As inflation rises unexpectedly and lower interest rates on savings accounts cannot keep up with rising inflation, investing in stocks or other assets is very crucial.
The first step to start trading or investing in stocks, mutual funds, exchange-traded funds (ETFs) or any other asset is to open an online trading account. So, choosing the right online broker with low fees and commissions is an important decision to make.
Online trading accounts allow investors and traders to invest in financial assets such as stocks, mutual funds, bonds and ETFs and manage their portfolios. These accounts come with various features such as mapping tools, real-time quotes, news feeds, and premium searches. These platforms can be specifically tailored to various markets such as stocks, futures, options, and the currency market.
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Besides the fees and commissions charged by a trading app provider, there are other considerations you should keep in mind before choosing a trading app. Here is how user-friendly the app is, what assets you want to invest in, are you new to investing, trading and administration fees, minimum investment, is the app regulated by the UK’s Financial Conduct Authority (FCA), the ability to use a stock and equity ISA wrapper on the platform, and additional features, benefits and rewards.
Also read: What are the best Cash ISA rates right now?
Now let’s take a look at the top five UK trading apps.
eToro is an easy-to-use trading app for beginners and professional investors. It allows you to buy and sell stocks, ETFs, bonds and currencies without account creation fees, commissions and management fees. However, it charges other fees such as withdrawal and exchange fees. The app contains stocks from some of the largest stock exchanges in the world, including NASDAQ, New York Stock Exchange, London Stock Exchange, and Euronext.
The app allows investors to follow expert traders and copy every trade they make at the push of a button, with no trading limits, great charting tools and a personalized news feed. However, with the eToro trading app, you cannot invest in an ISA. Among the fees, a mandatory withdrawal fee is charged, fees are charged on all leveraged, short or CFD orders. They do not offer biometric identification login.
IG is the largest and most user-friendly trading application with various features and functions and allows investing in stocks, options, contracts for differences (CFDs), ISAs, repos and spread betting . The application allows the management of different assets with seven types of commands. Investors can set up alerts to receive notifications about important news and updates.
For beginners, it offers ready-to-use portfolios, as well as individual stocks for those who want to choose their own investments. Its price per transaction fee in the UK is £8, in the US £10 and 0.1% in the EU (minimum €10). Its UK frequent trading rate is £3, the investment trust fee is £8 and the telephone trading fee is £40.
Read also: Market correction: 5 things to do to protect your investment
- Interactive brokers
Interactive Broker is an international broker that provides direct access to US financial assets at the lowest price. It was initially designed for professional traders, but also made their platform accessible to new investors. The platform is well known for its research, fundamental information, charting options, news, analyst reports, order types and alert option. The platform is secured with two-factor authentication, but it has a complex interface, and it’s not very welcoming to newcomers.
- Hargreaves Lansdown
Hargreaves Lansdown offers an extremely comprehensive selection of investment options and very high quality research alongside an ISA, SIPP and junior accounts. However, it is more expensive than some other providers, especially if you don’t trade often. It offers investment options on 20 international exchanges in stocks, bonds, funds and investment trusts. Its price per transaction fee is £11.95, frequent trading rate is £5.95, annual custody fee is 0.45%, bond fee is £11.95, ETF fees are £11.95, investment trust fees are £11.95 and telephone transaction fees are £20. £50.
Also read: How rising interest rates will affect Britons
- Interactive Investor
Interactive Investor offers nine different accounts, including Repo, ISA and Junior Accounts. It also allows investing in stocks, funds, bonds, ETFs, investment trusts, venture capital trusts (VCTs) and gilts. However, it charges fees and struggles to stay competitive with commissions and fees mostly for fund investors and active stock traders. The platform offers around 3,000 funds, its price per trade is £7.99, with one free trade per month.