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Freetrade Vs Trading 212

Freetrade Vs Trading 212 feature image

Published on:

Written by: Michael Barton

Published on:

Written by: Michael Barton

Michael has almost quarter of a century’s experience in the financial world. This includes trading and institutional sales trading, and in senior positions to VP of Global Equities, as well as Head of Trader Training, at companies including Merrill Lynch (SNC), Cargill Investor Services, and Goldman Sachs. Michael’s experience also extends to providing financial advice as a personal financial advisor in the UK.
This article has been fact checked by a member of the Wallet Savvy editorial team and complies with our editorial standards.

We put two of the biggest DIY trading platforms head to head in this Freetrade Vs Trading 212 review. Which one looks set to help you the most with your trading?

Freetrade vs Trading 212 – two of the giants in DIY trading platforms in the UK. With both offering commission-free trading in ETFs and shares, which is best for you?

In this article, I compare the two platforms across a range of factors. From services to accounts, investment products to assets, costs to customer services, you’ll find all you need to know to help you make your trading platform choice.

Quick Verdict: Which Is Best?

Both Freetrade and Trading 212 provide a route to DIY investing at low cost (and zero commissions), and deliver a solid foundation for potentially profitable investing.

Freetrade has a no-frills approach that gives it the edge for beginners in shares and ETFs, and it also offers ISA and SIPP wrappers.

Trading 212 is also good for beginners, but it has a few features that make it better for more experienced investors, as well as a broader choice of investment instruments, though no SIPP product.

*Capital at risk. 77% of retail CFD accounts lose money.

What Are Freetrade & Trading 212?

Both Freetrade and Trading 212 promote commission-free trading of a range of shares and ETFs.

Trading 212 also makes it possible for trading in some other assets. Freetrade’s customer base is predominantly UK investors, while Trading 212 (which began in Bulgaria) has a more global reach.

Freetrade started as the brainchild of a group of fintech specialists who wanted to bring stock trading to the masses. The platform has been designed to be easy to use – a clean, clear interface that removes complexities usually associated with trading.

It’s a platform that is particularly popular with beginner investors, and now boasts around 1.5 million users.

Trading 212 was first founded in 2006, though it didn’t launch its trading platform until 2013. Having a more global reach and a more diverse range of asset choices, it caters to a broader range of investors – around 15 million worldwide.

What Services Do They Offer?

Both Freetrade and Trading 212 allow you to invest in shares and ETFs. You can also trade in gold, cryptocurrencies, and CFDs (Contracts for Differences) on Trading 212.

They both let you trade in fractional shares – that’s a part share if you don’t have enough money to buy a full share (like the hundreds of dollars it could cost to buy a single share in companies like Apple, Amazon, and Microsoft).

Both platforms have a social aspect – forums on which users can share information, ideas, and winning and losing trades, ask and answer questions, etc. They also provide a range of guides and advice for investors.

What Account Types & Investment Products Are Available?

While the services offered by Freetrade and Trading 212 are not far short of identical, it’s in the types of account and investment product mix that we begin to see some daylight between the two platforms.

Both offer three account types; however, it’s here where the similarity ends.

Freetrade Plans

Freetrade offers three plans: Basic, Standard, and Plus. Each plan includes commission-free trading.

As you move from the Freetrade Basic to Freetrade Plus, access to investment products, assets, and other features improve:

Freetrade Basic Plan

No account fees.

You’ll have access to Freetrade’s General Investment Account (GIA), and be able to trade in around 4,700 stocks and ETFs commission free (though there may be other charges). You’ll also be able to deal in fractional shares in the United States, and receive 1% AER on up to £1,000 of uninvested cash.

There’s an FX charge of 0.99% when converting from one currency to another, and a treasury custody fee of 0.45%.[MB1] 

Freetrade Standard Plan

£5.99 per month (or £59.98 per year).

With access to a stocks and shares ISA as well as a GIA, you can invest to benefit from the tax advantages of an ISA. You’ll have a wider range of shares and ETFs to choose from too (more than 6,000), access to stock analysis tools, and automated order types (such as limit orders) and pay a lower FX fee of 0.59%.

The interest payable on uninvested cash is more attractive, too – 3% AER on up to £2,000 – and the treasury custody fee is reduced to 0.10%.

Freetrade Plus Plan

£11.99 per month (or £119.98 per year).

You get everything you would on the Freetrade Standard Plan, plus:

  • You can open a SIPP (Self-Invested Pension Plan)
  • 5% AER on up to £3,000 uninvested cash
  • 0.39% FX fee
  • Priority customer service

The Freetrade platform is also available on desktop to Plus Plan subscribers.

Trading 212 Accounts

All of Trading 212’s accounts are free, and you can switch between them in the Trading 212 app.

Trading 212 Invest

Invest commission free in more than 13,000 shares and ETFs from around the world.

However, you will be charged a 0.15% fee for trades in a different currency, and deposits into your account are charged at 0.70% after you have deposited more than £2,000 in total (though these fees don’t apply to bank transfers).

Trading 212 ISA

All the features available in Trading 212 Invest, but in an ISA wrapper.

Trading 212 CFD

This is the account that gives you access to trading in forex, commodities, indices, and cryptocurrencies. However, it’s not for the faint-hearted!

Though they can help to explode potential profits, CFDs carry much more risk – you can lose all your investment, plus some.

To help protect you against even worse damage to your wealth, you will have negative balance protection, and you can place stop loss and take profit orders. There is no deposit fee in this account, though a 0.5% fee for closing a position that is not in the same currency is charged.

(I’ve traded CFDs profitably in the past, but the experience can be something of a rollercoaster ride. The ups and downs can be violent and, according to Trading 212 themselves, 77% of retail investors lose money when trading CFDs.)

If you are a very experienced trader, you can upgrade to a Trading 212 Pro Account to gain access to leverage of up to 1:500.

For example, if you have deposited £100 and trade with a 1:10 leverage, you can open a position worth £1,000. Way more profit potential, accompanied by way more loss potential.

Trading 212 pays interest of up to 5.1% on uninvested cash, though the exact AER depends upon the currency in your cash account.

Demo Trading Accounts

Only Trading 212 offers a demo trading tool, and I would highly recommend that you make effective use of this. It will help you get used to the platform, as well as try out your trading strategy.

Always commit your time before you commit your money.

*Capital at risk. 77% of retail CFD accounts lose money.

What Assets Can You Trade On Freetrade Vs Trading 212?

Both Freetrade and Trading 212 give you access to trade shares and ETFs.

In Freetrade’s case, more than 6,000 in the UK, US, and Europe. As a Basic Plan holder, you can trade in the UK 350 (Large + Mid Cap), Freetrade US 500, Vanguard + iShares + Invesco ETFs, AIM 100, and Europe 150.

As a Standard or Plus Plan subscriber, you’ll also be able to invest in other UK small cap shares, US shares, ETFs, and European shares.

You only need to deposit £1 to open an account at Freetrade, and the minimum trade size is just 10 pence (£0.10).

Trading 212 gives you access to more than 13,000 global investment instruments, including shares, ETFs, commodities, FX, and cryptocurrencies: great coverage. You can also set up ‘Pies’: not the steak and kidney sort, but an auto-investment facility that lets you set up your own portfolio of up to 50 securities.

It’s like being your own fund manager, and you can even set deposit schedules, investment duration, and deposit amounts. (I love this facility – I only wish they would create a SIPP that allows you to do this. Now that would be cool!)

The minimum deposit at Trading 212 is £1 (£10 for a CFD account) with a minimum trade size of £1.

How Do Costs Compare?

As a trader or investor, it’s crucial to consider all your costs as they can significantly impact the overall performance of your investments. Even small fees can compound over time and make a significant (negative) difference to your returns.

Here’s how Freetrade and Trading 212 stack up in terms of costs:

FeatureFreetradeTrading 212
Commission FeesNoneNone
Foreign Exchange Fee 0.39% to 0.99%0.15%
Inactivity FeeNoneNone
Account Fee£0 to £11.99 per monthNone
Withdrawal FeeNoneNone
ISA (for UK investors)Only available in Premium PlansFree
SIPP (Self-Invested Personal Pension)Only available in Plus PlanNot available
Minimum Deposit£1£1 (£10 for the CFD Account)
Deposit FeesNo charge0.7% above a total of £2,000, unless by bank transfer

Also note that you will need to pay any taxes or other charges levied by governments, tax bodies, or exchanges in the countries where you trade.

User Experience

Navigating the Trading 212 app is a smooth, effortless experience. You can switch between accounts and instruments easily. It’s just as easy to access charts and fundamental analysis, and placing trades can be done in just a couple of clicks.

Freetrade’s app may not have as many features as Trading 212, but it’s similarly easy to use. It’s a no-fuss approach that is ideal for beginners, with all the information you need at your fingertips.

How Do Freetrade & Trading 212 Make Money?

No commission and low costs are the name of the game at both Freetrade and Trading 212, but they must make money to survive. How they do so is different.

Freetrade makes its money mostly through subscriptions on its premium plans, charging for additional features.

Trading 212 relies heavily on making money from the spread between buy and sell prices on its platform, as well as some service fees.

Are They Safe To Use?

As well as offering a great platform experience, both Freetrade and Trading 212 have implemented robust security measures to protect their customers.

Both are authorised and regulated by the Financial Conduct Authority (FCA), which means they must adhere to the strictest financial and operational standards.

Your money is protected by the Financial Services Compensation Scheme (FSCS), too. This means that, should either company suffer financial difficulties (such as bankruptcy), you could be eligible for compensation and £85,000 of any money you hold at either company is fully protected.

(Of course, this doesn’t cover investment performance – as we all know, the value of your investments can go down as well as up.)

Additional security measures include industry-standard encryption to protect users’ personal and financial information, and two-factor authentication (2FA), to add an extra layer of security at login and for certain transactions.

In short, both Freetrade and Trading 212 are safe to use.

Are Freetrade & Trading 212 Good For Beginners?

If you’re just starting out in DIY investing, choosing a trading platform can be a daunting proposition.

You won’t be disappointed whether you invest in Freetrade or Trading 212. Each benefits from what I consider to be the key factors for those starting out on their investment journey.

The trading apps themselves are easy to navigate, and make selecting investment instruments and then trading them easy. Real-time snapshots of your positions and performance make monitoring your portfolio a breeze, and Trading 212’s Pie feature is a real winner.

Now, although I would be classed as an experience professional, I believe there is always something to learn. Which is why I also think the educational materials on both platforms are extremely useful, especially for novices.

So, too, is the social aspect – it’s good to be able to discuss ideas and hear ‘the noise of the trading room’.

It’s easy to open an account, and the low and transparent fees are a huge plus. The customer service at both is good, with access in a variety of ways including in-app chats and email.

To round things off, you can use a demo account to evaluate the Trading 212 app and get used to placing orders, and low deposits and fractional share trading mean you don’t need to commit your life savings to get started.

What Do Other Customers Say?

It’s always good to hear what others have to say. This helps you gauge reputation.

Trading 212 has received almost 29,000 reviews on Trustpilot, with more than three quarters of these giving the platform 5 stars, and an overall score of 4.6/5 stars. Customers are quick to point out the app’s easy-to-use design and accessibility for beginners.

Freetrade scores a slightly lower 4.1/5 stars on Trustpilot, from almost 4,000 reviews. 67% of these reviews are 5 stars, with many remarks commending the app’s user-friendliness and customer support.

Pros & Cons Summarised

As a brief recap, let’s look at the pros and cons of both trading apps:

Freetrade

Trading 212

*Capital at risk. 77% of retail CFD accounts lose money.

Our Take

The choice of which trading app is best for you boils down to your investment goals and preferences.

If you want a simple, easy-to-use platform that focuses on shares and ETFs, with zero commission, then Freetrade could be the one for you.

On the other hand, if you want a wider choice of investment options with features like semi-automated portfolio creation, Trading 212 could be more up your street.

Regardless of which you select, make use of all the features available, especially the demo account with Trading 212.

Of course, whichever you choose, it’s important to remember that when trading or investing, your capital is at risk. Always make sure that you invest in line with your financial goals and your appetite for risk.

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