FreeTrade Review: Exploring Fees, Community Engagement, and ISA Benefits

Freetrade has risen to one of the most popular fintech and online brokers in the UK and Europe with its freemium model, easy-to-use platform, and access to many stocks and ETFs.

Today, we will provide an in-depth review of the online broker explaining the products and assets they offer, key features, pros and cons, customers' opinions, safety, and quality of their customer service.

Key Features, Asset, Pros and Cons
Freetrade Review: Key Features, Assets, Pros, and Cons

What is Freetrade and How do they Work (History)

Freetrade is a commission-free broker trading platform founded in 2016 and based in London, UK but runs its enterprise across Europe and other continents. It offers traders over 6000+ investment options, including stocks, fractional shares, investment trusts, OTC stocks, SPACs, and IPOs.

Over the years, the platforms have attracted investors, both beginners, and experts, with its low-cost trading platform for shares and ETFs.

In addition, Freetrade offers a zero-fee trading app on Android and iOS devices open to users in the United Kingdom. Users can trade equities and ETFs listed in the UK and US on the platform.

Although the platform offers a no-cost basic plan, its flat plan fee for its Standard and Plus plan has attracted investors with a larger portfolio. This is because the fee is cheaper than other percentage-based mainstream broker platforms. The percentage-based platforms typically charge 0.25% to 0.5% of the portfolio value, which may be expensive for large portfolios.

Furthermore, Freetrade allows investors to buy fractional shares, which helps trade US shares and offer interest on uninvested cash balance in the non-basic plans. The interest ranges from 1% for the Standard plan to 3% for the Plus plan.

In 2020, Freetrade plans to enter the broader European market– a plan that is already in motion.

Overall, the Freetrade broker is an excellent online trading platform that stands out with its user-friendly platform, commission-free, and social trading community. However, trading funds (Forex) and cryptocurrency through the platform is impossible.

Main Features of Freetrade

The table below summarizes the main features of the Freetrade broker we will examine in detail in this review:

FeaturesExplanation
RegulationsFreetrade is regulated by the Financial Conduct Academy in the United Kingdom (FRN: 783189).
Market and AssetsStocks, fractional shares, ETFs, investment trusts, OTC stocks, SPACs, REITs, IPOs
Financial Compensation Claims in case of bankruptcy (FSCS)Up to £85,000
Account typesStock and shares ISA, Self-invested Personal Pension (SIPP), and General Investment Account (GIA)
Pricing PlanBasic plan, Standard plan (£4.99 monthly or £59.88 annually), and Plus plan (£9.99 monthly or £119.88 monthly)
Minimum depositNo minimum deposit requirement
Deposit methodBank transfer, Credi/Debit card, Apple Pay, and Google Pay
Deposit and withdrawal feeZero-fee
Trading PlatformProprietary in-app trading platform on mobile devices and Web service for desktops
Currency Exchange Fee0.59% of the amount

Regulation and Guarantee

One of the critical features of a broker is the regulatory and guarantee status of the broker. This risk management system protects investors in case of bankruptcy or any unexpected loss from the broker. It also speaks of the investment's reliability and safety.

 Let’s discuss the regulation and guarantee of Freetrade. 

1.     Is Freetrade Broker Safe?

Regarding investment security, Freetrade is regulated by the UK's Financial Conduct Authority (FCA). As an FCA- authorized entity, they must obey all rules and regulations of the body in conduct to investment business rules provided by FCA.

In addition, all investor's funds are kept in segregated bank accounts. This implies they cannot use the money to cover their business expenses or pay off creditors.

Conversely, any stock with Freetrade is protected in the nominee account or at any approved third-party bank or custodian. This implies that Freetrade Nominee Limited holds any UK-listed stock or ETF you purchase, and you're the beneficial owner. The Stocks and ETFs are held in CREST, the UK’s central security depository for markets.

Freetrade Nominee Limited is a non-trading company that holds stocks and ETFs. Being non-trading shows that it can't run up liabilities, and it's shielded from any liability Freetrade Limited acquire.

All of these measures are in place in case of Freetrade Limited liquidation; the company's creditors will not use your assets to cover their liabilities.

On the brighter side, if you invest in US-listed stocks, Freetrade Limited also has a regulatory status to keep your investments. They hold your investment as the third-party Security and Exchange Commission (SEC) registered broker. The SEC-registered broker regulates the US securities markets.

With the SEC broker, Freetrade Limited holds each customer's stocks in a designated customer account at the broker. These stocks cannot mix with Freetrade assets or be used to settle debts. Like the UK's CREST, your US-listed stocks are held in DTCC (Depository Trust and Clearing Corporation).

Furthermore, Freetrade is part of the Financial Services Compensation Scheme (FCSC) to provide maximum security for your funds. This means that if the company fails together with the inability to safeguard your asset, the value of your assets are protected by FCSC up to a maximum of £85,000

2.     Is Freetrade Broker Reliable?

As a licensed company by many regulatory bodies, including FCA, SEC-broker, CREST, and FCSC, Freetrade is considered a reliable platform for beginner and expert investors.

In an unlikely case of bankruptcy and liquidation, the client's funds are safe and will be returned as they are kept in segregated accounts and third-party platforms.

Major Financial Asset of Freetrade in the UK

Freetrade is a broker platform that gives access to over 6000+ stocks and ETFs in the UK and US, as well as European listed companies, with zero commission fees. One of the highlights of Freetrade Limited is access to fractional shares they offer their investors.

review freetrade broker

Here is the list of Assets Freetrade, which will all be discussed in this review content.

Stocks

Stock is a form of security that gives investors an ownership fraction of the issuing company. These investors are called shareholders of the company.

Stocks are classified as one of the riskier assets as the value depends on how well the company is doing at the time of purchase and how successful investors believe it will be in the future.

On the Freetrade platform, you have access to over 6000 stocks to trade

Fractional Shares

Fractional shares are regarded as partial shares or stock slices. It implies that you own less than one share of a company. With this investment system, Freetrade allows you to invest in a company without buying the whole share.

As in stocks, the compensation system comes as dividends. You will receive a dividend corresponding to the fraction of your share(stock). For example, if the company pays £1 as a dividend, you will get £0.25 as dividend if you own 1/4th of a share.

ETFs

An ETF, an Exchange-traded fund are investment security type that gives investors access to returns of a diversified portfolio containing one or more assets. Free trade offers a commission-free over 400 ETF investments.

Investment trusts

Investment trusts are forms of investment in which the company issues a fixed number of shares at launch, and the shares are traded on the stock exchange. If the shares are trading below the Net Asset Value (NAV) value, the trust is said to be trading at a discount, and if they trade above the NAV, they are trading at a premium.

The Freetarde stock trading app allows you to invest in over 150 investment trusts to diversify your portfolio.

Bonds

Free trade users can buy bond ETFs through all the pricing plans available on the platform.

Commodities

As a Freetrade invested, you can trade commodities in the US and UK markets, including Hard commodities (metals, oil, and gas), soft commodities (those connected to agriculture or grown and reared materials), and renewable energy.

Types of Freetrade Account

Freetrade Broker offers three types of accounts which differ in the number of stocks you can invest in and plan regulation. These account types include Stock and shares ISA, Self-invested personal pension (SIPP), and General investment accounts.

1. Stock and Shares ISA Account

The Freetrade stock and shares individual savings account (ISA) is a tax-efficient investment account that allows investors to invest in various assets, from individual stocks and shares to investment trusts, bonds, and ETFs.

The tax-efficient account implies that all monetary returns from this investment account are free from UK taxes.

In addition, the amount of money you can invest in this account is limited each tax year by HMRC (His Majesty's Revenue and Custom). For the 2023/24 (April 6, 2023, to April 5, 2024) tax year, the maximum investment in an ISA account is £20,000. You may invest all in a single ISA account or spread it across different ISA accounts.

With a Freetrade ISA account, you are sure you can invest in over 6000 stocks and ETFs listed across the world.

Key Features of the Freetrade Stock and Shares ISA Account

  • Commission-free investment – Buying and selling of stocks and shares with zero fees. Also, with investment in the ISA account, you have the opportunity to grow your savings
  • No income tax on dividends or returns – Your investment dividends are free from UK tax.
  •  Fractional Shares – Freetrade ISA account allow you to invest in shares and stocks of companies with as small as £2.
  • It only features on the Standard  and Plus plan
  • Customer support is faster when you need it
  • Instant trades – unlimited commission-free instant trades during the stock market trading hour

Freetrade ISA Charges

ChargesStandard PlanPlus Plan
Monthly fee£5.99£11.99
Share dealingsFreeFree
Overseas share dealingsExchange rate +0.59%Exchange rate +0.39%
Transfer in (Deposit)FreeFree
Transfer out (Withdrawal) – UK stock or cashFreeFree
Transfer Out – US stock£17 per holding£17 per holding

2. Self-invested Personal Pension (SIPP) Account

The SIPP account allows you to take control of your pension investment. It is a pension product designed for people who want to use their pension or investment decision. You can only access the money from age 55.

The funds in this account are invested in growing your pension savings over time instead of keeping it in a bank account and incurring tax and bank charges.

The account is held in your name, and you can contribute to it yourself or through your employer or another third-party like your bank. In addition, before transferring your pension to SIPP, ensure that you will not lose valuable guarantees or incur excessive transfer penalties.

With a Freetrade SIPP account, you can access a broader range of investment options and another benefit because it's available on its Plus plan. It also allows you to contribute up to 100% of your salary and receive tax relief on contributions less than £40,000 (Annual allowance) per year.

Key Features of the Freetrade SIPP Account

  • SIPP is automatically included in the Plus plan, and no additional fee as the pension pot grows.
  • Combine pension – the Freetrade platform allow you to combine old pensions to make it easy to track investment performance
  • Instant trades – unlimited commission-free instant trades during the stock market trading hour

Freetrade SIPP Charges

ChargesPlus plan
Monthly fee£11.99
Share dealingFree
Overseas share dealing (Currency Exchange)Exchange rate +0.39%
Transfer in (Deposit)Free
Transfer out (Withdrawal)Free
US stock transfer out£17 per holding

3. General Investment Account (GIA)

This is an investment account outside the tax-efficient system that allows you to buy, sell, and manage an investment portfolio with no limit. However, you will pay Capital Gain Tax (CGT) and dividend task on profit above your allowance.

The tax amount depends on the profit size and the current income tax band. In the 2023/24 tax year,  you have a CGT allowance of £6,000 and dividends of £1,000.

The GIA is an excellent choice of investment system if you have maxed out your contributions on the tax-advantage accounts or want more flexibility and control over your investment.

The Freetrade GIA is available for free on all Freetrade pricing plans. With the GIA, all buying and selling on the account is commission-free.

Freetrade Pricing Plan

The Freetrade broker has three pricing platforms: the Basic, Standard, and Plus plan. Below are the differences between the plans.

FeaturesBasic PlanStandard PlanPlus Plan
Plan Fee£0.00 per month£5.99 per month, £59.88 billed annually£11.99 per month, £119.88 billed annually
Number of Assets1500 stocks, including popular shares and ETFsFull range of 6000+ US, UK, and EU stocks and ETFsFull range of 6000+ US, UK, and EU stocks and ETFs
Account typeGeneral Investment AccountGeneral Investment Account Stocks and Shares ISAGeneral Investment Account Stocks and Shares ISA Self-invested Personal Pension
CommissionCommission-free tradesCommission-free tradesCommission-free trades
Range of Stocks1500+6000+6000+
US Fractional sharesYESYESYES
Automation Order TypesNOYESYES
Exchange rate feeExchange rate +0.99% FX feeExchange rate +0.59% FX feeExchange rate +0.39% FX fee
Customer ServiceBasicBasicPriority
Interest rateNo interest1% interest on uninvested cash up to £2,0003% interest on uninvested cash up to £4,000
Advanced stock fundamentalsNOYESYES
Trading appIn-appIn-appIn-app Freetrade Web beta

Freetrade Deposit and Withdrawal Options

Free trade provides straightforward depositing and withdrawal methods

Deposit Options and Charges

  • Bank Transfer – You can link a UK-authorized bank account to your Freetrade account.
  • Debit Card Transfer – You can deposit with a debit card
  • Apple and Google Pay – You can deposit funds directly to Freetrade with Google or Apple Pay. The deposit is instant, and this method has a £250 lifetime limit. The default billing address in the Google or Apple Pay Settings must match the Freetrade address.

Generally, Freetrade does not charge a deposit fee, although another additional fee may be included, e.g., exchange rate.

Deposit Options and Charges

You can only withdraw from Freetrade through bank transfer, and it typically takes 2-3 business days to reach the linked bank account and sometimes up to 5 business days.

Freetrade Trading Platform

The Freetrade Broker offers a proprietary trading platform embedded in its app where you can access all stocks and ETFs you want to invest. The trading platform was awarded the best online trading app for three years in a row.

The Freetarde app is compatible with both Android and Ios devices. Unfortunately, Freetrade currently has no desktop app; you can only make trades on your mobile device.

Currently, trading Freetrade assets and portfolio management via the desktop device is available for customers on the Plus plans.

freetrade broker ISA

Freetrade Customer Service

Freetrade offers customer-dedicated customer service through the ‘Help' section on the website and app. There are several alternatives to contacting customer service support:

  • Help Hub and Community –  The Help Hub contains answers to questions you may ask. So you don't have to text customer support and wait for a response. Also, you can visit the Freetrade community of investors to look for solutions, support, and advice.
  • Social Media – Freetrade customer support is active on Twitter, Instagram, LinkedIn, and Facebook. You can use these channels to complain through the chatbox and get updates about the broker, the latest news, and market updates.
  • Email Support – You can email Freetrade customer support through hello@freetrade.io. You should expect a response from the team in less than 24 hours.
  • In-App Chat –  The Freetrade app has a live chat feature that lets you speak with a customer service representative. It's the quickest and the most convenient way to get help with any issue or question.

Freetrade Investment Transfer Service

Freetrade broker offers its customer an easy transfer system that allows them to transfer-in their investment from other brokers to the corresponding Freetrade account. Also, you can transfer your investment from Freetrade to other brokers.

The Tranfer-in process is simple; you only need to download the Freetrade app and register your design plan and account type. Wait till your account is approved and proceed to fill out the Freetrade online transfer form to notify your current broker and authorize the transfer process.

Fretrade allows you to transfer in as stock, provided they have the asset listed or cash. If the asset is not listed on Freetrade, you will need to sell out the asset. Also, you may encounter additional charges, such as exchange rate, although the Freetrade transfer process is free.

Consequently, if you decide to leave Freetrade, you may transfer out assets (stocks) or cash providers. Transferring out UK securities is free, while US securities incur a cost of £17 per holding.

Freetrade Resources and Tool

To help users get the right information about the platform, their investments, and market analysis, Freetrade provides several educational resources for its users. These resources include:

Freetrade Blog

The broker’s app and trading platform features a blog section that provides comprehensive articles on various investment strategies, market trends, and other financial news.

They update the blog content regularly and add other valuable content, which makes it an invaluable resource for educating investors.

Freetrade Research and Analysis

The Freetrde in-app newsfeed provides investors latest news and analysis from trusted financial sources and experts. The news and analysis include everything from market updates, real-time market data, company report, company's specific news, and analyst rating.

All of these gives necessary information to investors to stay on top of significant development that could impact their investment and provide comprehensive information about companies you want to invest in.

Freetrade Invest Hub

The Freetrade invest hub provides all investors, beginners, and experts educational articles, including articles, videos, podcasts, and other material dedicated to helping users understand how to invest their money.

The Invest Hub has two sections, including the Basic and Build Your Portfolio section. These sections only aim to educate investors properly.

In addition, Freetrade offers a series of webinars with industry experts and sends newsletters on various investment topics. The webinars are free, with Q&A sections with the presenter, and the newsletter is a free subscription.

Freetrade User Reviews

Are Freetrade users satisfied with their services? The review of users speaks a lot about the service of the broker.

Freetrade is one fo the brokers with thousands of reviews and ratings in the TrustPilot investment community. It has a rating of 3.7 out of 5

Similarly, Freetrade has a rating of 4.4 out of 5 on Google Play Store.

Next to App Store, Freetrade has a 4.3 out of 5 rating.

Opinion about the Freetrade Broker

Free trade is a good choice broker, especially if you're a beginner and want to learn the rudiments of investment. They offer a wide range of UK and US securities, such as stocks and Exchange-traded funds (ETFs).

The freemium model of the broker means that you can buy, sell, transfer, withdraw, and deposit without worrying about commission charges. This makes it a cost-saving platform.

Freetrade also owns an efficient and good-looking mobile platform compatible with Android and iOS devices for trading. This makes it easy to manage your portfolio.

However, if you're an expert trader who needs advanced features for fundamental and technical market analysis, Freetrade may not be the best platform for you.

Related Articles and Recommendations

Frequently Asked Questions About Freetrade

Can I use Freetrade Outside UK?

Currently, Freetrade is only available in the UK, but the company has plans to expand to other countries in Europe, starting from Ireland and Germany.

What Fees Will I Pay to Use Freetrade

Freetrade has a free basic pricing plan but also charge a fee for its Standard and Plus plan. They also charge some fees for some account actions, such as exchange rate and transfer out of the broker.

Is Freetrade Safe?

Freetrade is regulated by the UK's Financial Conduct Authority (FCA), and your assets are protected by Financial Service Compensation Scheme (FSCS) up to £85,000

 

Related Articles

Best Stocks and Shares ISAs Platforms
Capitalising on investment plans to grow your money is a way to beat the UK inflation rate, and growing the investment in the UK Stock and Shares ISAs is excellent to own a tax-free plan of up to £20,000 in the 2023/2024 UK tax year. The stock ...