eToro vs Freetrade: Fees, Platforms and Offerings Compared

About eToro

eToro has been around since 2007, but its original focus was on forex trading. However, since its inception, eToro has continued to expand its product line, evolving into a global service, particularly with the launch of OpenBook in 2010. This is a social trading platform that enables users to follow and learn from more experienced traders. 

Today, eToro facilitates trading in stocks, options, ETFs (Exchange Traded Funds), and crypto with automated portfolios and cash management features. This can be done either on a desktop computer or through the eToro trading app. The platform has approximately 20 million users in over 140 countries across the globe, making it one of the biggest trading platforms in the world.

eToro USA LLC does not offer CFDs, only real Crypto assets available.

Recently, eToro also opened its own wallet service called eToro Wallet, which can be accessed through its exclusive mobile app.

About Freetrade

Freetrade has less history compared to eToro since it only began operating in 2018.  It is a UK-based fintech that was established with the aim of making trading affordable and accessible. Users can access a variety of commission-free stocks and ETF trading.

The main selling point of Freetrade is that users can buy and trade with zero commission using their smartphones. As a mobile trading platform, Freetrade is user-friendly and well-designed, making it an excellent choice for newbie investors. 

eToro vs Freetrade: Services

Both eToro and Freetrade offer commission-free trading of stocks and ETFs. eToro also offers access to CFD trading and cryptocurrency trading, as well as other financial assets. Remember that leveraged CFD trading is highly risky, and you may lose your money.

Freetrade vs eToro: Fees

One of the most confusing aspects of trading for newbies is the platform fee structure, but both eToro and Freetrade are very transparent about what costs you can expect. eToro has a list of fees that you’ll incur.

There is no commission when you trade ETFs or stocks, and eToro covers the regulatory transaction fees if and when you sell stocks. However, if you want to buy or sell crypto, there is a 1% fee. This is a flat fee that is technically a bid-ask spread for each trade.

This is a little confusing for those who have traded crypto using other platforms, as you don’t incur a fee each time you buy or sell an asset. Instead, you pay for the entire “round trip” in advance. So, you’ll pay a 1% fee on the purchase and a 1% fee for the eventual sale. 

eToro has several other non-trading fees. There is, however, a foreign exchange fee when you make a deposit in currencies that are not supported by the platform, even if it's just a minimum deposit. There are also a withdrawal fee ($5 per withdrawal) and an inactivity fee ($10 per month). However, it's worth mentioning that other platforms have higher withdrawal fees.

While eToro offers only one general investment account, Freetrade works on a subscription model. There are three plans that you can choose from. The Basic account is free and provides access to commission-free trading on over 1,500 stocks and ETFs U.S fractional shares.

However, if you want access to stocks and shares ISAs and a greater variety of assets, you’ll need to upgrade to the standard plan. This is currently priced at £4.99 per month, but this plan does include automated order types. Standard plan users can also receive 1% interest on uninvested funds held in their accounts with a maximum cap of £2,000.

The top-tier plan is Freetrade Plus. This is essentially a hybrid between a savings account and an investment account. You’ll earn 3% interest on uninvested cash to a maximum deposit amount of £4,000. This plan also includes access to advanced investment tools and an expanded selection of stocks and ETFs, including specially curated collections. As a Plus user, you’ll also have access to priority customer support with an expanded support window. 

eToro vs Freetrade: Platform

The eToro trading platform has been designed to have a streamlined onboarding process. There is a self-guided questionnaire to help to set up your account, so you can get trading quite quickly. 

Once you’re signed up, the user interface is quite intuitive. There is a trading tab to view prices, buy and sell with real-time pricing. You will also find the Popular Investor Program and CopyTrade features easy to find on your home screen. This adds a “social media” feel to the platform as you can watch what more experienced traders are buying and selling.

You’ll also have access to embedded ESG ratings, which score assets according to socially conscious factors. You can filter your search results according to ESG score if you are concerned about creating a socially conscious portfolio. 

You can create custom watchlists, which can be synced between the web and mobile platforms, so you don’t need to be tied to your desk. You can set notification alerts, so you can track your interests on the go. 

Freetrade is a far more basic platform. It is mobile trading only, but the mobile platform is well-designed and available for iOS and Android devices. The platform is remarkably user-friendly, so there is no real learning curve. You should feel familiar with the tools and features in a matter of minutes. 

You can search by asset class or asset name or simply browse by company type, industry, popularity, or country. Unfortunately, there is no fundamental data or trading ideas, so you will be going it alone. 

Additionally, Freetrade does have limited charting tools. There are some feature updates, but there are no major charting or technical tools. 

eToro vs Freetrade: Offerings

eToro has a wide variety of trading offerings, with over 2,075 stocks, 24 cryptocurrencies, options, and 22 ETFs. Besides these, retail investor accounts also get access to several commodities and key Forex pairs (and some exotic currency pairs). Fractional shares are offered above $10. 

Freetrade offers stocks and ETFs, but they are limited to US and UK markets. There are no options or cryptocurrencies. Like eToro, you can access fractional shares, but the selection of available assets does depend on your Freetrade plan. This can vary from 1,500 to 6,000+ depending on whether you opt for the Basic, Standard or Plus plan. 

Freetrade vs eToro: Security

eToro has SIPC (Securities Investor Protection Corporation) coverage. This provides up to $500,000 for equity assets and cash up to a $250k cap in the event that the platform fails. eToro also has two-factor authentication and biometric entry.

There is also an eToro wallet to securely store your cryptocurrencies. However, coin transfers are only available one way. So, you can’t transfer coins back to eToro if you’ve moved them to a third-party wallet. 

As a UK-based platform, Freetrade is covered by the FSCS protection scheme. Like the SIPC coverage, you will be protected against loss of securities and cash should the brokerage fail up to a maximum limit of £85,000. 

Other Features 

It is also worth noting that while Freetrade is rather basic, eToro does offer research, portfolio analysis, news, and educational resources that can help you to build a portfolio that meets your trading goal and improve your trading skills.  

Another eToro feature worth mentioning is social trading. The award-winning eToro Copytrader feature (or copy trading) lets you follow profitable traders on the platform - you just select the eToro clients that you want to follow, and the platform will automatically open and close trades placed by those traders.

eToro vs Freetrade Conclusion: Which is Better

All in all, both Freetrade and eToro are excellent platforms. The winner of this Freetrade vs eToro comparison depends on personal preferences.

Freetrade is beginner-friendly, but it is a rather basic platform that you may quickly outgrow as you develop your trading skills. The eToro platform is far more comprehensive, and you can access the support of the eToro community if you need a little guidance.

While the learning curve is a little steeper than Freetrade, it is considered a better platform overall. Still, eToro offers you access to a demo account to learn how to trade stocks and other asset classes without putting your money at risk. This includes trading CFDs and cryptoasset investing.

eToro offers you access to more stocks, including European stocks from several countries, which can be traded on both the web-based platform and the eToro mobile app. The only downside of Freetrade is that it does not offer CFD and crypto trading.

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