Sterling Savvy

>

How to Buy Microsoft Shares UK for Beginners

Tobi Opeyemi Amure
Reviewed by:
How to Buy Microsoft Shares UK for Beginners

In a nutshell, to buy Microsoft shares in the UK, choose a brokerage that offers access to US stocks, like eToro or Plus500. Open and fund your trading account, ensuring you complete a W-8BEN form to comply with US tax regulations. Then, search for Microsoft’s stock ticker ‘MSFT’, decide on the number of shares or the amount you want to invest in, and execute the buy order.

In this detailed guide on how to buy Microsoft Shares in the UK, I’ve carefully selected the key steps to help you navigate the world of tech investments in the UK market.

From choosing the right brokerage to finalising your investment, this article is tailored to provide you with clarity and confidence in your investment journey.

This article was reviewed by Tobi Opeyemi Amure, a trading expert and writer at InvestopediaInvesting.com, and Trading.biz.

Quick Steps to Buy Microsoft Shares Online

  1. Select a trading platform: For beginners, it’s important to select a user-friendly trading platform, that offers educational resources, and provides robust customer support to meet your investment needs.
  2. Account registration: Sign up by filling in your personal details to create your trading account.
  3. Set up payment method: Fund your account using options like a bank transfer, debit card, or credit card.
  4. Find Microsoft stock: On the platform, look up Microsoft using the stock code: MSFT.
  5. Research shares: Utilise the platform’s resources to access up-to-date information on Microsoft shares.
  6. Initiate share purchase: Decide on the number of shares you want and execute a market order or a limit order. The process is straightforward and user-friendly.

Best Place to Buy Microsoft Shares UK

In 2023, around 2 in 5 Brits (42%) invest and trade, up from 36% in 20211.

Choosing the best trading platform for investing in Microsoft shares is crucial for newcomers in the market.

Having worked in the retail investment sector in London over the last four years, I had the opportunity to experience the rise first-hand.

Additionally, in my role working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”, I was able to work with and test some of the biggest UK stock brokers in the market.

Using my experience in this field, I’ve picked two of the best places to buy Microsoft shares in the UK.

Factors such as fees, commissions, usability, trading platforms available, research tools, educational materials, and additional features were considered.

Both of the platforms I’ve reviewed below are regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA) or similar.

1. eToro – Overall best place to buy Microsoft stock UK

eToro – Overall best place to buy Microsoft stock UK

eToro stands out as an excellent choice for UK investors looking to buy Microsoft shares, thanks to its user-friendly interface, commission-free trading, and a wide range of investment options.

As a multi-asset platform, it not only facilitates investing in stocks like Microsoft but also offers cryptoassets, CFDs, and more, catering to both beginners and experienced traders.

One of eToro’s notable features is its commitment to low-cost trading. It allows the purchase of shares, including US-listed giants like Microsoft, without any commission fees. This, combined with the option for fractional share ownership starting from just $10 per trade, makes it accessible for investors with varying budgets.

The platform’s security and reliability are underscored by robust regulation, including authorisation by the FCA and coverage under the FSCS, ensuring a safe investment environment. eToro also supports convenient funding methods, including debit cards and UK bank transfers, with a minimal deposit requirement.

Another key advantage is eToro’s social trading capability. The platform allows users to copy the trades of successful investors, offering a unique learning experience for beginners. Additionally, the eToro Money app further enhances the user experience by facilitating easy currency conversion, reducing foreign exchange costs for UK customers trading in USD.

Overall, eToro’s combination of a user-friendly interface, low-cost trading, diverse investment options, and innovative social trading features makes it an attractive platform for UK investors interested in buying Microsoft shares. However, investors should also be mindful of potential currency conversion fees and other associated charges.

Read my complete eToro review.

Zero commission means that no broker fee will be charged when opening or closing the position and does not apply to short or leveraged positions. Other fees apply including FX fees on non-USD deposits and withdrawals. Your capital is at risk. For more information, click here.

2. Plus500 – Good for trading Microsoft CFDs

Plus500 – Good for trading Microsoft CFDs

Plus500 emerges as a leading choice for UK traders looking to engage in CFD trading, especially for Microsoft stock. It’s a CFD broker known for its intuitive native app available on both iOS and Android, making it accessible for traders on the go.

Regulated by the FCA and covered by the FSCS, Plus500 provides a secure and reliable trading environment.

The platform offers commission-free trading on a vast array of stocks, including major markets in the USA, UK, and globally, making it ideal for trading Microsoft CFDs. Plus500’s leverage options, up to 1:5, allow traders to maximise their trading potential, though it’s important to be mindful of the increased risks associated with leverage.

One of Plus500’s unique features is its analytical tool, ‘Insights’, which offers an in-depth analysis of market trends and trader sentiments. This tool can be particularly valuable in understanding market movements and making informed trading decisions.

Additionally, the platform offers a range of advanced trading tools, including predefined stops and limits to help manage risks effectively.

Plus500 supports a broad selection of over 2,000 CFDs, catering to diverse trading preferences. This includes not only stocks but also commodities, ETFs, indices, and options. The platform’s proprietary trading system is tailored for active traders who seek competitive pricing and robust customer support.

However, traders should note the absence of the MetaTrader platform and the minimal educational resources provided. Plus500 also charges an inactivity fee if the account remains dormant for a certain period.

In summary, Plus500 stands out for its extensive range of CFD options, advanced trading tools, and a secure trading environment, making it an excellent choice for UK traders interested in trading Microsoft stock CFDs.

As with all trading platforms, understanding the associated risks and fees is crucial before engaging in CFD trading.

Read my Plus500 review.

How to Buy Microsoft Shares in the UK – Step-by-Step Guide

Here’s a simple step-by-step guide to help you invest in Microsoft shares.

1. Select a broker

Start by choosing a broker that suits your needs, such as eToro, Plus500, or IG. Consider factors like fees, ease of use, and customer support. Ensure the broker offers access to US stocks, including Microsoft (MSFT).

2. Create your account

Set up your brokerage account online. Provide necessary personal details like your name, address, and National Insurance number for identity verification. This process is typically straightforward and can be completed via the broker’s website or app.

3. Fund your account

Deposit funds into your brokerage account. This can usually be done through a bank transfer or by using a debit or credit card. The amount will depend on your investment plans and the broker’s minimum deposit requirements.

4. Complete a W-8BEN form

As a UK investor buying US stocks, fill out the W-8BEN form. This form reduces the withholding tax on US-sourced income, such as dividends from Microsoft shares.

5. Choose a tax wrapper

Consider using a tax-efficient wrapper like an ISA or SIPP for your investment, depending on your goals and financial situation. These can offer tax savings and potentially enhance your investment returns.

6. Research Microsoft shares

Before purchasing, research Microsoft thoroughly. Look at its market capitalisation, earnings reports, liquidity, and recent company performance. Understanding Microsoft’s position in the market and its competition is crucial.

7. Buy the shares

Purchase Microsoft shares using your broker’s platform. Search for Microsoft’s ticker symbol ‘MSFT’, decide on the number of shares or the investment amount, and place your order. You can choose between market orders and limit orders based on your strategy.

8. Monitor your investment

After buying the shares, actively monitor your investment. Stay updated on Microsoft’s performance and market trends. Set up alerts for price changes and be prepared to adjust your investment as needed.

9. Be aware of fees & taxes

Understand the fees charged by your broker, like commission, account maintenance, and FX fees. Also, consider the tax implications, such as Capital Gains Tax, which may apply to your investment in Microsoft shares.

Frequently Asked Questions About Buying Microsoft Shares in the UK

Here are some answers to some of the most asked questions regarding purchasing Microsoft stock in the UK.

Can I buy Microsoft shares in the UK?

Yes, you can buy Microsoft shares in the UK. To do this, choose a brokerage that offers access to US stocks and open a trading account. Ensure you complete a W-8BEN form, necessary for UK residents investing in US stocks. After setting up your account and deciding your investment amount, you can proceed to buy Microsoft shares through the chosen platform.

Should UK investors buy shares in Microsoft?

UK investors contemplating the purchase of Microsoft shares should consider several aspects.

First, Microsoft’s strong market position and diversified portfolio in software, cloud computing, and hardware make it a potentially stable and profitable investment. The company’s history of innovation and growth in various technology sectors indicates potential for future appreciation.

However, like any investment, buying Microsoft shares involves risks. These include market volatility, which can affect stock prices, and the impact of global economic conditions on the tech industry. Investors should also consider currency exchange risks, as investing in a US-based company involves dealing with fluctuations between the GBP and USD.

Before investing, UK investors need to align their investment in Microsoft with their financial goals and risk tolerance. Assessing personal investment strategies and staying informed about the company’s performance and market trends are key steps in this process.

Is it safe to invest in Microsoft?

Investing in Microsoft, like any stock, involves inherent risks and uncertainties. While Microsoft is a well-established company with a strong presence in the technology sector, its stock can be affected by market volatility, technological shifts, and global economic conditions.

Investors should assess their own risk tolerance and investment goals when considering an investment in Microsoft. It’s advisable to conduct thorough research and possibly consult a financial advisor to understand the potential risks and rewards associated with investing in Microsoft.

How to sell Microsoft shares?

  1. Log in to your brokerage account where you hold Microsoft shares.
  2. Navigate to the trading section and search for Microsoft’s stock ticker, ‘MSFT’.
  3. Enter the number of shares you wish to sell and choose the type of sell order (e.g., market, limit).
  4. Review and confirm the transaction details.
  5. Execute the sale order and monitor the execution status.

Why invest in Microsoft?

Investing in Microsoft can be appealing due to its solid reputation as a leader in the technology sector.

The company’s strong foothold in software development, cloud services, and a range of consumer electronics positions it as a diversified and stable investment option.

Microsoft’s ongoing innovation and expansion into emerging tech markets, such as artificial intelligence and cloud computing, signal potential for future growth.

Financially, Microsoft has consistently shown robust revenue and profit margins. Its financial stability is a critical factor for investors seeking a reliable investment in the tech industry. Additionally, Microsoft’s regular dividend payments add to its attractiveness for those seeking income alongside capital growth.

However, it’s important to be aware that investing in any stock, including Microsoft, carries risk. The company’s stock price can be influenced by broader market trends, shifts in technology, and global economic changes.

What to consider before investing in Microsoft shares?

Before investing in Microsoft shares, several important factors should be considered.

Understanding Microsoft’s Business Model is crucial; the company has a diverse portfolio in software, cloud computing, and hardware, which impacts its market stability and growth potential.

Investors should review Microsoft’s Financial Performance, including revenue growth, profit margins, and market share, to gauge its financial health and investment viability.

Market Volatility is another key consideration. Like all stocks, Microsoft’s share price is subject to fluctuations influenced by market trends, economic conditions, and company-specific news.

Aligning this with your Risk Tolerance is essential; investors should evaluate how comfortable they are with the potential ups and downs of the stock market.

Currency Exchange Rates also play a role, especially for UK investors. Since Microsoft is a US-based company, fluctuations between the GBP and USD can affect investment returns. Understanding these currency risks is important for international investments.

Lastly, investors should consider their Long-Term Investment Goals. Microsoft may be suitable for those seeking long-term growth and stability in the tech sector, but aligning investment with personal financial goals is crucial.

How to buy Microsoft shares UK for beginners?

  1. Choose a Broker: Select a UK-based broker that offers US stock trading, including Microsoft shares.
  2. Create an Account: Sign up for an account with the broker, providing necessary personal details.
  3. Verify Identity: Complete the identity verification process as required by the broker.
  4. Deposit Funds: Transfer money into your brokerage account, often possible via bank transfer or debit card.
  5. Complete W-8BEN Form: Fill out this form to declare non-US residency for tax purposes.
  6. Research Microsoft: Understand Microsoft’s business model, financials, and recent stock performance.
  7. Decide Investment Amount: Determine how much you want to invest based on your budget and risk tolerance.
  8. Place Order: Search for Microsoft’s ticker symbol ‘MSFT’ and place a buy order for the desired number of shares.
  9. Review and Confirm: Double-check the order details and confirm the purchase.
  10. Monitor Your Investment: Regularly track the performance of your Microsoft shares and stay informed about market changes.

What are the risks of investing in Microsoft shares?

Investing in Microsoft shares involves certain risks that need to be considered. Market Volatility is a primary risk, as Microsoft’s stock price can fluctuate due to broader market trends, technological changes, and economic conditions. These fluctuations can impact the value of the investment, particularly in the short term.

Competition in the Tech Industry is another risk factor. Microsoft operates in a highly competitive market with constant technological advancements. Changes in market dynamics or innovations by competitors can affect Microsoft’s business performance and stock value.

Regulatory Challenges also present a risk. As a global tech company, Microsoft faces various regulatory environments that can impact its operations and financial results. Legal and regulatory changes, particularly in key markets, can influence the company’s profitability and growth prospects.

Finally, Currency Risk is relevant for UK investors. Since Microsoft is a US-based company, fluctuations in the exchange rate between the US dollar and the British pound can affect the investment’s return in GBP terms.

Is it worth buying one share of Microsoft?

Deciding whether to buy a single share of Microsoft depends on several factors.

The cost of one Microsoft share might be substantial for some investors, but the option of fractional shares offered by many brokerages allows for smaller investments in part of a share. This can make investing in Microsoft more accessible, especially for those with limited capital.

For investors looking to diversify their portfolio or start small, buying one or a fractional share of Microsoft can be a viable option. It enables participation in the potential growth of a leading tech company without a significant initial investment.

However, it’s important to consider any transaction fees that might be proportionally higher when investing small amounts. Such fees can impact the overall return, especially when dealing with a single or fractional share.

What’s the best time to invest in Microsoft stock?

Identifying the best time to invest in Microsoft stock requires considering several key factors. Market Timing is crucial, and investing when the stock is undervalued or during market dips can be advantageous.

However, accurately predicting the perfect timing is challenging, and a long-term investment perspective is often more beneficial.

Keeping an eye on Microsoft’s Financial Reports and industry developments is essential. Quarterly earnings, product announcements, and sector-specific news can significantly impact the stock’s value. These events can provide insights into potential investment opportunities.

Understanding Broader Market Trends is also vital. Global economic conditions, shifts in the technology sector, and investor sentiment can influence Microsoft’s stock performance. Aligning these trends with your investment goals and risk tolerance is important for making informed decisions.

What’s the minimum required investment for Microsoft?

The minimum investment required to buy Microsoft shares primarily depends on the stock’s current market price and the policies of your chosen brokerage.

While the price of a single Microsoft share might be high, the availability of fractional shares at many brokerages allows for investment in a portion of a share. This means you can invest in Microsoft with a significantly smaller amount of capital, sometimes just a few dollars or pounds, depending on the broker’s minimum transaction limit.

It’s also important to consider any additional fees or charges that your brokerage might impose. These can include transaction fees, account maintenance fees, or currency conversion fees, especially when dealing with US stocks from the UK. These fees can impact the overall cost of your investment, particularly when dealing with smaller amounts.

Final Thoughts

Purchasing Microsoft shares in the UK can be a straightforward and rewarding process for investors.

By choosing the right brokerage, understanding the steps involved, and considering factors like fractional shares and associated fees, you can smoothly navigate the path to owning a stake in one of the world’s leading tech companies.

Whether you are a seasoned investor or new to the stock market, this guide aims to provide you with the essential knowledge and confidence to invest in Microsoft shares, making informed decisions that align with your financial goals in the UK market.

FAQs

Does Microsoft pay dividends?

Yes, Microsoft pays dividends to its shareholders. The company has a history of regularly paying quarterly dividends, and the amount is subject to change based on the company’s financial performance and decisions by its board of directors. Investors often consider these dividend payments as a steady income stream from their investment in Microsoft.

What’s the cheapest way to buy Microsoft stock?

The cheapest way to buy Microsoft stock is through online brokerages that offer commission-free trading. Platforms like eToro are a popular choice, as they allow investors to purchase Microsoft shares without incurring commission fees. Additionally, eToro supports fractional share investing, enabling you to buy a portion of a Microsoft share, which is ideal for those with limited funds. However, it’s important to be aware of other potential fees, such as currency conversion fees, especially for UK investors trading in US stocks.

You may also like:

Sources:

  1. https://www.finder.com/uk/investment-statistics ↩︎

Will Fenton is the founder of Sterling Savvy. He is a personal finance expert and writes about trading, investing, budgeting, and other financial topics.

Along with his education in Economics & Finance, he has experience working in the financial services industry in London working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”.

View Profile

Advertiser Disclosure

We may receive compensation from our partners for placement of their products or services, which helps to maintain our site. We may also receive compensation if you click on certain links posted on our site. While compensation arrangements may affect the order, position or placement of product information, it doesn’t influence our assessment of those products.