Freetrade was established in 2016 and launched its app in 2018, making it a relatively new trading platform.
Users appreciate how the platform operates with no commission fees and offers free shares to new users.
After signing up and testing out the platform for myself, I documented my experience below in this Freetrade review.
This will give you a better sense of what Freetrade has to offer and whether it’s the right trading platform for you.
So, let’s get into it!
Table of Contents
Introduction to Freetrade
Freetrade has amassed over one million users since its launch. It offers a website and an app which I downloaded via the App Store.
I liked how I could start trading with zero commissions for just £1. However, I was only able to trade stocks by using the app. This is a downside to consider if you were hoping to access trading on your desktop.
This makes it an ideal choice for beginner investors who want to learn the ropes before committing more funds.
The company is properly regulated by the FCA (Financial Conduct Authority).
I was also pleased to find that accounts are protected by the FSCS (Financial Services Compensation Scheme). This means that the money in your account (up to a certain amount) is protected if the company goes bust.
What Products Are Available?
Freetrade primarily operates in UK and US markets. This means that users wanting to diversify their portfolios may feel limited when using this platform.
I was disappointed that Freetrade doesn’t offer as many options when it comes to trading in emerging markets, especially those coming out of Europe.
If you’re not so concerned with trading in a range of markets, this won’t be as big of an issue. I liked how there are 1,000 stocks on the New York Stock Exchange and the London Stock Exchange to trade with.
In addition to this, I was able to purchase and sell parts of shares that I couldn’t afford. This enabled me to invest and trade in ways that I otherwise would have been limited to.
There’s a basic orders function that was useful for helping me place trades after the markets were closed.
As I continued using Freetrade, I noticed that more investment trusts were being regularly added. I explored these options and found that it was easy to invest in several assets without spending a lot of money.
You can access the newly added investment trust on the site and the app.
Freetrade App Review
I was glad to discover that Freetrade’s app runs smoothly and is easy to navigate. This meant I could spend more time focusing on trading and less time figuring out how to use the app.
The app is available on both iOS and Android devices. I downloaded the app on iOS and everything worked smoothly. The one significant downside is that you can only trade on the app and not on the desktop version of the site.
How Secure Is Freetrade?
Safety is one of the primary concerns when trading online. Freetrade incorporates biometric authentication and passwords. This provides you with a couple of layers of protection against fraudsters.
When logging into the app via my iPhone, the biometric system required my face ID. This reassured me that no one else besides me could log into my Freetrade account.
I also liked how Freetrade is regulated by the FCA. This gave me peace of mind in knowing that the company is properly regulated and legitimate.
In addition to this, all user funds are kept separately from Freetrade. Therefore, unlike traditional banks, the platform doesn’t use your money to invest.
Freetrade Accounts
Before signing up for a trading platform, you should consider the account options available. Be sure to pick the one that suits your needs best. There are three main accounts to consider when using Freetrade.
Basic
This account is completely free and it’s the one that I started with. This free account is ideal if you’re new to trading or want to test out Freetrade’s platform before paying for the other available accounts.
This account enables you to access the General Investment Account. This is where you can start trading without any commission fees. You also have access to thousands of EFTs and stocks.
Standard
The Standard account costs £5.99 per month. It comes with all of the same features as the Basic account, as well as more access.
The Basic account lets you access around 1,500 stocks. The Standard plan opens you up to more than 6,000 stocks in the US, UK, and EU.
You can also set order types, such as stop losses and limit orders. These are excellent automation features that help you trade at the exact prices you want without always having to do it manually.
Another benefit of the Standard account is the interest rates on funds. You can have up to £2,000 of uninvested money in an account and receive 1% interest.
Plus
Freetrade’s Plus plan costs £11.99 per month. It comes with all the features of the Basic and Standard plan. However, you can earn 3% interest on funds that haven’t yet been invested and that are up to £4,000.
Plus users are given priority when it comes to customer service. This means that they have better and faster access to features such as the available live chat. Users find this handy when they have any issues or queries that they need help with.
Customer service is also available for extended periods exclusively for Plus users. They operate Mon-Fri from 6 AM to 12 AM. This is ideal if you trade by night and need support when it’s late.
There are more EFTs and stocks available to trade with when using the Plus plan. Moreover, a SIPP (Self-Invested Personal Pension) comes with the Plus plan. This is great for helping you invest in your future.
How To Open a Freetrade Account
Opening my Freetrade account was incredibly quick and easy. Here’s a quick rundown of the steps involved to open a Freetrade account to start trading.
- Sign up with an email address, name, and date of birth.
- Keep your national insurance number handy as you’ll need to enter it.
- You’ll also need to enter your nationality and address.
- Freetrade then sends a confirmation link to the email that you signed up with. Click the link and you’ll be able to open an account.
- All that’s left to do then is choose the account that you want to use.
Freetrade’s verification process is fast. I was able to start trading within moments after verifying my identity. I was asked to provide proof of identity which I did in the form of a driving license. However, you can also use a passport.
Freetrade may also ask for proof of address. This can be shown via a bank statement or utility bill.
How Much are the Fees?
Freetrade’s fees are remarkably low. There’s no commission on EFTs, stocks, or shares. So, if you wanted a cost-effective trading platform, Freetrade is worth considering.
I also liked how they don’t charge an inactivity fee. Many online trading platforms charge you a fee if your account is inactive for a certain period. I was also surprised that Freetrade didn’t charge me any fees for withdrawing or depositing funds.
When using the General Investment Account, I wasn’t charged any share dealing account fees.
Customer Support
My experience with Freetrade’s customer support was great. I stuck to using the live chat feature. This enabled me to quickly and easily speak directly with a customer support member.
The response times were fast and once I was connected, the team members were always helpful. I appreciated how the support team was knowledgeable as they were able to answer my questions and help with the more technical issues.
If you wanted to speak to someone directly on the phone, you may be waiting a while longer. You can also expect to wait longer for a response if you email the customer service team.
People who trade at night would benefit from the Plus plan. This grants you access to customer support that operates at extended hours (6 AM to 12 AM from Mon-Fri).
Who Is Freetrade Best For?
Whilst using the platform, I was disappointed that there weren’t many analytical tools. This made it challenging to find metrics to decide which assets to invest in.
Therefore, beginners may struggle to use Freetrade if they don’t have any prior knowledge of trading.
The available analytical tools are basic. This includes graphs that outline the shares history of companies. However, this only gives surface-level information and it didn’t help me make my trading decisions.
You can also track your portfolio and investment performance with graphs and charts, but again, these are basic tools. I also noticed that the data wasn’t very specific.
The sheer lack of analytical data is a huge downside to Freetrade. I would have preferred to be given more data that I could use to inform my trading decisions and to review my portfolio in detail.
Despite the lack of analytical tools, one thing that Freetrade has going for it is its educational resources and community. Beginners can learn about investing from the very basics, such as what a share is.
There’s also a fantastic community that you can access on Freetrade. This is great for traders of all levels to interact and learn from each other.
I also liked how the site has articles that provide the latest in trading. This is handy for staying up to date with the markets.
Freetrade only allows you to deposit funds in GBP. Whilst this wasn’t an issue for me, it would be a problem if you’re outside of the UK.
It’s disappointing that Freetrade doesn’t offer as many currencies as its competitors. So, if you’re outside of the UK, be prepared to lose some funds with the currency exchange.
Furthermore, the New York Stock Exchange and the London Stock Exchange are the main markets that you can trade with. If you were hoping for diverse trading options, Freetrade isn’t for you.
Freetrade Alternatives
If you think Freetrade isn’t the right trading platform for you, here are some alternatives to consider:
- eToro: Ideal for traders who want a more social aspect of trading. The community allows investors to interact and learn from each other. You also benefit from commission-free stock trading.
- Trading212: If you’re after a simple platform, Trading212 is one to consider. It’s also great for investors who are interested in CFDs and equity.
- Hargreaves Lansdown: Beginners can make great use of this platform. The navigation is easy to grasp and the customer support is excellent.
- Interactive investor: I can recommend interactive investor for traders who want to primarily trade on the UK market. It’s also fantastic for beginners.
What Are the Pros and Cons of Freetrade?
Pros of Freetrade:
- User-friendly interface: Freetrade offers a user-friendly platform that is easy to navigate, making it accessible for both beginner and experienced investors.
- Commission-free trading: Freetrade allows users to trade stocks and ETFs without paying any commission fees, making it cost-effective for frequent traders.
- Regulated and secure: Freetrade is regulated by the Financial Conduct Authority (FCA) and takes measures to ensure the security of user funds, such as keeping client money in segregated bank accounts.
- Educational resources: Freetrade offers educational resources and tools to help users learn about investing and make informed decisions.
Cons of Freetrade:
- Limited investment options: While Freetrade offers a variety of investment options, it doesn’t have as extensive a selection compared to some traditional brokerage firms. Certain assets, such as mutual funds, are not be available on the platform.
- Premium features require a subscription: Some advanced features and services on Freetrade, such as access to tax-efficient accounts (ISA & SIPP) are available through paid subscription plans only.
- Currency conversion fees: Freetrade charges fees for currency conversions, which can impact the overall cost of trading when dealing with foreign stocks or currencies.
Freetrade Review UK – Final Thoughts
I wasn’t blown away by Freetrade’s platform. The main issues are that you’re limited to UK and US markets and there’s a severe lack of analytical tools. You can also only make trades via the iOS or Android app.
Where Freetrade shines is with its community, educational resources, and low fees. The process of opening and verifying an account is also easy.
After reading through my review, I hope that you’re left with a better idea of what Freetrade has to offer. Be sure to consider the main features, pros, and cons before making a final decision.
FAQs
Is Freetrade safe?
Freetrade is regulated by the Financial Conduct Authority (FCA), ensuring that they operate within the guidelines and regulations set forth by the regulatory body. Additionally, they employ the practice of keeping client money in segregated bank accounts. This means that your funds are held separately from Freetrade’s own accounts, preventing them from utilising your money for any purposes. These measures provide added security and contribute to the overall safety of using Freetrade as a platform for your financial activities.
How does Freetrade make money?
Freetrade operates under a freemium model, offering users the option to access additional features through two distinct monthly subscription plans: Freetrade Standard and Freetrade Plus. These subscriptions provide users with enhanced functionality and services in exchange for a fee. In addition to the freemium model, Freetrade generates revenue through currency conversion fees, which are incurred when users convert funds from one currency to another. Furthermore, Freetrade earns income by collecting interest from the funds it loans to other institutions. These various revenue streams contribute to the financial viability of Freetrade as a platform.
Can you actually make money on Freetrade?
Yes, it is possible to make money on Freetrade by investing in stocks and other financial instruments. However, investing always carries risks, and there is no guarantee of profits. The performance of investments can fluctuate, and there is always a possibility of incurring losses. It is advisable to conduct thorough research, diversify your portfolio, and make informed investment decisions when using Freetrade or any other investment platform.
Is Freetrade legitimate?
Yes, Freetrade is a legitimate platform. It is regulated by the Financial Conduct Authority (FCA) and operates within the guidelines and regulations set by the regulatory body. This provides assurance of its legitimacy and adherence to industry standards.
Does Freetrade affect credit score?
When you sign up for Freetrade, they conduct onboarding checks by searching your record at credit agencies. However, this process leaves a “soft footprint” on your file, which is not visible to lenders and does not impact your credit rating. In other words, Freetrade’s checks do not have a direct effect on your credit score.
