Trading the stock markets is an age-old way to invest cash and, as technology continues to filter through to the finance sector, competition between share-dealing companies is hotting up.
When starting a portfolio, finding a share-dealing platform offering low fees is imperative – if you’re not careful, high dealing costs can take a large chunk of your returns. Many newer firms are offering more and more competitive rates in order to beat out the more traditional dealers; here are a few to take advantage of…
Netherlands-based Degiro is one of the leaders in low-cost dealing, knocking pounds off the dealing costs of mainstream dealers. They claim to offer fees that are on average 84 percent lower than competitors, charging a flat fee of £1.75 per trade for UK-listed shares, plus 0.004 percent of each trade’s value. This would mean that a £1,000 trade costs just £1.79, while a £10,000 deal would be £2.15.
For US-listed shares Degiro have lowered their costs further, charging just $0.50 plus $0.004 per share. Most UK brokers would charge upwards of £40-50 for this same trade.
In comparison, better-known online share platform IG charge rather more. For between 0 and 9 trades the charge is £8 per trade, and for 10 and above it’s £5. However, if you prefer to trade over the phone the price skyrockets to a £40 minimum charge regardless of how many shares you are trading.
Robo-adviser Nutmeg is one of the new kids on the block, hoping to use technology to revolutionise the tired and traditional trading industry. They pride themselves on customers being able to get a ‘low-cost, intelligent portfolio’, with no hidden exit fees or trading commissions.
Instead, Nutmeg charge an annual management fee of 0.75 percent. If you choose to expand your portfolio to over £100,000, the fees fall further on a sliding scale to a minimum of 0.25 percent. The fees are charged monthly and on an ISA or a standard account money can be withdrawn at any time.
For those who know what they’re doing, XO’s execution-only platform offers some competitive prices. XO charge no management fees, inactivity fees or account opening fees – simply a one-off cost of £5.95 per trade, no matter the size.
Hargreaves Lansdown, one of the most established share dealing platforms, offer varying rates dependent on how frequently you trade. Between 0-9 trades per month the cost is £11.95, between 10-19 it’s £8.95 and for 20 or more trades per month, the cost is £5.95.