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

Stock trading is getting easier and easier thanks to online services 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 huge with the likes of apps such as Robinhood. In the UK, meanwhile, we’ve seen a similar boom. Stock trading apps such as Stake, eToro, Revolut, and of course Freetrade and Trading 212 will all let you build and trade with fee free stock portfolios. But how does it all work, and what is the best trading app without fees?

In this matchup, I’m going to take a look at Trading 212 vs Freetrade. I’ll take a look at 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.

Freetrade vs Trading 212

Summary

• Both Freetrade and Trading 212 allow you to start trading in stock for free, without commission.
• Trading 212 offers more platforms and more assets. 
• Trading 212 tends to make money through spreads, while Freetrade will charge you for speedy withdrawals, as well as a small FX fee on top of any international trades you get into.
• Both apps are very easy to set up and get into.
• Freetrade is ideal for beginners, whereas Trading 212 is a little more advanced.

What is Commission Free Investing?

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

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 fee free investment systems will ask you to pay subscription fees. Therefore, you’re going to need to weigh up the costs and the benefits. If you want to trade for free, you’re still probably going to need to offer up a subscription rate!

What Are the Best Fee Free Trading Apps?

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 investments 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 for smartphones right now. Therefore, before you start playing around with fee free trading apps, make sure you take a look at my findings with these two behemoths of the market.

Freetrade

What is Freetrade?

Freetrade is a free app – 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 £0 – 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 £1. 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% fee that applies here. Some might think this goes against the idea of a ‘freetrade’ app, but ultimately, it’s free up to a point. The app needs to make money somehow. I’m coming to that side of things shortly.

Is Freetrade Good for Beginners?

The Freetrade app should be a great asset for starter investors. All you need to do is supply ID information, such as your address, your NI number and your passport, and you can then fund your account and portfolio.

From there, it’s pretty fast and breezy. You simply cycle through available UK stocks and US stocks, select how much you want to buy, and – well – you buy it. However, some users and experts are concerned that the analytics and charts you actually get from Freetrade aren’t that helpful.

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. 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 play ball with the bigger apps.

How Does Freetrade Make Money?

Freetrade makes money, simply, by charging for premium perks. One of the most interesting sides to Freetrade is its stocks and shares ISA option, which might give you a little more to play for if your stock options are otherwise falling flat. However, for the privilege of using this side of the service, you’ll need to stump up a princely £3 per month. That’s probably not going to break the bank for most investors.

Then again, be aware that if you want to take your money away quickly, you’re going to need to pay a fee. Bank transfers can take a little time to process, but if you want your money back the same day you request it, you’re going to need to pay a levy of £5. Again, depending on how much you have available, and why you need it immediately, this might not be too much to pay.

Again, Freetrade also makes money through fees on international stocks, at an FX rate of 0.45%. There are worse binds out there, believe me.

Trading 212

What is Trading 212?

Trading 212 is another app 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 assets 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.

However, the platform does deal in inactivity fees, which means that if you leave your account for more than 180 days, or six months at a time, you might incur some charges. The best thing you can do regarding fees and Trading 212 is to look carefully at their trading terms. Everything is very easy to spot and to work out. It’s a shame that there is misinformation out there regarding Trading 212 and the way it handles charges.

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: Pros and Cons

• Freetrade is, for the most part, absolutely free. Therefore, you can start depositing and trading from at least £1.
• However, you will expect to pay an FX percentage 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 may not know how to get their heads around basic investing and trading.
• While you can trade for free through Freetrade, it may not be the best at delivering the stats and reports you’re looking for.
• Freetrade offers a nice stocks and shares ISA option, which is only really going to be worthwhile if you know what you’re doing, and if you’re willing to pay £3 per month for the privilege.

Trading 212: Pros and Cons

• Trading 212 offers a little more in the way of functionality over Freetrade, as well as what appears to be 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. It’s nice to see pretty charts and some summaries. However, without much in the way of genuine statistics, you’re having to guess a fair amount.
• Trading 212 is very flexible and is also really easy to set up and start with. There are a few specialist platforms on board, all of which have their positives.
• Trading 212 is, in the long run, going to appeal to more experienced traders. It’s a little more complex to digest.

Freetrade vs Trading 212: Conclusion

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. Other than that, paying a subscription 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. But for simplicity and low cost you wont go far wrong with Freetrade or Trading 212.

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