Freetrade Review UK: The Commission-Free Trading Platform

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

Freetrade Review UK

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

What is Freetrade?

Founded in 2016 and headquartered in London, Freetrade is a pioneering commission-free broker that extends its services across Europe and beyond. This innovative platform satisfies both novice and experienced investors, offering an extensive selection of over 6,000 investment vehicles, such as stocks, fractional shares, investment trusts, over-the-counter (OTC) stocks, special purpose acquisition companies (SPACs), and initial public offerings (IPOs).

How Does Freetrade Work?

Accessible and Cost-Effective Investing:
Freetrade revolutionises the investment landscape with its zero-fee trading application, available on both Android and iOS platforms. UK users benefit from direct access to a wide array of equities and ETFs from the UK and US markets. Unlike traditional brokers that impose a percentage-based fee, Freetrade offers flat fees for its Standard and Plus plans—making it a more affordable option for investors managing larger portfolios. For instance, while mainstream brokers typically charge between 0.25% and 0.5% of the portfolio value, Freetrade’s structured fee system presents a cost-effective alternative.

Innovative Features and Future Expansion:
The platform also supports the purchase of fractional shares, enabling UK investors to engage with US markets more feasibly. Moreover, non-basic plan subscribers can earn interest on their uninvested cash balances, with rates ranging from 1% for Standard members to 3% for Plus members. Looking ahead, Freetrade is poised to expand its footprint into the broader European market as part of its growth strategy initiated in 2020.

Platform Highlights:
Freetrade stands out for its user-friendly interface, promoting a seamless trading experience without commission fees. It also fosters a vibrant social trading community, although it is important to note that trading in forex and cryptocurrencies is not supported.

Key Features of Freetrade

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

FeaturesExplanation
RegulationFreetrade is regulated by the Financial Conduct Authority in the United Kingdom (FRN: 783189).
Investment OptionsOver 6,000 investment choices including stocks, fractional shares, and ETFs.
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, Credit/Debit card, Apple Pay, and Google Pay
Deposit and withdrawal feeNone
Trading PlatformProprietary in-app trading platform on mobile devices and Web service for desktops
Currency Exchange Fee0.59%
Interest on Uninvested CashEarn between 1% to 3% interest on cash balances depending on your plan level.

Freetrade: Regulation and Investor Protection

One critical feature of a broker is its regulatory and investor protection level. 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. 

Is Freetrade Broker Safe?

Freetrade prioritizes the security of your investments. Regulated by the Financial Conduct Authority (FCA) in the UK, It adheres strictly to the rules and regulations mandated by this governing body, ensuring transparent and fair conduct.

Key Safety Features Include:

  • Segregated Bank Accounts: Investor funds are held in segregated accounts, meaning they are kept separate from the company’s business funds and cannot be used to pay creditors or cover business expenses.
  • Nominee Account Protection: Investments in UK-listed stocks and ETFs are held in a nominee account by Freetrade Nominee Limited, which cannot engage in trading activities, thus safeguarding it from liabilities that Freetrade Limited might incur.
  • CREST and DTCC Systems: For UK assets, Freetrade uses CREST, the central securities depository, ensuring that your shares are held securely. In the US, investments are safeguarded in the Depository Trust and Clearing Corporation (DTCC), under similar protective measures.

Guarantee of Assets

Freetrade is part of the Financial Services Compensation Scheme (FSCS), offering an additional layer of security. If Freetrade were to fail, each investor’s assets would be protected up to £85,000, providing substantial financial security.

Is Freetrade Broker Reliable?

With robust regulatory backing from the FCA, SEC, and inclusion in protective schemes like CREST and the FSCS, Freetrade has established itself as a dependable platform suitable for novice and expert investors. The segregation of client funds, alongside the non-trading status of Freetrade Nominee Limited, ensures that in the unlikely event of bankruptcy, your assets remain protected and retrievable.

Exploring the Diverse Asset Portfolio of Freetrade: Stocks, ETFs, and More

Freetrade, a pioneering broker platform, offers UK and international investors the opportunity to engage with a broad array of financial assets. With over 6,000 stocks and ETFs from the UK, US, and Europe, and the ability to trade fractional shares, Freetrade stands out for its commission-free model. This review will delve into the various assets available on Freetrade, highlighting the benefits and features of each.

Invest in US, UK and European Shares Freetrade
Screenshot of Freetrade Website

Stocks

Stocks represent fractional ownership in a company, making shareholders partial owners. Stocks are considered a higher-risk investment due to their value fluctuations based on company performance and market perception. Freetrade users can choose from an extensive range of over 6,000 stocks, facilitating broad market access.

👉 How to Start Investing in the Stock Market: Guide for Beginners UK

Fractional Shares

Fractional shares, or “stock slices,” allow investors to own a portion of a stock, making it easier to invest in high-priced stocks without committing to a full share. This approach democratizes investment, with dividends paid proportionally to share ownership. For instance, owning a quarter share entitles you to a quarter of the dividends distributed.

ETFs (Exchange-Traded Funds)

ETFs are investment funds traded on stock exchanges, much like stocks. They hold assets such as stocks, commodities, or bonds, but trade close to their net asset value during the trading day. Freetrade offers over 400 ETFs, enabling investors to diversify their portfolios without the high fees typically associated with active management.

Investment trusts

Investment trusts are publicly traded companies that invest in a fixed portfolio of assets. They are known for trading at a discount or premium to their Net Asset Value (NAV). With access to over 150 investment trusts, Freetrade provides opportunities for portfolio diversification and potential capital growth.

Bonds

While primarily offering equity-based assets, Freetrade also allows its users to invest in bond ETFs. These funds are ideal for investors seeking regular income and lower risk compared to stocks.

Commodities

Investors at Freetrade can trade in various commodities, including hard commodities like metals and energy, soft commodities such as agricultural products, and even renewable energy sources. This sector provides a good hedge against inflation and portfolio diversification.

Freetrade Account Types: ISA, SIPP, and General Investment Accounts

Freetrade offers three distinct types of individual savings accounts, each tailored to different investment needs and financial goals. These include the Stocks and Shares ISA, Self-invested Personal Pension (SIPP), and General Investment Account (GIA). Here’s a detailed look at each to help you determine which fits your investment strategy best.

Stocks and Shares ISA Account

Tax-Efficient Saving with Freetrade ISA

The Freetrade Stocks and Shares ISA provides a tax-efficient way to invest in a diverse range of assets, from stocks and shares to bonds and ETFs. This account shields your investments from UK taxes on dividends and capital gains.

Annual Investment Limit:
For the tax year 2023/24, you can invest up to £20,000 in an ISA. This can be allocated to one ISA or spread across various ISAs.

Key Features:

  • Commission-Free: Buy and sell stocks and shares at zero fees.
  • Tax-Free Dividends: Enjoy returns without any UK tax.
  • Fractional Shares: Invest as little as £2 in top companies.
  • Rapid Trading: Unlimited commission-free instant trades within market hours.
  • Customer Support: Priority service included in the Standard and Plus plans.

Charges Overview:

  • Monthly Fee: £5.99 for Standard Plan; £11.99 for Plus Plan.
  • Foreign Exchange Fee: Additional 0.59% on Standard Plan; 0.39% on Plus Plan.

Freetrade ISA Account Fees

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

👉 Best Stocks and Shares ISAs of UK

Self-invested Personal Pension (SIPP) Account

Take Control of Your Retirement Savings

The Freetrade SIPP account offers a flexible approach to pension investments, allowing you to manage your retirement funds actively. This account suits those looking to consolidate their pensions and make active investment choices.

Contribution and Tax Relief:
Contribute up to 100% of your salary with tax relief, up to an annual limit of £40,000.

Key Features:

  • Inclusive Fee: Included in the Plus plan with no growth penalty.
  • Pension Consolidation: Combine old pensions for easier management.
  • Instant Trades: Unlimited commission-free trades available.

Charges Overview:

  • Monthly Fee: £11.99 under the Plus plan.
  • Foreign Exchange Fee: 0.39% on overseas share dealings.

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 Fees

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

General Investment Account (GIA)

Flexibility Without Limits

The GIA offers a flexible investment solution without the tax efficiencies of an ISA or SIPP. This account is ideal if you’ve maxed out your tax-advantaged contributions or seek broader investment opportunities.

Tax Considerations:
Subject to Capital Gains Tax and dividend tax on profits above £6,000 for CGT and £1,000 for dividends in the tax year 2023/24.

Key Features:

  • Unrestricted Investing: There is no limit on the amount you can invest.
  • Commission-Free Trading: No fees on buying or selling within the account.
  • Accessibility: Available on all Freetrade pricing plans.

Freetrade Trading Fees

The Freetrade broker has three pricing plans: the Basic, the Standard, and the Plus plan. Below are the main differences among them:

Basic PlanStandard PlanPlus Plan
Fee£0.00 per month£4.99 per month, £59.88 billed annually£9.99 per month, £119.88 billed annually
Available products1500 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 typesGeneral Investment AccountGeneral Investment Account Stocks and Shares ISAGeneral Investment Account Stocks and Shares ISA Self-invested Personal Pension
CommissionCommission-free Commission-free Commission-free
Range of Stocks1500+6000+6000+
US Fractional sharesYESYESYES
Automatic Order TypesNOYESYES
Exchange rate feeExchange rate +0.99% FX feeExchange rate +0.59% FX feeExchange rate +0.39% FX fee
Customer ServiceBasicBasicPriority
Interest rate1% AER interest on uninvested cash up to £2,0003% AER interest on uninvested cash up to £2,0005% AER interest on uninvested cash up to £3,000
Advanced stock fundamentalsNOYESYES
Trading appIn-appIn-appIn-app Freetrade Web beta
Fees as of 14th May 2024

Freetrade Deposit and Withdrawal Options

Freetrade offers straightforward and efficient methods for depositing and withdrawing funds, designed to accommodate users’ various preferences.

Deposit Options and Charges

Bank Transfer:

  • Method: Link a UK-authorized bank account to your Freetrade account for seamless transfers.
  • Fees: No deposit fees charged by Freetrade.

Debit Card Transfer:

  • Method: Use a debit card linked to your bank account for deposits.
  • Fees: No deposit fees charged by Freetrade.

Apple and Google Pay:

  • Method: Make deposits directly to Freetrade using Apple Pay or Google Pay. This option is particularly fast, offering instant transfers.
  • Limit: This method uses a lifetime deposit limit of £250.
  • Requirements: The default billing address in Google or Apple Pay settings must match the address registered with Freetrade.
  • Fees: No deposit fees are charged by Freetrade, but be aware of potential external fees like exchange rates.

Withdrawal Options and Charges

Bank Transfer Only:

  • Method: Withdrawals from your Freetrade account can only be made through a linked bank transfer.
  • Time Frame: The funds typically reach your bank account in 2-3 business days, although it can take up to 5 business days in some cases.
  • Fees: Freetrade does not charge fees for withdrawals.

Freetrade Mobile App Features

freetrade App
Freetrade App

Platform Availability:

  • Compatibility: The Freetrade app is designed to work perfectly on Android and iOS devices, ensuring broad accessibility for all users.
  • Mobile-Only: Freetrade does not currently offer a desktop application. All trading activities are confined to the mobile app, which is optimized for a mobile-first trading experience.

Awards and Recognition:

  • Recognition: For three years, the Freetrade app has been recognized as one of the best online trading apps, a reward for its user-friendly design and robust functionality.

Advanced Features for Plus Plan Members

Desktop Trading:

  • Exclusive to Plus Plan: While the primary interface is mobile, Freetrade offers desktop trading capabilities exclusively to customers on the Plus plans. This feature allows for enhanced asset and portfolio management through a desktop device, catering to the needs of more advanced traders.

Freetrade Customer Service

Freetrade is committed to providing exceptional customer service to ensure a smooth trading experience. Whether through the app, website, or social media, Freetrade offers several convenient ways to access support and information.

  • 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 at hello@freetrade.io. The team should respond 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 Services

Freetrade provides a seamless investment transfer system that facilitates easy transfers both into and out of your Freetrade account. This service enables customers to efficiently move their investments from other brokers to Freetrade, or vice versa, ensuring continuity in their investment strategy.

How to Transfer Investments to Freetrade

Initiating the Transfer-In Process:

  • Step 1: App Setup: Download the Freetrade app, choose your desired plan, and set up your account type.
  • Step 2: Account Approval: Once your account is approved, proceed to the next step.
  • Step 3: Complete the Transfer Form: Fill out the online Freetrade transfer form to inform your current broker and authorize the transfer of your investments.

Types of Transfers:

  • Asset Transfer: You can transfer in stocks if they are listed on Freetrade. If not, you may need to convert your holdings into cash.
  • Cash Transfer: Directly transfer cash if liquidation of assets is necessary or preferred.
  • Fees: While Freetrade does not charge for the transfer process, be mindful of potential exchange rate charges when transferring assets from abroad.

How to Transfer Investments from Freetrade

Transferring Out Process:

  • UK Securities: There is no charge for transferring out UK securities, making it cost-effective for local transfers.
  • US Securities: Transferring US securities incurs a fee of £17 per holding, which should be considered when moving investments to other brokers.

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 User Ratings

As a rapidly growing broker, Freetrade has amassed thousands of user reviews across various platforms, providing insight into customer satisfaction with their services. Here’s what users are saying about their experiences with Freetrade.

TrustPilot Reviews:

  • Rating: Freetrade has an average rating of 3.7 out of 5 on TrustPilot, indicating a generally positive reception from its users within the investment community.
Trustpilot Freetrade
Trustpilot Freetrade

Google Play Store Reviews:

  • Rating: On the Google Play Store, Freetrade boasts a higher rating of 4.4 out of 5, reflecting satisfaction among Android users.
Google Play Freetrade Rating
Google Play Freetrade Rating

App Store Reviews:

  • Rating: iOS users have rated Freetrade 4.3 out of 5 on the App Store, showcasing strong approval of the app’s performance on Apple devices.

Opinion about the Freetrade Broker

Advantages of Freetrade

Ideal for Beginners:

  • User-Friendly: Freetrade is especially beneficial for beginners who are just starting to navigate the complexities of investments. The platform provides an educational and straightforward trading experience.
  • Diverse Asset Options: Investors have access to a broad range of securities, including stocks and exchange-traded funds (ETFs), across both UK and US markets.

Cost-Efficiency:

  • Freemium Model: Freetrade’s commission-free structure allows you to engage in buying, selling, transferring, and depositing activities without the burden of additional costs. This model significantly reduces the barriers to entry for new investors and makes it an attractive cost-saving option.

Mobile Platform:

  • High Functionality and Aesthetics: The mobile app, compatible with both Android and iOS devices, is noted for its efficiency and appealing design. This makes it straightforward for users to manage their portfolios from anywhere, enhancing the overall trading experience.

Considerations for Advanced Investors

Limitations for Professionals:

  • While Freetrade excels in simplicity and cost management, it may not satisfy expert traders seeking sophisticated tools for in-depth market analysis. The platform lacks advanced functionalities crucial for detailed fundamental and technical analysis, which might be a dealbreaker for experienced investors.

Conclusion

Freetrade offers a solid foundation for new investors with its easy-to-use interface and zero-commission fee structure, making it an excellent entry-level platform. However, those with more experience in the markets who require detailed analytics might consider exploring additional platforms that offer advanced trading tools.

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Frequently Asked Questions About Freetrade

How does Freetrade make money if there are no commission fees?

Freetrade operates on a freemium model, where basic trading services are free, but additional services, such as ISA accounts or advanced order types, come with a monthly fee. They also earn revenue from currency exchange fees on trades in non-UK stocks and interest on cash held in accounts.

How can I contact Freetrade customer service?

You can contact Freetrade customer service through their in-app chat feature, email (hello@freetrade.io), or by engaging with them on social media platforms like Twitter and Facebook for prompt responses.

What is the minimum investment on Freetrade?

No minimum investment is required to start trading with Freetrade, making it ideal for beginners and those looking to start with small amounts. You can even purchase fractional shares with as little as £2.

Can I transfer my existing investments to Freetrade?

Yes, Freetrade supports transfers-in for Stocks and Shares ISAs, SIPPs, and general investment accounts. You can transfer your existing investments in the form of stocks or as cash from another brokerage to Freetrade by filling out a transfer form available in the app.

What types of accounts does Freetrade offer?

Freetrade offers several account types, including a General Investment Account (GIA), a Stocks and Shares ISA, and a Self-Invested Personal Pension (SIPP). Each account type caters to different investment needs and tax considerations.

Can I trade cryptocurrencies on Freetrade?

No, Freetrade currently does not support cryptocurrency trading. The platform focuses on stocks and ETFs, and it has not announced any plans to include cryptocurrencies as of now.

Is Freetrade safe to use?

Yes, Freetrade is regulated by the UK’s Financial Conduct Authority (FCA), and all client funds are held in segregated bank accounts. Moreover, investments are protected up to £85,000 by the Financial Services Compensation Scheme (FSCS) in the event of the firm’s insolvency.

 

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