FreeTrade Review – The best Commission-free stock trading and investment app

Freetrade is an online trading service that started in the UK in 2016. It provides commission-free trading in stocks and is safe as it is regulated by the top tier regulator FCA. But should you choose this service over the others when others have been into business for so long? How does it compare with other services? Here is a detailed overview of Freetrade so you can have a better idea of why and when you should use it.

What is Freetrade?

Free trade was founded in 2016 by Dodds and Davide Fioranelli for the sole purpose of making stock trading easy and at the same time taking ownership of stocks affordable. They used to work in KPMG, a corporate finance firm from which they gained experience.

There isn’t much going on with the service as of yet as you don’t get all those extra features like precise calculations and speculations as offered by other services like Trade212 and Lansdown. However, they are implementing more analytic data such as Dividend yields, market caps. P/E ratio.  But what this service is known for is its low-cost trading account. The USP is that it allows you to trade with real shares with no commissions or any kind of fees. This helps those people who build a portfolio who find investing a large sum of money as a risk. Because you can start trading with only one pound, it is considered risk free.

You only need a Smartphone app to get started and the best thing is that you can even hold your shares in the ISA to keep yourself tax-free, Currently, they have a user base of 250000 and increasing.

How does it work?

In case you are using your trading platform, it can be expensive. The traditional platforms like Landsdoen and Its investors focus more on funds thereby increasing the cost of maintaining and trading stocks. But if you look at Freetrade, it is solely share based. It is extremely convenient to build a portfolio with just one pound of investment.

With free trade, you can invest by purchasing shares of companies in the UK as well as the US. It also has the option for exchange-traded funds. For a basic trading account, you only have to pay the basic stamp duty. If you want to hold your shares in the ISA, it will cost you three pounds a month. For depositing money, you can either set up a bank transfer or you can use your credit card to make direct payments.

It is recommended to use google pay as it will be instantly transferred. For bank transfer, you may have to wait for a while. For withdrawals, you can always transfer your funds to the same account you used with Freetrade and your funds will be transferred within 5 working days. If you urgently need to withdraw, you can pay an additional five-pound and withdraw instantly. Do remember that you will have to request before 5 pm and for solid investments, you will have to wait until the settlement of the case.

How to set up a Freetrade account

Opening an account with Freetrade is fairly simple. It has a detailed website that has all the information you are going to need to register your account. But you cannot register on their website. The only way to register is through your Smartphone. You can easily download the app from the Android play store or App store for apple. Registering your account and setting it up only takes minutes. This shows the developer’s intentions. This platform is only intended for those people who want to manage their money through their app. Just start by registering through your email and you will be sent a verification code to activate your account.

The next step would be to enter your personal details like your address, name, DOB, Insurance number, etc. You can link your bank account to transfer funds and also have the option to use Google pay or Apple pay. This app also allows you to search for ETDs and stocks and you can also see the variation in prices based on their weekly, daily or monthly report. When you invest your money, you can monitor your portfolio to see how it is performing and easily buy and sell stocks. The interface is simple and intuitive and can be deemed to be user friendly. It is also very informative as it shows what the share price is and how much stock you receive based on your investment.

Freetrade features

• Freetrade offers commission-free trading which means it is easy to go from one to ten and ten to a hundred pounds in no time. Freetrade won’t charge you anything for shares. This is a DIY investment that returns to you fully.

• The best thing about free trade is that it allows you to start with just one pound with minimal risk.

• Allows you to invest in major companies like Google, Facebook, and other giants.

• You can have dividends and interests free of tax by holding your funds in the ISA. Even if you have a previously existing ISA account, you can still transfer that ISA money to your current account.

• The free share feature allows you to have shares in the company worth three to over three hundred pounds if you refer a friend on the Freetrade platform. This is a way to have more users for this platform and for retaining them. This also allows users more opportunities to go for high flying stocks.

• Some companies provide perks to their shareholders. You can expect to get some discounts on their product if you can earn a specific amount. This is a nice way to save.

• The basic account that you get with free trade is free and it allows you to sell or keep shares. If you want a service from which you can get tax free dividends, then Freetrade is the best choice.

• Comes with Free trade plus service. This is a subscription that allows you to have access to more high flying stocks. It also comes with additional beneficial features. For example, it has priority alerts and stop-loss features which prevents you from losing more money than you earn.

How does Freetrade make money?

One must ask if it is all for free, how does Freetrade itself make money. For sure it is not a charity. The basic service is free but they earn their part from their monthly fees from optional subscriptions such as:

• Freetrade ISA, £3/month

• Freetrade Plus, £9.99/month

• A fee of 0.45% of the Base FX rate on each US order placed  (The standard FX rate is 1.50%)

• A small amount of interest earned from banks on customers’ cash

As a rough comparison, other brokerages can charge a 1% annual management fee for an ISA account. 

Freetrade is current £36 a year 

A portfolio of £5000 with another brokerage could be £50 (this is only going to get more expensive as your portfolio grows eroding your tax free gains)

Freetrade commission

Freetrade is quickly becoming one of the UK’s best online apps for trading. The app is hassle-free and simple to use. It’s great for the youngsters and the masses as well. One thing that sets this app apart from any other trading platform is that it is commission-free. No commission is charged while buying or selling shares from Freetrade.

In addition, it offers over 1000 stocks and ETFs (Exchange Traded Fund) free of commission. ETF comprises securities that are traded like stock exchanges. It’s similar to mutual funds. However, ETFs are sold and bought from other owners during stock exchanges all through the day. But with mutual funds, the trade starts after the market is closed.

Through Freetrade, you can buy shares and sell them with a profit. The app’s popularity is growing at a fast phase, especially with the influx of retail investors. If you are new to stocks and investment, this app would be great for you. Furthermore, the app is mainly built keeping the youngsters in mind.

Unlike other trading platforms, accessibility is hassle-free and straightforward. Anyone can use it without any issue. Note that this app does not offer advice on financial services. So, with freedom comes the responsibility to invest in the right stock.

Freetrades broker

Freetrade is a trading app that runs solely on a mobile phone. It allows easy access to any user, making it a user-friendly app for trading. The app currently doesn’t work on the web platform, but the company is working on it. So, in the coming years, you might be able to access it through the desktop.

There are various aspects to consider while looking for a good broker service. First, it should be user-friendly along with easy accessibility. In addition, it should have good customer service and low fees. It should also have a low minimum deposit.

Also, opening a new account process should be simple. Furthermore, one of the most important aspects is safety. You should see how secure your account is and if the authorities regulate it.

With that said, Freetrade broker is an excellent app for the beginner. It’s a mobile-based trading app that offers ease of use. It’s a simple two-step login process and has a good function for searches. The account opening process is fast and fully digital. As a broker service, Freetrade offers a multitude of features along with safety.

Freetrade is regulated by UK’s FCA (Financial Conduct Authority). It is an investor protection scheme that offers protection if a broker becomes inoperative. In addition, the customers under Freetrade are protected by the FSCS (Financial Services Compensation Scheme).

The scheme provides a protection amount with a limit of £85,000. Freetrade is a trusted broker that ticks all the excellent prospects of being a trusted trading platform.

Freetrade fee

Freetrade is free of charge when it comes to trading stocks and ETFs. In addition, it also doesn’t have withdrawal fees. Initially, it only had free charges for basic orders. However, starting from February 2020, it cancelled commission on instant orders too. Basic orders are available only after the market is closed. With instant order, you can place it when the market is up for operation.

Furthermore, it offers the lowest fees for trading in ETFs and stocks in the US and UK. Also, it has low costs for non-trading as well. Freetrade doesn’t charge inactivity fees. There is also a no-account fee for a basic account. However, if you choose Freetrade Plus, you will have to pay a monthly fee of £9.99. But with this account, you get more stocks options, priority customer service and limited options.

Overall, Freetrade offers a good bargain. It doesn’t have a withdrawal fee but is chargeable if you withdraw on the same day. It will cost you around £5. The charges might be higher as compared to some rival companies. However, one cannot deny the fact it also offers exciting features.

Freetrade referral

Freetrade comes with a multitude of features where some might help you to make money. For instance, you could earn a free share worth up to £200 if you signed up to Freetrade through a referral link. In addition, the person who referred you also will get some of the free shares.

Furthermore, you don’t have to be a YouTuber or an influencer to be able to refer friends to Freetrade. The feature is available for anybody that signs up for this app. In addition, it is also currently unlimited. You share the referral link with as many friends as you want.

And to do this, the process is simple and easy. First, you need to go to the home page of the app. There you will see the overall portfolio. Next to the portfolio, you will see a free share button at the top right corner. You can click the free share button and then click on the send free share button. With that, you will get multiple ways to share the link.

In addition, you should be able to activate the free share. The person that you have referred should sign up with at least £1 to activate the reward. It’s a great prospect to make money and without any limits. Some people might find it sceptical, but it’s an excellent way to earn money or shares through referrals.

Along with the low cost and free commission, Freetrade offers you an easy way to earn money. You can send the referral link to your friends or relatives, where both parties will equally get free shares. For beginners, this would be an excellent way to start your investment journey. Through a referral, you can begin earning shares and sell them when the price is higher. It can be a slow process, but it will all be worth it eventually.

Furthermore, with Freetrade, you don’t have to worry about fees. It’s low both for trading and non-trading. In addition, it’s a trustworthy investment platform that is regulated by high-tier authorities.

Freetrade minimum deposit

Freetrade comes with no real minimum deposit as the actual limit is £1. Along with free withdrawal, you can open an account without having to pay any amount. Any traders would find this feature interesting and profitable too. In addition, you also don’t have to worry about account creating process. It’s fast and fully digital! Also, one of the significant aspects of this app is that it is user-friendly.

Anyone can create an account without any hassle. You can deposit without having to pay any fees. Furthermore, you can deposit or withdraw through Google pay, Apple pay or bank transfer.

For withdrawal, Freetrade doesn’t charge fees for the non-same day withdrawal option. However, if you choose same-day withdrawal, you will have to pay a fee of £5.

Furthermore, you cannot withdraw through a debit card. It is only possible through electronic wallets and bank transfers. Unlike other brokers, it gives you the option to withdraw through electronic wallets. Also, it will take two days to withdraw through bank transfer.

Also, withdrawing money from Freetrade is an easy process. You need to log in to the trading app and go to the account tab. With that, click withdraw and type the amount you wish, and then you can proceed with the withdrawal.

It also offers you the option to open four different types of accounts:

• General investment account (GIA): This account is mainly for ETF and stock trading. There is no monthly fee, and the order types can be both basic and instant.

• Investment saving account (ISA): It’s a saving account with tax efficiency. You can trade both ETF and stock along with fractional shares. However, you have to pay a monthly fee of £3, and the order type is only basic.

• Freetrade Plus account: It is a new account, and under this, it offers different product portfolios and types of orders. However, it comes with a cost. You will have to pay £9.99 per month. But on the good side, you can trade both GIA and fractional shares. It is also tax efficient like ISA.

• SIPP (Self-invested Personal Pension) account: It is an excellent retirement saving account for pension savings. SIPP comes with a monthly fee that will cost £9.99 per month. Also, the product its offers are both GIA and fractional shares.

You can choose any account that suits your requirements. The step to creating the account is easy and will take only ten to fifteen minutes. However, you should note that it doesn’t accept credit cards. It only accepts debit cards for deposits.

Also, Freetrade only has a single base currency. It is only through GBP (Great British Pound). Unlike other brokers, it trades only through a single currency. So, if you have a bank account with a different currency, there will be a conversion fee.

But there is a way to avoid the conversion fees. You can open a multi-currency bank account through a digital bank. Digital banks offer accounts with different currencies along with reasonable exchange rates. In addition, you also get free or low-cost bank transfers for international transactions.

Is Freetrade safe?

If you are worried about the safety of your money then stop. This service is regulated by one of the top tier regulators. There is no question of your money going anywhere except trade.

The financial conduct authority (FCA) makes sure that each customer is treated fairly. If you have complaints, you have the option to complain to the platform as well as the financial ombudsman service in case your issue is not resolved.

It also acts as principal secured financing because your assets are protected up to the value of 85000 pounds by the U.K. financial compensation scheme (FSCS) in case the platform becomes insolvent/bankrupt like all major banks.

Other losses that occur through unsound decisions are not covered i.e. you keep buying high and selling low.

There is a segregation of funds ensuring that freetrade cant use its client’s funds to pay creditors.

UK-listed stocks or ETF’s are held in CREST which is the UK’s central security depository which again prevents creditors from accessing your assets to cover freetrades debts.

US-listed stocks are held by a third party security and exchange commission(SEC)-registered broker under the depository trust & clearing company (DTCC) again keeping your assets separate and secure.

 

Pros

• The Freetrade platform is very easy to set up where you can very easily invest your money securely in the stock market within a matter of seconds because of the fast and simple process.

• The user interface is very user-friendly and the app is designed to be very simple.

  

• The app is very well organized and is arranged in easy to use five sections which include your insights, portfolio, information on stocks and ETFs, and where your money is going.

• Unlike other traditional stock trading, this does not cost you anything. Furthermore, it doesn’t have any commission, so you can increase your profits fast.

• A growing list of international stock options as well as IPO’s.

• It allows you to hold your shares in the ISA where you can be free of all taxes.

• It has a huge community where users can learn from the experiences of other traders.

Cons

• The biggest risk of trading with this platform is that it is easy to lose a lot of money without even knowing.

• There is not any kind of detailed information or warnings regarding stocks.

• Part of this has to do with the easy to use interface. It is very easy to buy and sell shares with this platform that it almost becomes like an addictive game.

• While the figures are decreasing, one doesn’t realize how much money he is losing.

• There is no trading limit to stop overspending like on most gambling websites.

• There is little to no research tools available for the user to analyze his place in the market and the condition of the stocks.

• There is nothing to tell neither you about how the stocks are progressing nor any news page where you can have an update about the companies.

• It is all share-based and there are no funds. Funds can diversify shares but in Freetrade you are only limited to stocks.

• Freetrade only has companies enlisted in the UK and US which means that you are left out of all other companies from Europe.

Free trade is essentially ETF and stock trading. While it is easy to maintain and open an account and trading seems effortless, it doesn’t have any protection from over-trading neither it provides many tools to analyze the stocks. Furthermore, cards are available only for deposits and not withdrawals.

Free trade ISA

When you are investing, there is always more risk of loss than profit. Couple that with tax laws and commissions, brokerage fees and you are left with pretty much nothing. Freetrade has a three-pound monthly fee for holding your shares in the ISA. ISA rules have different tax rules and this can save you from taxes.

• Tax-efficient

With the ISA there is no income tax or capital gains on your investments and return therefore you are always tax-free

• Limit

You can deposit up to £20000 pounds per year for a three-pound monthly fee.

• Long-term investments

While holding your investments in the ISA, you can secure your dividends and capital gains by making them tax-free. This allows your wealth to increase much faster. Furthermore, your investments are secured for the long term.

Why should you open an ISA with Freetrade?

• Commission-free

When you open ISA with Freetrade, there are no commissions whatsoever for buying and selling the stocks. This essentially means that your investments can grow manifolds in no time.

• Allows instant trading

Freetrade allows unlimited instant trades for free during the stock market hours.

• Safe and secure

As Freetrade is one of the few services regulated by the top tier regulator FCA, your investments are secured and safe. Furthermore, you are also covered by the Financial Compensation Scheme as well.

• Low fees

Freetrade doesn’t have hidden charges or vague fee structures. It charges three pounds flat every month for holding your investments in the ISA. This way you can grow your investments without having to worry about the increased fees.

• High-quality stocks

Freetrade allows you to choose from several high-flying stocks like that of Google, Apple, and many others.

• Fractional shares

Here is something that separates this service from others. Even if you have to buy the most expensive share, you can have a chunk of it for yourself for as low as two pounds. This is very good if you are looking to make a more diverse portfolio for yourself.

• Support

Freetrade has amazing support with fast resolution times. They are there for you when you need them. For ISA they have extended support as well.

 

 

Freetrade vs Trading 212

Both services have a lot to offer. Both allow you to trade stocks for free without even having to pay any commission fees. Other companies like eToro are also following suit. Freetrade allows you to trade in stocks and ETFs while Trade212 allows you to trade in instruments. You can trade over 1800 of them. Instruments such as commodities like oil and gold, stocks, currencies, and cryptocurrencies are some things that you can expect to trade-in. In this manner, Trade 212 has a broader scope. Let us see how these two free trading services compare with each other.

Both the Freetrade and Trade212 are the same in terms of Stocks and shares, ISA, Fractional shares, and Ethical investing practices. Neither of the two services provides anything for Pension (SIPP) or Lifetime ISA (LISA). Both platforms have apps for Desktop, Android, and iOS platforms. Trade212 has a lot of Guides and other information on the available products while Freetrade provides nothing like that. It has limited research tools as well unlike Traded212 which allows you an in-depth analysis. Trade212 offers demo accounts and has a good number of videos and walkthroughs while Freetrade doesn’t have any of those.

Costs

While both of the platforms are absolutely free and they charge you almost nothing, there are but few differences between the two when it comes to actual costs. Trade212 does not charge anything except for the 0.5 per cent foreign exchange fee. There are also some incumbrances on the deposit amount and withdrawals as well.

Compared to this Freetrade also has some charges. For example, it charges 0.45 per cent for foreign exchange if you are buying shares from another country. There are also a couple of charges to use their stocks. As for withdrawal, there is no fee but if you want the same day withdrawal, you will have to pay as much as five pounds. These fees are still peanuts if compared to other trading platforms. On other platforms, you can easily incur charges as much as ten pounds that decreases your returns. This ensures a good deal of incurring a lot of profits without having to spend money.

Demo account

Freetrade does not offer Demo accounts. This means that you have to go straight into trading without practising. Trading212 however, has Demo accounts and you can practice as much as you want before going into the real thing. Once you feel that you are ready to trade, you can try this for real. The good thing is that it lets you practice on a Demo account without having to register through an Email. But if you want to have an insight into your stocks then you will have to sign up for them.

Is Freetrade better than Trading 212?

Both services are amazing choices for free trading. Freetrade is simple to use and aims at new users. Trade212 has a lot of options and is a comparatively well-made platform for more advanced users. That is why it gives you a demo account to practice first. Neither of these two will give you a pre-made portfolio and you will have to make your own. If you want pre-made portfolios then these services might not be for you. We think that both Trading 212 and Freetrade have their own pros and cons making them suitable for a variety of users.

Freetrade vs Lansdown

• Interface

Both the platforms have an easy to use interface and allow for fast trading options.

• Stocks

They have free stocks and provide the option for ETF trading as well.

• App

Both platforms have mobile and desktop apps for easy usage.

• Learning tools

Both platforms have intuitive learning tools that educate the user of the trading principles and best practices.

• Customer service

Both platforms have great customer service who are always there to help you.

• Investor protection

Both the platforms offer a high level of investor protection

• Clients

The majority of the clients on both platforms are from the top tier authorities.

• Stock exchange listing

Lansdown is listed on the stock exchange while Freetrade isn’t.

• Negative balance protection

Freetrade does not have protection for the negative balance.

• Banking license

Neither of the platforms holds a banking license.

Freetrade offers almost no tools to properly research the stocks and has a very limited Portfolio. Furthermore, the Debit card can only be used for deposits and not for withdrawals. On the other hand, Lansdown has a high fee for ETFs and stocks and if you are outside of the UK, you have to open an offline account. Furthermore, if you want to trade in any other currency, you cannot do it with Lansdown.

Bottom line

Freetrade is a comparatively new company in its initial stages. Established in 2016 it has grown massively and has a good track record as a broker. It even survived the financial crises and has sustained its existence. Freetrade is regulated by top tier regulators and is, therefore, a safe platform to trade on. Furthermore, the PEC also does an annual audit of the company that provides a high degree of investor protection.

Free trade allows trading in stocks and ETFs with a great fee structure. Starting with almost nothing you can build a considerably vibrant portfolio because you get to purchase a part of the most expensive stocks for just two pounds. The account opening is easy and pretty fast. The app is intuitive and easy to use while the whole thing is very user-friendly.

Although it has some drawbacks like the inability to go beyond the US and UK stocks and the limitation imposed on credit cards plus the severe lack of research tools. But it is a great choice for people if you want an easy-to-use trading system with instant trades and execution on a very low fee. If you are looking for tax-free investments and want to hold them in the ISA then Freetrade is a great choice indeed.