Freetrade vs Trading 212: Best Fee Free UK Stock Trading Platform?

Stock trading is getting easier and easier thanks to online platforms and apps. People in the UK are now able to trade stocks with their smartphones and tablets like never before – however, what can put some people off is the presence of fees. If you want to trade for free, however, there are plenty of options opening up. Two strong examples being Freetrade and Trading 212.

In the US, fee free stock investing has grown quickly with the likes of Robinhood. In the UK, meanwhile, we’re now seeing a similar boom. Stock trading apps such as Freetrade and Trading 212 along with the likes of Stake, eToro and Revolut will all let you build and trade with commission free stock portfolios. But how does it all work, and what is the best trading app between Freetrade vs Trading 212?

Freetrade vs Trading 212

In this comparison, I’m going to take a look at Freetrade vs Trading 212. I’ll examine whether either of the services deserve the mantle of best stock trading app in the UK, and whether or not they are worth building your stock portfolios through.

Quick Summary

• Both Freetrade and Trading 212 allow you to start trading stocks for free, without commission.
• Trading 212 offers more markets and stocks overall than Freetrade. 
• Trading 212 tends to make money through spreads, while Freetrade will charge a small FX fee (0.45%) on any foreign currency stocks you trade.
• Fractional shares are available with both Freetrade and Trading 212.
• Both platforms are very easy to get started with and the apps are straightforward to use.
• Freetrade is ideal for beginners, whereas Trading 212 is aimed at slightly more advanced users.
• Trading 212 also offers crypto and CFD trading where Freetrade deals exclusively in Stocks and Funds.

What is Commission Free Investing?

Online trading is nothing new. However, on the whole, prior to free trading platforms, you could expect to pay up to £12 with each stock transaction. Unless you’re looking at making big returns with a great deal of confidence, that is going to add up to be pretty cost-ineffective. Therefore, many people just getting started in UK stocks – or even US stocks – are looking into commission free investing.

Fee Free investing allows you to make stock trading decisions without having to pay extra costs to do so. As mentioned, there are a few investing apps out there which let you take advantage of this. However, what you will need to keep in mind is the fact that most commission free investment systems will ask you to pay subscription fees or some sort of FX fees. Therefore, you’re going to need to weigh up the costs and the benefits.

Which is the Best Fee Free Trading App?

The best fee free trading apps are those which offer great value. To me, it needs to be genuine value. The best investment apps might give you tons of support and lots of stock options, but ultimately, if it’s going to cost you dearly, is it really worth it?

Right now, there might not be any one best trading app that’s free from fees. The best mobile investment apps without fees and costs are, for my money, easy to use – and which offer a wide array of options. If a stock trading app is worth paying for, it needs to offer genuine value.

That’s why I want to take a closer look at Freetrade vs Trading 212. These are two of the most popular fee-free trading services available in the UK right now. Therefore, before you start playing around, make sure you take a look at my findings with these two behemoths of the market.

Freetrade

What is Freetrade?

Freetrade is a free stock trading app based platform – funnily enough – that lets you trade in UK stocks and US stocks alike. It’s a simple, streamlined app with an appealing interface, ideal for those who want to get into trading stocks, but who might not have all the know-how at their disposal. Anything you invest is also protected by the FSCS, which means any money you make up to £85,000 is safe.

Freetrade is, on the face of things, actually pretty easy to get into. It’s certainly easy to download the app, to set up an account and to fund it. If you don’t want to pay with your bank account, you can use Apple Pay or Google Pay if you prefer.

Is Freetrade Really Free?

Freetrade is, up to a point, completely free. They recently overhauled their model to allow instant trading to take place for free – whereas you used to need to pay £1 for an instant trade. Providing you’re investing in UK stocks, you won’t have to pay any extra fees or costs on top. There’s also no minimum deposit for Freetrade, which means that you can buy stocks from as little as £2 (minimum trade value). Whether that will get you a decent return or not, of course, remains to be seen (although you might get some bargains in the current climate!)

Fees will start applying if you trade in stocks from other countries. There’s a 0.45% FX fee that applies here. Some might think this goes against the idea of a ‘Freetrade’ app, but ultimately, it’s commission free. The app needs to make money somehow, and FX fees on foreign trades is petty common. How much impact that will have on your wallet really depends on how much and how often you are going to trade foreign stocks.

Is Freetrade Good for Beginners?

The Freetrade app is a great platform for starter investors. All you need to do is supply ID information, and you can then fund your account and start adding to your stock portfolio.

The app interface is pretty fast and breezy. You simply cycle through available UK stocks and US stocks, select how much you want to buy, and start trading. One criticism I would have is that the data available within the app for each stock isn’t as detailed as you get with Trading 212. How much of a difference that will make to you is really down to individual preference, experience level and whether or not you already utilise a standalone data and analysis platform such as Simply Wall St.

The fact is, there are stock market apps out there which go into an incredible amount of detail. At the time of writing, while Freetrade does offer some valuable insight, it might not be enough for some users. The app does, however, seem to be receiving plenty of regular support and upgrading, meaning it might not be too long before it’s ready to compete in this area.

How Does Freetrade Make Money?

Freetrade makes money, simply, by charging a small 0.45% FX fee on all foreign stock trades. Along with that they also offer a stocks and shares ISA, which might be appealing if you are concerned about the tax implications of your stock portfolio, which costs £3 per month.

Whether or not that £3 per month represents good value for money will come down to the size of your portfolio in the long run. If you are going to be liable for significant tax costs on a general investment account portfolio, then £3 per month to put your account in a tax free wrapper will be money well spent.

Trading 212

What is Trading 212?

Trading 212 is another stock trading platform which lets you trade for free. That is, up to a point! Trading 212, much like Freetrade, will let you trade in stocks without the need to pay any commission on top. That alone should be pretty appealing.

What’s most appealing about Trading 212, however, is likely to be the number of stocks and assets you can actually trade on the platform. For an app and site which allows you to trade in stocks without any extra fees or costs, 1,800 different stocks should be plenty for you to play with.

Is Trading 212 Really Free?

Trading 212 is, for all intents and purposes, free. It’s free to deposit, and there are no commission costs expected of you along the way, either.

Various reviewers and experts online seem to be at odds on what you can and can’t pay into the platform. Straight from the horse’s mouth, you can pay in from a minimum of £1, or EUR or USD equivalent. This applies to the basic ‘Invest’ platform. The deposits for CFD accounts start at £10, while you’ll need to put at least £1 into ISAs here – and that’s in GBP only.

There are no withdrawal fees to expect here, either. Therefore, you’re likely wondering what the catch is!

Is Trading 212 Good for Beginners?

In some ways, Trading 212 is a good starting point for investors. It’s easy enough to sign up with online and paying in with a debit card only takes a few minutes. However, unlike Freetrade, its massive array of assets and its three distinct platforms could help to make things a bit confusing for absolute beginners.

The Trading 212 apps are presentable enough, and probably won’t put too many newbies off. However, be sure to take your time. Some will claim that the data available on Trading 212 outpaces that which you get through Freetrade. However, the ‘news’ and ‘analysis’ sections on the apps are actually pretty lacking. Even newbies are likely to be clamouring for a bit more in the way of insight.

How Does Trading 212 Make Money?

Trading 212 makes money through spreads on their assets, which are of little consequence to everyday traders and investors. However, what’s refreshing about Trading 212 is the fact that they are so transparent about what you’ll have to pay. It’s all there in black and white on the main site. There are zero commission fees on any trades and zero FX fees.

Now that we’ve looked at Freetrade vs Trading 212 in a little detail, let’s consider the pros and cons of each service.

Freetrade vs Trading 212: Pros and Cons

Freetrade

• Freetrade is, for the most part, absolutely free. Therefore, you can start depositing and trading from at least £2.
• However, you will expect to pay an FX fee of 0.45% on anything you trade in outside the UK.
• The app itself is really easy to get into and use. Therefore, it is likely to appeal to people who are new to investing and trading.
• Other platforms offer better data and analysis.
• Freetrade offers a nice stocks and shares ISA option, which is likely to be worthwhile if you know what you’re doing, and t makes sense to pay £3 per month.

Trading 212

• Trading 212 offers a little more in the way of functionality over Freetrade, as well as a larger set of assets, on the whole.
• Trading 212, however, at least in its app interface, is also rather lax in terms of the data that it offers users.
• Trading 212 is very flexible and is also really easy to set up and get started with.
• Trading 212 is, in the long run, going to appeal to more experienced traders. It’s a little more complex to digest and offers a larger stock selection
• With Trading 212 you also have the additional option of CFD and Crypto trading.

Freetrade vs Trading 212: Verdict

In the battle between Trading 212 vs Freetrade, who wins out? Of the cheapest way to buy stocks online both apps are very good starting points. Paying fees to a more traditional investment platform might be worth it for the data you get and the support you receive if that’s something that’s of particular importance to you. However, for commission free stock trading that offers simplicity and low cost you wont go far wrong with Freetrade or Trading 212.

Last update on 2020-10-21 / Affiliate links / Images from Amazon Product Advertising API