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What are our picks of the best investment trading apps?
We carried out research on a wide range of investment trading apps and have listed our findings below. You’ll find more details about the trading apps we chose, and how we ranked the providcrs, in our methodology.
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eToro – Trading Platform
5.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.
Fees
Trading fee: no charge. Platform fee: no charge
Choice of investments
Over 3,000 shares and 300 ETFs, 32 commodities and 20 indices
App functionality
Advanced technical charting and extensive company information and newsfeed
76% of retail investor accounts lose money when trading CFDs with this provider.
Fees
Trading fee: no charge. Platform fee: no charge
Choice of investments
Over 3,000 shares and 300 ETFs, 32 commodities and 20 indices
App functionality
Advanced technical charting and extensive company information and newsfeed
Why We Picked It
eToro has 30 million customers in more than 100 countries, with a focus on social and copy tradingto allow beginner investors to interact with more experienced investors.
It charges no trading or platform fees but accounts are held in US dollars with UK clients charged a 0.5% currency conversion fee when funds are deposited. This fee is not incurred if customers also open a (free) eToro Money account and convert their funds to dollars before transferring it to their investment account. There’s also a $5 withdrawal fee and an inactivity fee of $10 per month (after 12 months with no log-in activity).
Clients can trade by app or on the website, with a minimum investment of $10. Accounts offered include a general trading account and ISA (via a partnership with robo-advisor Moneyfarm).
It offers a good choice of investments, including foreign exchange, commodities and cryptocurrencies, together with the option of buying fractional shares.
The app is designed to be simple to use but has a mixed rating on app stores. The app offers extensive advanced charting options, together with comprehensive company information and analysis. It offers a filtered stream of both company-specific news and comments from the community forum. Shares and ETFs can be filtered using various criteria, such as most popular and risers and fallers.
Overall, eToro is likely to appeal to investors wanting a trading app with powerful functionality, and trading in US, rather than UK, shares.
Pros & Cons
- Simple-to-use app
- Advanced charting and functionality
- No trading or platform fees
- Social and copy trading
- Option of fractional shares
- Foreign exchange conversion fee of 0.5% (without eToro Money)
- Withdrawal fee and inactivity fees
- More limited selection of investments
Example fees* and special offers (where available)
Portfolio of £1,000: no fee
Portfolio of £10,000: no fee
Portfolio of £50,000: no fee
(Using eToro Money account)
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IG – Online Trading Platform
5.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.
Fees
Trading fee: UK shares £8, US shares £10, others 0.1%. Platform fee: £24 per quarter/£96 per year
Trading fee for frequent traders: UK shares £3, US shares no fee (if 3 or more trades in previous calendar month). Platform fee is not charged for traders making three or more trades in the previous quarter
Choice of investments
Offers 13,200 UK, US, European and Australian shares, as well as almost 3,000 ETFs and 200 investment trusts
App functionality
Advanced technical charting and extensive company information and newsfeed
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
On IG's Website
Fees
Trading fee: UK shares £8, US shares £10, others 0.1%. Platform fee: £24 per quarter/£96 per year
Trading fee for frequent traders: UK shares £3, US shares no fee (if 3 or more trades in previous calendar month). Platform fee is not charged for traders making three or more trades in the previous quarter
Choice of investments
Offers 13,200 UK, US, European and Australian shares, as well as almost 3,000 ETFs and 200 investment trusts
App functionality
Advanced technical charting and extensive company information and newsfeed
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Why We Picked It
IG is a FTSE 250 company with over 300,000 clients in 17 countries.
Its flat platform fee may appeal to investors with higher value portfolios, while no platform fee is charged for investors making 12 trades in a year. However, the platform fee may be expensive for occasional traders with lower-value portfolios.
It offers frequent traders one of the lower share trading fees of £3 for UK shares (and no fee for US shares). However, occasional traders will be charged a higher trading fee of £8 and £10 for UK and US shares respectively. It also charges one of the lower foreign exchange fees of 0.5%.
Clients can trade by app or on the website, with a minimum investment of £50. Clients also have the option of trading via third party platforms including the popular MetaTrader 4.Accounts offered include a general trading account, ISA and SIPP.
IG offers an extensive range of investments.The app is tailored more to experienced investors rather than beginners but has a high rating on app stores. The app offers extensive advanced charting options, together with comprehensive company information, analysis and news streams. Shares and ETFs can be filtered using various criteria, such as most popular and risers and fallers.
Overall, IG is likely to appeal to more confident investors who want a trading app with advanced functionality and a wide range of investments.
Pros & Cons
- Advanced charting and functionality on the app
- Flat platform fee (free for frequent traders)
- Low trading fee for frequent traders of UK and US shares
- One of widest ranges of investments
- Low foreign exchange fee of 0.5%
- App better suited for experienced investors
- High trading and platform fees for occasional traders
- No fractional share ownership
Example fees* and special offers (where available)
Portfolio of £1,000: £144
Portfolio of £10,000: £144
Portfolio of £50,000: £144
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AJ Bell – Dealing Account
5.0
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.
Fees
Trading fee: shares £9.95, funds £1.50. Platform fee: shares 0.25% (capped at £42 per year), funds (tiered) 0.25% (up to £250,000), 0.10% (£250,000-£500,000), no charge (£500,000+)
Trading fee for frequent traders: shares £4.95 (10 or more deals in previous month)
Choice of investments
Over 8,200 shares across 24 international markets, as well as 3,700 funds, 3,400 ETFs and 450 investment trusts
App functionality
Basic company information and charting, no filtered newsfeed
On AJ Bell's Website
Fees
Trading fee: shares £9.95, funds £1.50. Platform fee: shares 0.25% (capped at £42 per year), funds (tiered) 0.25% (up to £250,000), 0.10% (£250,000-£500,000), no charge (£500,000+)
Trading fee for frequent traders: shares £4.95 (10 or more deals in previous month)
Choice of investments
Over 8,200 shares across 24 international markets, as well as 3,700 funds, 3,400 ETFs and 450 investment trusts
App functionality
Basic company information and charting, no filtered newsfeed
Why We Picked It
AJ Bell is a FTSE 250 company with over 490,000 clients.
It charges one of the higher share trading fees and also charges for buying funds. However, its platform fee is at the lower end of the mainstream providers and is capped for shares. It also has a mid-range foreign exchange fee of 0.75% (up to £10,000).
Clients can trade by app or on the website, with no minimum investment. Accounts offered include a general trading account, ISA, Lifetime ISA, Junior ISA and SIPP.
It offers a wide choice of investments but does not offer fractional shares.
The app is designed to be simple to use and scores highly on the app store ratings. It offers only a basic charting option but a decent level of company information, including key financial metrics and a link to company reports. However, the app does not have a filtered news stream by company, although extensive market news is provided. Shares can be filtered by risers and fallers on the website but not the app.
AJ Bell also has a low-cost share trading app called Dodl. It charges no share trading fees and an annual platform fee of 0.15% (with a minimum of £1 per month) but offers only a limited selection of investments, including 50 shares from the FTSE 350.
Overall, AJ Bell tends to be a good all-rounder, offering a mid-range platform fee, simple app and excellent customer support, however share trading fees could mount up for regular traders.
Pros & Cons
- Simple-to-use app
- One of lower platform fees
- Option of low-cost Dodl account
- Wide range of investments
- Wide range of account types
- Limited charting options
- No company-specific newsfeed on app
- High trading fee for shares
- Charges trading fee for funds
- No fractional share ownership
Example fees* and special offers (where available)
Portfolio of £1,000: £71
Portfolio of £10,000: £94
Portfolio of £50,000: £173
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Our Pick: BEST FOR FRACTIONAL SHARES
Trading 212 – Invest
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.
Fees
Trading fee: no charge. Platform fee: no charge
Choice of investments
Over 12,000 shares, investment trusts and ETFs across the UK, US and Europe
App functionality
Advanced technical charting, stock filters by category, limited company information
Fees
Trading fee: no charge. Platform fee: no charge
Choice of investments
Over 12,000 shares, investment trusts and ETFs across the UK, US and Europe
App functionality
Advanced technical charting, stock filters by category, limited company information
Why We Picked It
Trading 212 is a UK fintech start-up offering commission-free trading. It is profit-making and currently has 2 million clients.
It charges no platform or share trading fees and the lowest foreign exchange fee of 0.15%. It’s also rolling out a new feature whereby customers can hold multiple currencies within the account, including US dollars and euros.
Clients can trade by app or on the website, with a minimum investment of £1. Accounts offered include a general trading account and ISA.
It offers a wide choice of investments, together with the option of buying fractional shares.
The app is designed to be simple to use and scores highly on app store ratings. The app offers extensive advanced charting options, together with basic performance data but company analysis is limited. Shares and ETFs can be filtered using various criteria, such as most popular, high dividend, growth, volatility and speculative.
Trading 212 also provides access to a web-based community trading forum, demo trading account and guides to investing.
Overall, Trading 212 may appeal to investors looking for an easy-to-use, low-cost app, particularly for investors in overseas shares.
Pros & Cons
- Simple-to-use app
- Advanced charting tools
- No trading or platform fees
- Wide range of investment options
- Lowest foreign exchange fee of 0.15%
- Community trading forum
- Limited company information on the app
- Limited research available
Example fees* and special offers (where available)
Portfolio of £1,000: No fee
Portfolio of £10,000: No fee
Portfolio of £50,000: No fee
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Our Pick: BEST FOR HIGH-VALUE PORTFOLIOS
interactive investor – Trading Account
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.
Fees
Trading fee: shares £3.99 for UK and US shares, £9.99 for other international shares, funds £3.99. Platform fee: Investor Essentials plan £4.99 per month, Investor plan £11.99 per month and Super Investor plan £19.99 per month
One monthly free trade on Investor plan and two free monthly trades on Super Investor plan
Choice of investments
Over 40,000 investment options, including shares from 17 international markets and over 3,000 funds, 1,000 ETFs and 600 investment trusts
App functionality
Basic charting and company information with filtered newsfeed
On Interactive Investor's Website
Fees
Trading fee: shares £3.99 for UK and US shares, £9.99 for other international shares, funds £3.99. Platform fee: Investor Essentials plan £4.99 per month, Investor plan £11.99 per month and Super Investor plan £19.99 per month
One monthly free trade on Investor plan and two free monthly trades on Super Investor plan
Choice of investments
Over 40,000 investment options, including shares from 17 international markets and over 3,000 funds, 1,000 ETFs and 600 investment trusts
App functionality
Basic charting and company information with filtered newsfeed
Why We Picked It
interactive investor is one of the larger platforms, with 400,000 clients. It was purchased by global investment company abrdn in 2021 but remains a whole-of-market platform.
ii offers three main plans, each with a flat platform fee. The Investor Essentials plan costs £4.99 per month (includes an ISA but not a free monthly trade) but is limited to portfolios of up to £50,000. The Investor and Super Investor plans cost £11.99 and £19.99 per month respectively and include free monthly trades and a Junior ISA.
The share trading fee is £3.99 for UK and US shares and funds. It charges the highest foreign exchange fee (1.5% below £25,000) but has recently added the option to hold nine currencies within the account.
Cash balances earn 2.00% interest (gross) up to the value of £10,000. Balances between £10,000.01 and £100,000 earn 2.75%, from £100,000.01 to £1 million it’s 3.75%, and anything over £1 million earns the top rate of 4.75%.
Clients can trade by app or on the website, with no minimum investment. Accounts offered include a general trading account, ISA, Junior ISA and SIPP.
It offers a wide choice of investments but does not offer fractional shares.
The app is designed to be straightforward to use but has one of the lowest ratings on app stores. It offers only basic charting and company information, although it provides a filtered newsfeed by company. Shares can be filtered by risers and fallers.
Overall, interactive investor may be a good choice for investors with higher value portfolios, due to the flat, rather than proportional, platform fee.
Pros & Cons
- Simple-to-use app
- One of lower share trading fees
- Flat platform fee good for higher value portfolios
- Wide range of investments
- Wide range of account types
- Limited company information on the app
- High trading charge for funds and overseas (non-US) shares
- Platform fee is expensive for smaller value portfolios
- Highest foreign exchange fee of 1.5% (up to £25,000)
- No fractional share ownership
Example fees* and special offers (where available)
Portfolio of £1,000: £108 (Investor Essentials plan)
Portfolio of £10,000: £108 (Investor Essentials plan)
Portfolio of £50,000: £168 (Investor plan)
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Hargreaves Lansdown – Fund and Share Account
4.5
Our ratings take into account a product's rewards, fees, rates and other category-specific attributes. All ratings are determined solely by our editorial team.
Fees
Trading fee: shares £11.95 (0-9), funds no charge. Platform fee: shares no charge, funds (tiered) 0.45% (0-£250,000), 0.25% (£250,000-£1 million), 0.10% (£1 million-£2 million), no charge (£2+ million)
Trading fee for shares for frequent traders: £8.95 (10-19), £5.95 (20+) (based on previous month’s trades)
Choice of investments
Over 8,500 UK, US, Canadian and European shares, 3,000 funds, 1,400 ETFs and 400 investment trusts
App functionality
Extensive company information and news, basic charting and advanced trading tools
Fees
Trading fee: shares £11.95 (0-9), funds no charge. Platform fee: shares no charge, funds (tiered) 0.45% (0-£250,000), 0.25% (£250,000-£1 million), 0.10% (£1 million-£2 million), no charge (£2+ million)
Trading fee for shares for frequent traders: £8.95 (10-19), £5.95 (20+) (based on previous month’s trades)
Choice of investments
Over 8,500 UK, US, Canadian and European shares, 3,000 funds, 1,400 ETFs and 400 investment trusts
App functionality
Extensive company information and news, basic charting and advanced trading tools
Why We Picked It
As well as being a FTSE 100 company, Hargreaves Lansdown (HL) is one of the largest trading platforms with over 1.7 million clients.
One of HL’s strengths is customer service, particularly for clients wanting some additional support. However, this level of support comes at a cost – HL has one of the highest share trading fees and the highest platform fee at 0.45% (for portfolios under £250,000) for funds. That said, there is no platform fee for holding shares or trading fee for funds but it has one of the higher foreign exchange fees (starting at 1.0%).
Clients can trade by app or on the website, with a minimum investment of £1. Accounts offered include a general trading account, ISA, Lifetime ISA, Junior ISA and SIPP.
It offers a wide choice of investments but does not offer fractional shares.
The app is designed to be simple to use and scores highly on the app store ratings. It offers only a basic charting option but excels at providing company information, including key financial metrics, a company-specific news stream and HL commentary (for companies covered by the share research service). Shares can be filtered by risers and fallers on the app.
Overall, HL may be a good option for investors willing to pay the extra cost for a premium service, or for more frequent traders who can benefit from the reduced share trading fee.
Pros & Cons
- Simple-to-use app
- Extensive company information provided on the app
- No trading fee for funds or platform fee for shares
- Wide range of investments
- Full range of account types
- Limited charting options
- High trading fees for shares and platform fees for funds
- Foreign exchange fee of 1.0% (up to £5,000)
- No fractional share ownership
Example fees* and special offers (where available)
Portfolio of £1,000: £74
Portfolio of £10,000: £94
Portfolio of £50,000: £184
* Example fees: for details please see section below “What assumptions did we use for our fee calculations?”.
Methodology
We applied three main criteria in selecting our list of best investment trading apps:
- Does the app offer a good level of functionality for investors?
- Does the platform provide access to a range of investments from different international markets?
- Does the platform have a good rating on consumer review site Trustpilot? If the platform did not currently have any reviews on Trustpilot, we considered its ratings on other review sites.
We compared different features across the leading investment trading apps, with the greatest weight given to the level of fees, the range of investments offered and the quality of information provided on the app.
We also considered other features, including the option for desktop trading, advanced trading features, customer support and research, foreign transaction fees, the option of holding fractional shares and the types of accounts on offer.
In addition, we checked that the trading platforms were authorised by the FCA and reviewed the level of customer complaints using data from the FCA.
We overlaid this research with editorial judgment to arrive at our Forbes star ratings.
What assumptions did we use for our fee calculations?
We calculated the fees by platform based on the following assumptions:
- Type of investments: split 50% shares and 50% funds (or 100% shares if funds were not offered).
- Frequency of trading: buying or selling one investment per month, totalling 12 in a year, split equally across funds and shares (or 100% shares if funds were not offered). If free monthly trades were offered, we assumed that half of these were able to be utilised and remaining trades incurred a fee.
- Platform fees: we assumed that the portfolio was split equally between funds and shares, as platform fees can vary significantly between these. For platforms not offering funds, we calculated the platform fee based on holding shares only. For platforms offering reduced platform fees for frequent traders, we assumed that half of these were able to be utilised over the year.
- Value of portfolio: we calculated the fees for three different portfolio values, being £1,000, £10,000 and £50,000.
- Type of accounts:for providers offering different accounts (such as interactive investor), we calculated the lowest cost option for each portfolio value.
What is an investment trading app?
Investment trading apps offer investors a means of buying and selling stocks and shares, funds, investment trusts, exchange-traded products and other assets directly, rather than indirectly through a financial advisor.
In its simplest form, an investment trading app provides software for investors to make their trades via an application on their phone or tablet, although many platforms also offer desktop and telephone dealing.
The app market has grown significantly in recent years. According to the App Radar tool from data firm SplitMetrics, the estimated number of app downloads stood at 6,848,670 to 14 December 2023. From the beginning of 2023 to 14 December, downloads to the top 8 app providers alone stood at 1,127,383. These figures, included in Table 1 below, refer to global downloads via the Google Play Store.
Table 1: Investing app downloads
App provider | Lifetime downloads to 14 December 2023 (estimated) | Downloads 1 January to 14 December 2023 (estimated) |
---|---|---|
AJ Bell | 92,217 | 15,385 |
Freetrade: ISA, Invest, Trade | 748,038 | 62,418 |
Hargreaves Lansdown | 960,434 | 83,210 |
IBKR Mobile | 2,161,823 | 374,935 |
Interactive investor | 101,118 | 22,590 |
Moneybox Save And Invest | 1,327,476 | 240,628 |
Plum: Smart Investing & Saving | 1,259,961 | 324,019 |
Wombat Invest: Stocks & Shares | 197,603 | 4,198 |
Total | 6,848,670 | 1,127,383 |
Source: SplitMetrics/App Radar |
Investors are able to view their investments in real-time on the app, enabling them to monitor their portfolio and make timely investment decisions. In addition, apps typically offer advanced features to allow orders to be placed automatically.
However, one of the disadvantages of apps is the risk of impulse and over-trading. Shares typically should be seen as a long-term investment as speculating on short-term price movements is challenging, even for professional investors.
What assets can you trade on investment apps?
Investment apps offer a wide range of assets, including shares in UK and international markets, exchange-traded funds (ETFs) and investment trusts.
A few of our selected providers also offer trading in more specialist assets, including foreign exchange, commodities and cryptocurrencies. However, these assets are highly volatile and likely to be suitable only for experienced investors.
The Financial Conduct Authority’s ‘Financial Lives‘ survey published in 2023 shows that the main reason (51%) given by respondents when asked why they invest was to potentially gain higher returns than offered on savings products. The second most important reason (49%) was investing to provide an income in retirement, while the third highest response (43%) was to invest for a rainy day.
According to the survey, the most commonly held investments in May 2022 were shares/equities, held by 21% of respondents, followed by stocks and shares ISAs (17%). Investment funds were held by 9.1% of respondents.
How do I open a trading app account?
The account opening process can usually be carried out online or via the app, and the major platforms state it should take around 10 minutes. You’ll need to provide some basic information, such as bank account details, debit card details (for a lump sum investment) and your National Insurance number.
You may have to supply further documents to support the verification of your identity, although these checks may be carried out electronically during the initial application process. When these checks are complete, and funds have been received into your account, you will be set up to start trading on the app.
You can trade UK shares on a real-time basis from 8 am to 4.30 pm when the London Stock Exchange is open. After logging into the app, search by company name or ‘ticker’ to select the share you want to buy.
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What trading fees will I pay?
There are various types of fees charged by trading platforms:
1. Share trading fee
This is a flat fee charged by the platform each time you buy or sell shares. Some platforms charge no share trading fee, while others may charge between £6 to £12 per trade. Trading fees for funds vary from zero to the same fee as trading shares.
2. Platform fee
This is an annual fee charged for holding the shares and funds on your platform. Some platforms charge no fee for this, others charge a flat fee and some charge a percentage, typically 0.25% to 0.45% of the value of your portfolio.
These fees will usually be taken out of any cash held on your account or you can pay fees directly by debit card. However, the platform is likely to sell a proportion of your shares as a last resort if fees remain unpaid.
It’s also worth looking at the types of investments that incur a platform fee as some platforms charge for holding funds, but not for shares. When a platform fee is charged for holding shares, this is sometimes capped at a maximum amount per year.
There are two types of percentage-based platform fees:
- Tiered fee: this is the most usual type of platform fee, whereby you pay different fees on different ‘slices’ of your portfolio. For example, if you have a portfolio worth £300,000, you might pay 0.45% on the first £250,000, then 0.25% on the next £50,000.
- Non-tiered fee: a small number of providers charge a non-tiered fee, whereby you pay the same fee across your whole portfolio. For example, if you have a portfolio of £300,000, you would pay 0.2% on the whole £300,000.
3. Foreign exchange fee
If you buy or sell shares denominated in a currency other than pounds sterling, platforms charge a foreign exchange fee. This is also referred to as a foreign currency conversion fee and typically varies from 0.5% to 1.5%. Some platforms also charge a higher trading fee for overseas shares.
A small number of platforms allow you to hold foreign currency in your account, which enables you to convert it once and use this money for buying shares and holding the proceeds from selling shares in the local currency.
Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.
4. Other fees
Some of the platforms charge other types of fees, such as inactivity fees and withdrawal fees (for accounts held in an overseas currency) and fees for trading by telephone.
Although not technically a fee, platforms also make money on the buy-sell spread on shares. For example, you might be looking to buy a share with a buy-sell spread of 98-100 pence. This means that you would pay 100 pence to buy a share, and receive 98 pence to sell a share.
Some platforms may offer more competitive buy-sell spreads than others, and less traded shares, such as FTSE Small Cap companies, typically have wider spreads than FTSE 100 companies.
What other apps could I consider?
The investment trading app market has become increasingly competitive in recent years. Our selections above aim to offer would-be investors a range of providers, each with features that could suit their particular investing style.
The list is not exhaustive, however, and will be bolstered further when Robinhood enters the UK market in 2024.
Are investment trading apps worth it?
Investment trading apps may appeal to investors on the move who are comfortable making trading decisions from a relatively small screen compared to a desktop.
While most trading platforms offer apps, it’s worth comparing fees and the range of investments as these can vary widely by provider. Some investors may also look for more advanced functionality from the app in terms of technical analysis and charts.
A recent FCA survey revealed that nearly 10% of all adults in the UK use a DIY (or ‘direct to consumer’ platform), significantly higher than in 2020. Interestingly, there is a much higher uptake by men than women, and 25-34 year olds are most likely to invest in this way.
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Explore over 4,000 stocks. Buy in bulk, or invest in fractional shares
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Your capital is at risk. Other fees apply. For more information, visit etoro.com/trading/fees.
Frequently Asked Questions
Are investment trading apps considered safe?
Investment trading apps have similar security protocols to desktop trading, such as password, PIN, biometric and other security requirements such as two-step verification.
However, investors should ensure that they log out of the app after use and setting up additional security features on their mobile device to prevent unauthorised use. Be mindful not to confuse security safety with the risks of investing.
How much money do I need to open a trading app account?
This depends on the platform, but many allow investors to open an account with as little as £1, or £25 per month for platforms offering a monthly investment option.
However, investors will need to add further funds to the account, depending on the cost of the investment they’re looking to purchase.
What type of trading app account should I choose?
Tax treatment depends on one’s individual circ*mstances and may be subject to future change. The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of tax advice.
We’ve looked at general investment accounts that allow you to buy and sell investments via an app, however, there are a variety of tax-efficient alternatives. We’ve also produced guides on our pick of the best Individual Savings Account (ISA) providers, Self-Invested Personal Pension (SIPP) providers and Junior Stocks and Shares ISA (JISA) providers.
ISAs and SIPPs are types of ‘tax wrapper’, allowing you to pay no income tax on dividends and no capital gains tax on any profit made on buying and selling your shares. In the case of SIPPs and JISAs, you won’t be able to access the money until you reach a certain age.
Some, but not all, of the platforms listed also offer app-based ISA and SIPP accounts, as well as general investment accounts.
What is our pick of the best ‘day trading’ app?
Day trading is the practice of buying and selling shares over a short period of time, typically within a day. Day traders rely on volatility in share prices and can use investment apps to carry out their specialist form of trading.
However, day traders need to be extra wary of the charges they incur as these can rack up significantly, especially where a flurry of trades is carried out in a short space of time.
Some factors that would-be day traders need to consider is whether their app provider:
- charges a low share dealing fee
- provides access to a comprehensive range of shares, including those in different international markets
- has a good rating for features such as customer service
Read our in-depth review for a more detailed look at the best day trading apps.
What is our pick of the best trading app for beginners?
To help beginners looking for the best trading app, we’ve put together this in-depth look at the best trading platforms that are suitable for beginners. Most of the selections also provide an app version of their product offering.
What are fractional shares?
Fractional shares are a proportion of one share, for example, 0.2 of a share. Why might you want to buy fractional shares? Well, if the company share price is very high (as with many US shares) and/or you want to invest a small amount that’s less than the price of one share.
Only some of the investment trading apps on our list offer fractional share ownership. If you buy fractional shares, you will also receive the relevant fraction of any dividend per share.
What tax will I pay on buying and selling shares?
You will be required to pay Stamp Duty Reserve Tax (SDRT) when you buy UK shares, calculated at 0.5% of the value of the transaction. This is not usually charged on buying overseas shares, although other taxes may be charged.
You may also have to pay capital gains tax if you sell the shares for a higher price than the price you paid. This is charged on the ‘profit’ (the gain you make) although the capital gains allowance is £6,000 for the current tax year – this means that you do not have to pay capital gains tax unless you make a total profit of more than £6,000.
In addition, you may have to pay income tax on any dividends received from your investments. However, as well as your personal allowance (£12,570 in the current tax year), you have an additional dividend allowance of £1,000 (in the current tax year).
As mentioned earlier, you do not have to pay income or capital gains tax on shares held in ISAs, SIPPs or JISAs.
What is a ‘limit order’ and ‘stop loss’?
A limit order is an order to buy or sell shares at, or better than, a specified price. So if you set a buy limit order at 100 pence, it would only be executed if the price was 100 pence or lower.
Similarly, a sell limit order is only executed at that price or higher. It can be a good way of trying to obtain a good price for your share trade without having to monitor the share price in real time.
A ‘stop loss’ can also be a useful tool to limit your downside exposure from investing in shares. This is an order to sell shares if the price falls to, or below, a level you set.
How does monthly investing work?
Some of the investment trading apps offer monthly investing, usually with a minimum of £25 per month. You can set up a direct debit to transfer the money into your trading account on a monthly basis, which is used to buy the maximum number of shares possible each month.
If the share price is higher than the funds in your trading account, the money will accumulate until it is sufficient to buy at least one share.
Monthly investing allows you to benefit from ‘pound-cost averaging’, which aims to smooth out the fluctuations of the stock market as you pay the average price of the investment over the period.
However, it’s worth checking the trading fees on monthly investing. Many of the platforms charge no, or a lower trading fee, for this option. If this is not the case, the share trading fee can become disproportionately expensive for smaller monthly contributions.
What do I need to know about buying US shares?
Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any regulatory protection as in the UK.
As with overseas shares, you will have to pay any share trading fee and applicable foreign currency exchange fee if you are looking to trade in US shares.
You will also be asked to complete a W-8BEN form (valid for three years) which allows you to benefit from a reduction in withholding tax for qualifying US dividends and interest from 30% to 15%. Holding US shares also carries exposure to foreign exchange risk. If the pound strengthens against the dollar, your shares will be worth less in sterling (and vice versa).
As with UK shares, any profit on US shares will be subject to capital gains tax, unless you hold the shares in an ISA or SIPP.
What regulatory protection should I look for?
When choosing an investment trading app, you should check the FCA register to ensure that your platform is authorised. This means that you may have access to the Financial Ombudsman Service and the Financial Services Compensation Scheme (FSCS) if an issue with the platform arises (not your investment), this will depend on what regulated activity the firm was carrying out for you and whether any exceptions apply.
The Financial Ombudsman Service will consider complaints against trading providers and may be able to resolve your complaint if the firm fails to deal with it properly.
The Financial Services Compensation Scheme will consider claims if your trading provider goes out of business and owes you money, but this relates only to certain investment products.
If the product is covered, the scheme can pay up to £85,000 per investor. It’s worth checking the protection offered by your investment trading platform – some platforms are structured so that investments are held in ‘trust’ to protect them in the event of the firm running into financial difficulties.
What should I consider before share trading?
Investing in shares can be a good way to produce higher returns than cash-based investments. However, investing puts your capital at risk, your investment can go down as well as up, and you may not get your money back.
Investing in a diversified portfolio of shares via a fund, investment trust or exchange-traded fund, may help to reduce your exposure to an individual company underperforming. However, if you are unsure as to the right path, you should seek professional financial advice.
Information provided on Forbes Advisor is for educational purposes only. Your financial situation is unique and the products and services we review may not be right for your circ*mstances. We do not offer financial advice, advisory or brokerage services, nor do we recommend or advise individuals or to buy or sell particular stocks or securities. Performance information may have changed since the time of publication. Past performance is not indicative of future results.
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Jo GrovesForbes Staff
Having worked in investment banking for over 20 years, I have turned my skills and experience to writing about all areas of personal finance. My aim is to help people develop the confidence and knowledge to take control of their own finances.