Freetrade vs eToro: Comparison of Both Brokers towards UK investors

If you’re keen on low-cost and commission-free investment platforms, you probably have heard about Freetrade and eToro brokers. Both brokers are low-cost or commission-free and very customer-centric in terms of features, user-friendly trading platforms, and services, but how do they differ?

etoro vs freetrade
Freetrade vs. eToro Review

In this article, we will provide a detailed comparison between Freetrade and eToro in terms of regulation, products and services, trading fees, account types, customer support, deposit and withdrawal policies as well as their user opinions.

Freetrade vs eToro: What Are They and How Do They Work?

Freetrade: What is it, and How Does it Work?

Freetade Limited is a fintech company founded in 2016 to offer UK investors a Freemium share dealing service. It offers investors commission-free stocks, shares, and funds in the UK, US, and across Europe.

Freetrade works with its user-friendly mobile app, which is compatible with Android and iOS devices, and its web platform for its top-tiered pricing plan. With the mobile app, you can access the three investment plans available distributed across its pricing plans.

The pricing plan includes the Basic plan, which gives you access to a General Investment Account (GIA); the Standard Plan, which gives you access to GIA and the Stock and Shares ISA account; and the Plus Plan, which allows you to trade with the GIA and a full tax-efficient system, including Stocks and Shares ISA and the Self-invested Personal Pension (SIPP).

In addition, Freetrade investors can buy shares in fractions and receive dividends of the fraction they own.

Overall, Freetrade is an excellent platform for investors who want to purchase a fraction or whole of stock or trade Funds. The commission-free system and easy-to-use mobile is a game-changer to the UK broker system.

eToro: What is it and How Does it Work?

eToro financial company is an online social investment platform founded in 2007 and headquartered in Tel Aviv, Israel. This platform is registered within the UK, US, Australia, Europe, Cyprus, Gibraltar, Seychelles, and Malta.

eToro is famous for its social trading and copy-trading system, which creates a community for investors to discuss, like Facebook and Twitter (now known as the X app). Copy trading allows investors to replicate the trading strategies of expert traders in real time. That is, as they make changes in their trades, it reflects on your trades.

Generally, eToro allows investors to invest in stock and shares in whole and fractions. Additionally, you can access commodities, currency pairs, cryptocurrencies, and Contracts for Differences (CFDs).

All the products and services eToro offers are packaged in its account types. The account type for trading depends on your needs and the portfolio you want to handle. The account types include Personal, Professional, Corporate, Demo, Stock and Share ISA, and Islamic Account.

eToro operates on both mobile and web platforms. You can trade, invest, and manage your account on all Android, iOS, iPads, desktops, and laptops. The trading platform is user-friendly and has the necessary technical indicators to help you make financial decisions.

Overall, eToro offers investors a wide range of services and financial services with zero commission. It’s great for both beginner and experienced traders.

Freetrade vs eToro: Key Features

FeaturesFreetradeeToro*
RegulationUK’s Financial Conduct Authority (FCA)UK’s FCA, Cyprus’ CySEC, DNB, France’s FFA, MFSA, ASIC, FSAS, and the US FinCEN and Money Services Business
Financial AssetsStocks, shares, Exchange-traded Funds (ETFs), Fractional Shares, and CommoditiesStocks, Shares, ETFs, commodities, Cryptocurrencies, Fractional shares and CFDs
Services and Account typesISA, General Investment Account, and SIPPISA, Personal account, Corporate Account, Professional account, Islamic account, Copytrading, Social trading
Minimum Deposit£0$10 in the UK
Commission feeFreeFree
Deposit and Withdrawal feeFreeFree deposit fee with a $5 withdrawal fee on requests with a $30 minimum amount
Trading PlatformProprietary in-app platform on mobile device and web service for top-tiered planProprietary in-app platform and web service
Currency Exchange fee0.45% of the amount0.5% of the amount

Freetrade vs eToro: Regulation and Protection Scheme

Transparency, regulation, and security are at the core of the brokerage business to ensure clients understand the safety of their investments. Let’s explore the regulation, reliability, and security of these brokers.

Freetrade Regulation

As an FCA-authorised financial institution, Freetrade is obligated to conduct business in compliance with all rules and regulations to protect clients’ funds.

Moreover, to safeguard investors’ funds, Freetrade segregates client funds and assets, ensuring they are not used to settle any creditors or cover business expenses.

Additionally, your stocks are protected in the Freetrade Nominee account, which is an approved third-party custodian. The Freetrade Nominee Limited is a non-trading account that cannot incur liabilities and is protected from any losses Freetrade Limited may accrue. Freetrade holds UK-listed stocks and ETFs in CREST, the UK’s central securities depository, and US-listed stocks in the Depository Trust and Clearing Corporation (DTCC).

Furthermore, Freetrade is part of the Financial Service and Compensation Scheme. This ensures that in the unlikely event of Freetrade failing, it protects each client’s assets up to a maximum of £85,000.

All these Freetrade registrations and regulations ensure clients’ funds and assets are secure, demonstrating the safety of their investments.

Is Freetrade Reliable?

As an FCA-authorised platform and member of the FCSC, Freetrade is a reliable platform for investors to commit their funds.

Also, as an online-based platform, Freetrade uses bank-grade encryption to protect users’ personal and financial data. The mobile app also offers biometric authentication, including fingerprints and facial recognition, to provide additional customer security and confirm the platform’s reliability.

eToro Regulation

As a financial institution serving a global audience, eToro is regulated and authorised by multiple financial authorities to conduct its financial business according to each body’s rules and regulations.

In the UK, eToro is regulated by the Financial Conduct Authority (FCA), the Cyprus Securities and Exchange Commission (CySEC) in Cyprus, the Australian Securities and Investment Commission (ASIC) in Australia, Financial Services Authority Seychelles (FSAS) in Seychelles, the Money Services Business (MSB) and Financial Crimes Enforcement Network (FinCEN) in the US.

Moreover, eToro‘s investors in the UK and across Europe benefit from investor protection schemes such as FSCS in the UK and the Investor Compensation Fund (ICF) in Cyprus in the unlikely event of the platform failing.

These regulatory bodies worldwide ensure that eToro operates within their guidelines and protects client investments and assets in their jurisdictions.

Is eToro Reliable?

With authorisations from multiple financial bodies, experts and financial advisors consider eToro one of the most reliable financial platforms globally, with an excellent client fund security system.

In addition, eToro uses Secure Socket Layer (SSL) technology to encrypt clients’ data, personal and financial information.

Also, the app and web platform for accessing your account is equipped with two-factor authentication (2FA) as an extra layer of client security.

Freetrade vs. eToro: Products Offered

The main objective of these brokers is to provide investors with a variety of financial instruments. Both platforms offer an extensive array of assets.

Products and Assets Available with Freetrade

Freetrade provides investors with a diverse selection of investment assets for trading (buying and selling), along with up-to-date information about the current market status of these financial instruments. These include:

  • Stocks and SharesFreetrade offers access to over 6,000 US and UK stocks.
  • Fractional Shares – With Freetrade, you can invest in a portion of a company and receive dividends proportionate to your share of ownership.
  • ETFsFreetrade offers more than 400 commission-free Exchange-traded Funds (ETFs).
  • Investment Trusts – Choose from over 150 investment trusts with Freetrade to diversify your portfolio.
  • BondsFreetrade provides the option to trade both government and corporate bonds ETFs across all pricing plans.
  • Commodities – As a Freetrade investor, you can trade in US and UK commodities, including precious metals, oil, gas, agriculture, and renewable energy.

Products and Assets Available with eToro

eToro offers a variety of financial assets that investors can buy outright to hold or use to capitalize on current prices to go long or short. These include:

  • StockseToro offers over 3,000 commission-free stocks and shares from 17 different exchanges, with a minimum trade amount of $10. Fractional shares are also available.
  • Indices – Available via CFDs, eToro‘s indices can be traded 24/5 with options for leverage and short selling. eToro features over 20 high-profile indices.
  • ETFseToro‘s ETFs provide a diversified portfolio at a low cost with no management fees, offering over 300 ETFs.
  • CommoditieseToro allows trading in over 30 of the world’s top commodities as CFDs.
  • Forex – Known also as currency trading, eToro allows for long and short positions in over 50 currency pairs with leverage up to 1:30 for retail clients and up to 1:400 for professional clients.
  • CryptocurrencieseToro provides access to over 70 crypto assets, making it a substantial platform for cryptocurrency investment.

Both Freetrade and eToro cover a wide range of investment products, although their offerings differ in specifics such as the types of assets and the trading conditions.

Freetrade vs. eToro: Account Types

When it comes to account types, Freetrade and eToro are very different. While Freetrade offers a tax-free and commission-free investment plan on stock, ETFs, and commodities, eToro provides an investment platform outside the ISA system.

Let’s proceed to discuss account types:

Freetrade: Account Types

1.      Stock and shares ISA

Freetrade Stock and Shares ISA is a tax investment system that allows you to invest a particular amount during a tax year (e.g., you can invest up to £20,000 in the 2023/2024 tax year). With this investment, you do not pay Capital Gains Taxes on any dividend or return you might receive.

Via the Freetrade ISA, you can invest in over 6,000 US and UK stocks and ETFs with zero commission on all trades.

Freetrade Stocks and Shares ISA Charges

ChargesStandard PlanPlus Plan
Monthly fee£5.99 (£59.88/yr)£11.99 (£119.88/yr)
Share dealingsFreeFree
Overseas share dealingsExchange rate +0.59%Exchange rate +0.39%
Transfer in (Deposit)FreeFree
Transfer out (Withdrawal) – UK stocks or cashFreeFree
Transfer Out – US stock£17 per holding£17 per holding
Interests on uninvested cash3% AER up to £2K5% AER up to £3K

2.      Self-invested Personal Pension (SIPP)

SIPP is a tax-efficient investment program scheduled for life after retirement. With the Freetrade SIPP program, you can take over your pension and grow the pot by investing in any stock, ETF, or commodity. You can only have access to your point from age 55.

With the Freetrade SIPP, you can commit up to £40,000 annually without incurring tax through your employer or by direct deposit from your bank.

Freetrade SIPP Charges  

ChargesPlus plan
Monthly fee£11.99 (£119.88/yr)
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
Interests on uninvested cash5% AER up to £3K

3.      General Investment Account (GIA)

The GIA is a tax-incurring account for trading and managing Freetrade assets. As a tax-incurring account, you will be charged a Capital Gain Tax on every dividend or profit you obtain from your portfolio.

eToro Account Types

1.      eToro Personal Account

This is the eToro default account type. With an eToro personal account, you can trade all financial assets eToro and use features eToro offers, including Smart Portfolios, Social and Copy trading. On the downside, eToro offers the highest level of client security on this account, limiting the level of leverage you can trade.

2.      eToro Professional Account

eToro professional account holders have a personal account with the option to use higher leverage while opening trades. To qualify for this account, you need to meet certain criteria, including:

  1. You must have carried out transactions of significant size on the relevant market at an average of 10 per quarter over the previous four quarters.
  2. The value of your  investment portfolio must be £500,000
  3. You must have worked in the financial sector professionally for at least one year.

3.      eToro Corporate Account

eToro corporate accounts are intended for business purposes and are only available for legal entities. If you’re managing the capital that belongs to a business, this is the best account type you should open on eToro.

4.      eToro Stock and Shares ISA

In March 2023, eToro teamed up with Moneyfarm to provide all eligible UK clients a discretionary managed stock and share ISA. With the account, you can invest up to a particular amount determined by the UK government in a tax year without incurring tax. For example, in the 2023/2024 tax year, you invest up to £20,000

5.      eToro Islamic Account

This is a special type of account for Muslim clients that operates in accordance with Sharia law. Here, eToro does not charge or credit overnight fees. If you are interested in this account type, register for a real account investing a minimum of $1,000 and provide all identification documents to complete account verification.

6.      eToro Demo Account

All other eToro accounts come with a demo account, an account with a virtual portfolio. The account is a training site for novice or new platform members to learn the nature of the market and how the platform works.

Freetrade vs eToro: Trading Fees

Freetrade Pricing Plan and Trading Fees

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 Assets1,500 stocks, including popular shares and ETFsFull range of 6,000+ US, UK, and EU stocks and ETFsFull range of 6,000+ 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 Stocks1,500+6,000+6,000+
U.S 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-app onlyIn-app onlyIn-app + Freetrade Web beta

eToro Pricing Plan and Trading Fees

eToro has no tier pricing system, but like Freetade, eToro offers investors commission-free investment on all stocks and ETFs. However, eToro makes most of its profit from spreads and other fees. Below are eToro fes explained simply as possible in the table below:

FeatureCharges
Crypto Fee1% flat fee for buying and selling crypto assets, 0.2% tax burn mechanism, and 0.1% is added to eToro’s bid and ask price for LUNC
Spread FeeCFD Currencies – 0.01%+ // CFD Commodities – 0.05% // CFD stock & ETFs – 0.09%
Deposit FeeFree
Withdrawal Fee$5 with a $30 minimum withdrawal
Conversion Fee0.5 % on any deposit or withdrawal that is non-USD
Inactivity Fee$10 per month
Overnight feeThis fee is calculated according to market conditions and can change daily.

Freetrade vs eToro: Trading Platform

The broker’s trading platform is where users trade and invest in whatever asset they want. Freetrade and eToro have a proprietary trading platform where clients can trade and manage their investments.

However, all broker apps are not similar. Their features, ease of use, and user-friendliness differ. Let’s discuss the Freetrade and eToro platform.

Freetrade Trading Platform

freetrade trading platform

Depending on the pricing plan you trade, the Freetrade trading platform is both an app and a web-based platform. The Freereade app is a mobile-based platform that operates perfectly on Android and iOS devices.

The app is designed with simplicity, offering an exclusive and intuitive interface to help users navigate the platform. The app allows you to trade any stocks, ETF, and commodity Freetrade offers.

In addition, trading on the web platform is available only for customers on the Plus pricing plan.. This implies that you can trade laptops and desktops with the online-based web platform if you’re on the Plus plan. It is a limitation of the Freetrade platform.

eToro Trading Platform

eToro Trading Platform
eToro Trading Platform

eToro offers a Mobile app and a web-based trading platform for all account types and customers.

eToro offers its users a complete, easy-to-use, and efficient web trading platform. The platform allows clients to access various financial instruments and execute trade quickly.

The web platform also features social trading, including the CopyTrader and CopyPortfolios.

The mobile app is available for both Android and iOS devices. It’s designed to provide a seamless trading experience for users, featuring all functionalities and features the web platform contains. You can invest, trade, and manage your portfolio on the mobile app.

Freetrade vs. eToro: Deposit and Withdrawal Policies

Freetrade: Deposit and Withdrawal Policy

Freetrade provides a 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 there is a 250-lifetime limit on this method. 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 they may include other additional fees.

Withdrawal 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.

eToro: Deposit and Withdrawal Policy

eToro offers a USD-based account allowing deposits and withdrawals in various payment methods.

eToro Deposit Options

You can deposit to your eToro account through eToro Money, Credit/Debit Cards, Paypal, Neteller, Skrill, Rapid Transfer, iDEAL, Klarna/Sofort Banking, Bank Transfer, przelwy24, and Online Banking – Trustly.

All these deposit-available methods are instant except for bank transfers, which may take 3-7 business days to reflect on your account. You can use any available method in your region.

eToro Withdrawal Options

You can withdraw your funds from eToro to your original deposit method. If eToro cannot process funds to the original deposit method, you will be asked to provide an alternative payment method.

In addition, you can also withdraw to your eToro Money account, from which you can add your payee bank account where you want to send your funds.

Typically, you will receive an email confirming your withdrawal status and payment within two business days of your request. However, your withdrawal may take up to 10 business days to reach its destination.

Freetrade vs. eToro: Customer Service

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 their response. Also, you can visit the Freetrade community of investors to look for solutions, support, and advice.
  • Social Media – The Freetrade customer support is active on Twitter, Instagram, LinkedIn, and Facebook. You can use these channels to make complaints through the chatbox and get updates about the broker, 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.

eToro Customer Service

  • Help Center—The eToro help center contains various informative articles and answers to common questions and issues clients may encounter while navigating the platform.
  • Live Chat – eToro live chat customer service is only available to Club members, a privilege you can attain by having at least $5,000 in equity in your account.
  • Email and Ticket System – Clients can submit support tickets through the trading platform and send emails to the customer support team. Response time usually varies, but generally, you will receive a response in 1-3 days.
  • Social Media – eToro maintains a presence on social media, and users can easily send direct messages to address their issues. Also, they provide updates to clients on social media.

Freetrade vs. eToro: User Opinions and Ratings

Let’s look at the Trustpilot Investment community, a reputable website investors use to provide honest ratings and comments. In addition, we will check the Google Play Store and Apple Store to see what app users say about the broker’s mobile apps.

Freetrade User Opinions and Ratings

The Freetrade platform, which boasts over 3,000 reviews and ratings on Trustpilot, holds an average rating of 3.7 out of 5. A common grievance among investors is the lack of options to trade CFDs and cryptocurrencies.

freetrade broker Trustpilot rating

Similarly,

The Freetrade mobile app is highly regarded, receiving a rating of 4.3 out of 5 on both the Google Play Store and the Apple App Store.

eToro User Opinions and Ratings

eToro, the social investment platform, has accumulated over 20,000 reviews and ratings on Trustpilot, achieving a 4.4 out of 5-star rating. User reviews generally express satisfaction with the trading platform, although a small number of people report experiencing app glitches.

eToro reviews on Trustpilot

Similarly, the eToro app has been downloaded over 10 million times on the Google Play Store and has received more than 129,000 reviews and ratings, earning a 3.9 out of 5-star rating.

eToro reviews on Google Play Store

Also, on the Apple App Store, eToro has over 8,000 reviews, where it scores 3.8 out of 5 stars.

etoro app

Freetrade vs eToro: Our Opinion

Both Freetrade and eToro offer attractive features for investors, notably their commission-free trading plans, which have become a standard in the industry. They provide robust trading platforms and responsive customer support.

eToro stands out with its diverse product offerings. It is a multi-asset platform that includes stocks, shares, funds, and a cryptocurrency investment program, along with the ability to trade Contracts For Difference (CFD). This variety caters to different investor types and strategies. Conversely, Freetrade is somewhat limited; it only allows trading in shares, stocks, funds, and commodities, with no option for cryptocurrency investments.

eToro also excels with its advanced trading tools, social trading features, copy-trading capabilities, and extensive range of research tools, making it more suitable for both novice and experienced investors seeking comprehensive trading resources.

Service-wise, the platforms differ significantly. Freetrade offers an investment account and other accounts within a tax-free wrapper (SIPP and ISA).eToro has recently begun offering ISAs alongside other account types thanks to a collaboration with MoneyFarm.

Ultimately, the choice between Freetrade and eToro will depend on your specific investment needs, goals, and risk tolerance. Both platforms excel in their respective offerings and cater to different types of investors, so it’s important to consider what features are most important to you when making your decision.

Related Articles