Freetrade is a share trading app that, you guessed it, lets you trade for free.
But in a world where there’s no such thing as a free lunch, this video will take a closer
look at the app and its features to see what the catch is and whether we at Finder think
it’s worth it.
The app and features
There are five keys things you need to know about Freetrade:
1.
With the app you can buy and sell UK and US shares as well as exchange-traded funds.
2.
You can start trading with as little as £2 in your account.
3.
During stock market hours, all orders are instant.
Outside of stock market hours, orders will be executed at 10am the following day for
UK stock and 3pm the following day for US stock, with no commission fee.
4.
And finally, when you refer a friend, Freetrade will give you a free share.
Freetrade’s free general investment account is its most basic account option.
As well as no monthly fee, it also comes with free instant orders and no inactivity fee,
so you won’t be charged if you don’t use your account for a period of time.
With Freetrade you can also get access to a stocks and shares ISA, a self invested personal
pension (SIPP) and extra features plus interest on your cash with Freetrade’s paid-for Plus
account.
Overall, Freetrade’s app is well-designed, easy to set-up and use.
And you can toggle through your account features along the bottom navigation bar.
The first tab is your portfolio where you can also top up and add funds to your account.
Investing insights and breakdowns will appear in the insights tabs once you’ve made your
first trade to help you to make super-informed investment decisions.
Discover is where you’ll find all the potential stocks and shares you can invest in via the
app.
Find your desired stocks using the search bar at the top or scroll down to search by
category, sector or popular stocks and funds.
Click on the activity tab to find all your account top ups, trades and pending orders.
What’s the catch?
The main catch is the limited features that come with Freetrade’s free general investment
account.
To upgrade or use any of the app’s additional products like the ISA, SIPP or Plus account,
you will have to pay a monthly fee.
Although these costs are still pretty competitive.
Freetrade has a bit of limited trading universe, so if you were looking to invest in different
funds and shares from markets outside of the UK and US, there might be a better app out
there for you.
And, even though you can only trade on these two markets, you will still pay a fee for
any US trades you make.
Another common criticism is that their investment insights are a bit lacking in information
and data.
But, like many other big digital finance players, Freetrade is constantly working to update
and improve its features.
How does Freetrade make money?
Freetrade makes money from its free general investment account in three ways:
1.
It charges a 0.45% foreign transaction fee for buying shares in other countries - including
the US.
2.
Its stocks and shares ISA has a fee of £3 a month.
3.
You will be charged £5 for same day withdrawals from your account.
Freetrade also has a Plus account which costs £9.99 a month and comes with lots of extra
features.
And another premium account, Freetrade Alpha, is set to launch soon.
Our verdict
Unsurprisingly, Freetrade’s ‘free-ness’ is what we love the most about this app.
Opening the account takes like two minutes and then you’re ready to go.
And the app itself is slick and easy to navigate.
Downsides include the limited trading options and relatively shallow investment insights.
Overall, Freetrade is a great option for beginners who are not looking to invest large sums of
money at this stage.
What next?
It’s important to remember that no investment comes without risk, so make sure you do your
research and compare all your options before parting with any cash.
For our full Freetrade review and to learn more about share trading apps, visit finder.com
- links are in the description below.
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