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Freetrade vs Trading 212
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Freetrade vs Trading 212

There are a dizzying amount of choices when it comes to investing, from stocks and bonds to real estate and cryptocurrency. How do you decide which platform is right for you? To assist in making your decision, we will compare two of the most popular investment platforms: Freetrade vs Trading 212.

More and more people are starting to make investments on their own

By 2022, 56 percent of US adults and over 20% of most EU households have, or were, invested in the stock market. Investing is no passing trend but a fundamental piece of the dream; the idea of buying low and selling high is an alluring one, and more people than ever before are turning to the stock market to achieve their financial goals.

About Freetrade

With over 1 million active users, Freetrade is an investment platform with a clear mission: to make investing affordable and accessible. This is advantageous for both novice and experienced investors, as it allows you to invest in a variety of assets (including stocks, ETFs, and cryptocurrencies) without paying any commission fees.

The company was founded in 2015 by CEO Adam Dodds and co-founders Jamie Aston and David Siegel. Dodds saw a need in the UK for an investment platform that paid less attention to commissions and more to giving customers a fair deal.

A few distinguishing traits of Freetrade to note:

  • Freetrade has its own house-built brokerage system called Invest By Freetrade. This cuts costs on the customer side and allows for a more streamlined, user-friendly experience.
  • Freetrade was the first investment platform to be awarded an Innovative Finance ISA (IFISA) license by the UK government. This means that you can use your Freetrade account to invest in peer-to-peer (P2P) lending and earn tax-free returns.
  • The company has one simple pricing page for better transparency and predictability.

Freetrade is becoming increasingly available; the company recently announced opening access to Australia, with more to follow.

About Trading 212

Similar to Freetrade, Trading 212 has over 1 million clients. The fintech company has also earned an almost-perfect rating on Trustpilot and has processed billions of dollars in client assets. Trading 212 was the first in the industry to go commission-free in Europe and the UK; they were instrumental in making investment accessible to all.

The free Trading 212 app is undoubtedly one of its biggest draws; it allows you to trade stocks, Forex, ETFs, and crypto on the go. More than 14 million people have downloaded the app to date, and it has reached top charts for trading apps multiple times.

Additionally, Trading 212 has the following to offer:

  • The platform has an active community forum, along with helpful video guides to break down knowledge barriers.
  • It offers a wider range of services than most other investment platforms, such as CFDs and futures.
  • There is a one-dollar minimum fee on most transactions, making it accessible to all.

Freetrade vs Trading 212: Fees

When it comes to investing, you don't want to lose a significant chunk of your investment to fees. Unfortunately, however, many investment platforms charge high fees. This can make it difficult to make a profit on your investments, especially if the market is not performing well.

Freetrade and Trading 212 have worked hard to change this narrative. Both platforms offer commission-free trading, meaning you don't have to pay a fee for each trade you make. This can save you a lot of money in the long run, and it means you can keep more of your profits.

However, there are some differences between Freetrade and Trading 212 when it comes to fees. Let's take a look at a more detailed breakdown of the fees charged by these platforms.

Freetrade Fees

  • Trades: Free
  • Account fee: None
  • Fractional shares: Yes
  • FX rate: Spot rate + 0.45%

This FX rate is much lower than other platforms; for instance, Hargreaves Lansdown charges a rate of spot + 1%. This can be a major advantage for Freetrade users, as it can save them a lot of money on foreign exchange transactions.

Note that Freetrade offers ISAs (Individual Savings Account), and these cost £3 per month. SIPPs (Self-Invested Personal Pension) cost £9.99. Both accounts are still subject to the same low rate of spot rate + 0.45%. 

Trading 212 Fees

  • Trades: Free
  • Account fee: None
  • Minimum investment: £1 (or £10 for CFDs)
  • ISA charge: None
  • 0.15% fee for trades in other currencies

In terms of fees, Trading 212 is somewhat cheaper than Freetrade. Trading 212 does not charge an account fee, and there is no minimum investment requirement. However, Freetrade provides an attractive monthly membership which we'll mention later on.

Freetrade vs Trading 212: What Can You Trade?

When it comes to differentiating between these two platforms, the variety of services and products provided is perhaps what sets them apart from most. 

Beginning with Freetrade: this platform certainly covers all bases in terms of tax wrapping and account types, providing both a SIPP and an ISA. It also stands out as an excellent platform for beginners, offering the major investments of shares, EFTs, and trusts. 

For more experienced investors, however, Trading 212 comes out on top with a wider range of investment options, including CFDs. While these are quite volatile and pose a significant risk, they can be a lucrative investment if traded correctly. Trading 212 also offers crypto and gold, setting it apart from the competition.

Security

Investing is all about handling your valuable assets – and as such, you want to choose a platform with your security high on its list of priorities. 

Freetrade and Trading 212 are both fully regulated by the FCA and hold a full banking license. Your money is always safe and secure when trading through either platform.

Both platforms also segregate client funds, meaning that under no circumstances can they be used to cover the companies' own costs. Customers are doubly covered by the platforms' memberships with Financial Services Compensation Scheme (FSCS).

The two platforms are almost identical in the security department – however, Freetrade does have an additional measure in place. In order to prevent creditors from using customer funds to repay company debts in the event of a collapse, Freetrade holds back a percentage of customer funds in nominee accounts or at approved third-party custodians.

Ease of Use

Trading platforms have a history of being clunky, glitchy, and confusing to use. This is not the case with either Freetrade or Trading 212.

Both platforms are incredibly easy to navigate, with user-friendly interfaces that make trading a breeze. There are no hidden fees or catches, and both platforms offer helpful guides and support if you ever get stuck.

Where the two platforms differ is in their platform offerings. Both have iOS and Android apps, but Trading 212 has a web platform while Freetrade does not. Trading 212 is also known for its award-winning app with over 14 million downloads – so it is perhaps more trustworthy when it comes to app security.

Other Features

While the two platforms are similar in most aspects covered thus far, there are a few key differences that may make one more appealing to you than the other. Let's run through some additional features to make a note of in your comparison.

Freetrade Plus

One of Freetrade's most popular features is its subscription, Freetrade Plus. Members can pay £9.99 per month and receive the following benefits: 

  • 3% interest on cash up to £4000.
  • Free ISA account, which is usually £3 per month.
  • Access to a bigger stock universe, as well as curated collections.

There is also the Freetrade Hub, which gives investors all the latest news and resources in one place.

Trading 212 AutoInvest

One of Trading 212's best and most innovative features is the Pie System. The company identified a common issue for traders – that it's hard to diversify your portfolio without manually investing in a large number of stocks, and it can be even harder to keep track of them all.

The Pie System solves this problem by automatically investing in a selection of stocks for you based on your desired amounts and frequency. This way, you can have a well-diversified portfolio without having to do all the hard work yourself.

AutoInvest essentially works like automated bank payments – you set the parameters, and the system will take care of the rest. This is a great feature for busy investors who want to make sure their money is always working hard for them. The handy pie chart interface makes it easy to see how your investments are performing at a glance.

Freetrade vs Trading 212: In Summary

So, which platform should you choose? It depends on what's important to you. New traders will love Freetrade for its straightforward pricing, accessibility, and all-in-one monthly membership option. Experienced traders, however, may prefer to use Trading 212 for its wider range of investment options and innovative features.

These are perhaps two of the closest runners in the race, which means that you are bound to be happy with whichever platform you choose. 

Moreover, both are undoubtedly more affordable than other platforms out there, and it's rare to come across commission-free trading – so whichever platform you decide on, you can be sure that you're getting great value for your money.

Still, if you are struggling to make a decision, our comparison tool can confidently recommend the best investment platform for your needs.

Nick Saraev

Nick Saraev

A programmer by trade, Nick is a freelance writer and entrepreneur with a penchant for helping people achieve their business goals. He's been featured on Popular Mechanics & Apple News, and has founded several successful companies in e-commerce, marketing, and artificial intelligence. When he's not working on his latest project, you can find him hiking or painting.
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