dealing or stock trading is a way to buy and sell shares in publicly listed companies.

Publicly listed companies are companies listed on a stock exchange, such as the London Stock Exchange or the New York Stock Exchange.

To trade shares, you need to open a share dealing account with an investment platform or stock broker. You can also use an Individual Savings Account (ISA), General Investment Account (GIA) or Self-Invested Personal Pension (SIPP) to trade shares


How to buy Stocks and Shares

There are two ways to buy stocks and shares. You can either buy individual company shares directly (through a stock broker) or invest in a fund (which pools money from you and other investors to buy lots of shares). 


Funds tend to be a cheaper and less risky way to invest in shares as you'll be spreading the costs and risks with other investors within the fund.

The first opportunity you'll have to invest in shares is when the shares are created and offered to the public for the first time. This is called an Initial Public Offering (IPO) or 'Going Public.'

Companies go public to raise money to fund their activities. 


Once shares are created, they can be bought or sold on the stock exchange. This is called the secondary market because it comes after the IPO.

Most investment platforms are online and will allow you to invest in stocks and shares regularly (e.g. £25 per month) or occasionally (e.g. a lump sum of £1,000).


Whether you choose to go online or offline, you need the services of a stock broker or share dealing platform to buy shares. Stock brokers offer three types of services - execution-only, advisory or discretionary. 


How to pick Stocks

Deciding what shares to buy can be intimidating for the first-time investor, but it doesn't have to be. We've summarised our top five methods below. Hargreaves Lansdown also has a free stock-picking guide which you can download here.


  1. Research: Investing in shares requires knowledge about the companies you are investing in. The best way to acquire such knowledge is through research. Websites like Morningstar, Hargreaves Lansdown, Interactive Investor , ADVFN and Citywire provide company news, financial research, analysis, and commentary.

  1. Economic Cycles:‍ The global economy will grow and shrink over time. When the economy is growing, most sectors tend to do well. But when the economy is shrinking and things aren't as rosy, only certain sectors continue to do well. Industries that produce or sell everyday essentials such as food, beverages and pharmaceuticals tend to do well in every economic climate. In comparison, industries such as retailing and aerospace that provide non-essential products or services tend to mirror the health of the economy. Understanding these cycles can help you decide what shares to buy and when.


  1. Future Predictions: If you can make predictions about how the world will change in the next 10 to 20 years and what industries are poised to benefit from this change, you can begin to invest in stocks and shares accordingly. For example, how will climate change affect energy companies and automobile manufacturers in the next 10 or 20 years? What changes do you anticipate in online retailing, financial services and healthcare?

  2. Favourite Brands‍: ‍It might be worth looking at and researching brands you know, love and use often. The world's biggest, popular and most loved brands tend to be the most profitable.

  3. Diversification: When picking shares, it is risky to invest in just one company. If the company gets into difficulty, you could lose all you invested. It is better to build a diversified portfolio. This means you should consider investing in multiple companies, across different industries and in various geographies. Most people, including experienced investors, use funds when investing. Funds give you access to a diversified portfolio, saving you the trouble of buying shares in multiple companies.

Share Dealing Charges

Share dealing platforms charge several fees for using their services. The main ones are the annual platform charge, dealing charge, transfer out charge and inactivity charge.


  1. Platform Charge: Share dealing platforms charge this fee for providing a platform for you to buy and sell shares. It can be a fixed fee or a percentage-based fee.


  1. Dealing Charge: It is also known as a trading fee. This is the fee for buying and selling shares or other types of investments on the platform. Discounts are usually available for regular investors.

  2. Transfer Out Charge: ‍It is also called an exit fee. It is the fee you pay for moving your investments from one provider to another.


  1. Inactivity Charge: Most platforms don't charge this, but those that do usually charge you for making less than a certain number of trades within a specified period.
  2. Stamp Duty: When you purchase UK shares, you'll pay a 0.5% Stamp Duty to the government and an extra £1 on transactions above £10,000. Stamp Duty on Irish companies is 1%. You do not pay Stamp Duty on AIM stocks or Exchange-Traded Funds (ETFs).


Tax on Stocks and Shares

When you sell shares or other investments, you may have to pay Capital Gains Tax if you make a profit (gain).

You may have to pay tax on:

  • shares that are not in an ISA
  • units in a unit trust
  • certain bonds (not including premium bonds and qualifying corporate bonds)


You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance.

This tax year, the capital gains tax-free allowance is £12,300. This means you won't have to pay tax on the first £12,300 profit you make from selling your stocks and shares.

Additionally, the first £2,000 you receive in dividend is tax-free.

Stock Market Terms

Here a few common stock market terms you should know:


  1. Bid Price: The price you can sell a share.
  2. Offer Price: ‍The price you can buy a share.
  3. Bid-Offer Spread‍: The difference between the bid and offer price.
  4. FTSE 100: ‍An index of the 100 largest companies on the London Stock Exchange (LSE).
  5. FTSE 250: ‍An index of the next 250 largest companies on the LSE.
  6. FTSE All-Share‍: ‍An index of all shares listed on the LSE's main market, including all shares in the FTSE 100, FTSE 250 and FTSE Small-Cap indices.
  7. Dividend‍: A dividend is your share of a company's profit. When a company whose shares you own makes a profit, they might send some of it to you. This is called a dividend.
  8. Dividend Yield‍: This shows you the portion of a company's share price paid out in dividends. It is calculated as the dividend per share divided by the price per share. For example, if a company paid a dividend per share of 7p and the share price was 100p, the dividend yield would be 7%.
  9. Market Capitalisation: Also called market cap. This is the value of a company based on its current share price. It is calculated as the total number of a company's outstanding shares multiplied by the current share price.
  10. Price to Earnings Ratio‍: You can use this ratio to compare similar companies. A lower PE ratio could imply that a company is of better value. But it could also highlight a company with poor future prospects. It is calculated as the share price divided by the profit per share.


Frequently Asked Questions

1. What is a share?

A share is a unit of equity ownership of a public company. When you buy a share, you own a small unit of a public company.


If you bought a share in Apple, for example, you would become a part-owner of Apple. If it performs well, you will benefit from its success. If it doesn't, you may lose some money. 


Companies issue shares to raise money to fund their activities. People invest in shares to benefit from the successes of companies they believe in. 


You may also come across the word stock or equity. In most situations, stocks, equities and shares refer to the same thing. Stocks could also mean all your shares in one or more companies.


2. Why invest in stocks?

Investing in stocks and shares can be a great way to grow your money and can offer you higher long-term returns than leaving your money in a savings or current account. There are two ways you could benefit from investing in shares:


  1. Capital Gains
    If the company performs well and the value of your shares rises, you'll make a nice little profit if you choose to sell your shares at the new price. This profit is called a capital gain.

    Here's an example: Suppose you bought 100 shares in a company at £10 per share (usually listed as 1000p). The total value of your investment will be £1,000. If the price of your shares rises to £12 and you decide to sell your entire shareholding, you'll sell it for £1,200, making a capital gain of £200.

  1. Dividends
    You might also receive regular income from the companies you invest in when they make a profit. This income is called a dividend. A dividend is your share of a company's profit. 

    Suppose the company in the example above paid you a 5% dividend before you sold your holding. You would have received an income of £50. This would bring your total gain (dividend and capital gain) to £250.

    Additionally, as a shareholder, you might receive shareholder perks (such as discounts on the company's products or services) and opportunities to attend and vote at shareholder meetings.


3. What is the stock market?

The stock market is a marketplace where shares and other assets are bought and sold.


There are several stock markets around the world, and in the UK, the main exchange is the London Stock Exchange (LSE). The LSE offers trading in shares from big names you'd have heard of, such as Vodafone on its main market to smaller companies such as ASOS listed on the Alternative Investment Market (AIM), its junior market. 


Anyone can buy shares on the London Stock Exchange, but you need to go through a stock broker.


4. What is a market index?

An index is a group of shares of companies representing a particular market segment. These companies are usually grouped by size and value. 


In the UK, the main indices are the FTSE 100 (an index of the 100 largest companies on the LSE), the FTSE 250 (an index of the next 250 largest companies) and the FTSE All-Share (an index of all shares listed on the LSE's main market).


Indices are used as benchmarks to gauge the movement and performance of market segments. For example, the FTSE 250 can be used to gauge the fortunes of the UK economy.


5. Why do stock prices change?

Share prices are initially set by the company issuing the shares and subsequently determined by demand and supply. 


Demand means the number of people who want to buy the shares, and supply means the number of people who want to sell. While there is no perfect equation that tells us exactly how share prices will behave, several factors can affect demand and supply, such as:


  • The company's financial performance;
  • The health of the UK or global economy;
  • The company's operations such as changes in its top-management or business strategy;
  • The competition. For instance, if fizzy drinks are struggling, it could mean people are drinking something else, perhaps healthier drinks. So, companies that produce healthy drinks could be in line to profit.

6. What is the best online stock trading site for a beginner?

Here are some of the best online stock trading sites for beginners in the UK:

  • Interactive Investor - One free trade per month; lots of research and tips
  • Stake - Free trading; fractional shares; analyst ratings
  • eToro - Buy/sell cryptocurrencies; 0% commission on real stocks
  • DEGIRO - Cheap share dealing; 200 commission-free ETFs
  • AJ Bell Youinvest - Mid-price range; lots of ideas, insights and tips
  • Freetrade - Free trading; fractional shares


7. What is the best share dealing account in the UK?

Here are some of the best share dealing accounts in the UK:

  • Interactive Investor - One free trade per month; lots of research and tips
  • eToro - Buy/sell cryptocurrencies; 0% commission on real stocks
  • Hargreaves Lansdown - Lots of research, insights and tips
  • Freedom24 - IPO stocks at initial price; Over 1,000,000 instruments
  • Fineco Bank - No platform fee; cheap share dealing + promo
  • XTB - Speedy execution; market order depth; trading academy


Use our share dealing charges comparison table to get a sense of how each platform charges for regular investing and ad hoc share trading.


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Credits

  1. Gov.uk
  2. The London Stock Exchange

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