Freetrade review (original) (raw)

How we rated Freetrade's investment features

Freetrade is a commission-free trading platform with a slick interface and pink colour scheme. It’s a popular choice for new investors and beginners looking for an attractive app and easy to use platform.

Freetrade uses the “freemium” model – which means that it has features that are free for users, but additional features come at a cost. Along with paying no commission to buy or sell shares, you can even get free shares for referring friends.

Our Freetrade review takes an in-depth look at the features and fees, along with explaining what you get with each of Freetrade’s 3 plans.

Hands-on test: I tried out Freetrade's investing app

"Freetrade has been a fan favourite since it burst onto the scene, and there’s a lot to like. Freetrade is a well-designed investing app and it’s ideal for the simple buying and selling of stocks and ETFs with no commissions. However, it has been lacking some innovation lately, and the plans, pricing and benefits can get slightly confusing."

Freetrade fees

Although Freetrade charges no commission for buying or selling stocks, there are some fees to be aware of.

If you decide to buy US or European stocks, you’ll need to pay an FX fee which works on a tiered system based on your plan.

You’ll also still have to pay UK stamp duty (like with other platforms for some investments), and things like exchange-traded funds (ETFs) and investment trusts will have ongoing fees. But neither of these are under Freetrade’s control.

As Freetrade works with a “freemium” model, there’s the opportunity to upgrade your account to get access to tax-efficient accounts, extra stocks and shares, interest on idle cash, and additional features like stock analysis. We’ve listed these details under “Compare Freetrade accounts”.

Freetrade investment choice and stocks

Freetrade allows you to invest in top shares on the London Stock Exchange (LSE), plus access to stocks from the two biggest US exchanges – the Nasdaq and the New York Stock Exchange (NYSE) along with a number of European investments. So you’re able to access the majority of the biggest and most popular stocks from the US, UK and Europe.

You can also diversify your portfolio by investing in more than 400 exchange-traded funds (ETFs) and investment trusts.

On Freetrade there’s over 6,000 (4,800 with the Basic plan) investments. And it’s adding to this regularly. You can see Freetrade’s full stock list on its website. The table lets you search for stocks and check which ones are tradeable with Freetrade Standard and Plus.

The minimum deposit for the Freetrade app is £1, but the minimum investment you can make is £2 with fractional shares from the US. For UK shares, only whole shares can be bought.

Is Freetrade safe?

As you’d expect, Freetrade is regulated by the Financial Conduct Authority (FCA). It’s also a member of the Financial Services Compensation Scheme (FSCS) so your deposits up to £85,000 are protected should Freetrade go bust.

The Freetrade app also comes with plenty of security features to keep your portfolio secure.

Although as always when you invest, your capital is at risk.

Freetrade account types and products

At the moment, you can invest in 3 account types with Freetrade:

• General investment account (GIA)
• Stocks and shares ISA
• Self-invested personal pension (SIPP)

The GIA is free with the Freetrade Basic plan but it’s worth noting that you need to be a Standard subscriber to access the stocks and shares ISA and a Plus subscriber for the SIPP.

One useful aspect to Freetrade’s accounts is that you can earn 1% interest on up to £2,000 of uninvested cash with Standard and 3% interest on up to £4,000 with Plus.

Freetrade general investment account

This is included with all of Freetrade’s plans – you can trade as many stocks and exchange-traded funds (ETFs) as you like, commission-free.

People usually choose to go with the GIA after they have used up their ISA allowance for the year, as you may need to pay capital gains or dividend tax on any profits you make.

Freetrade stocks and shares ISA

The Freetrade stocks and shares ISA lets you invest up to your yearly allowance each tax year and protect the majority of your profits from tax. The allowance for the 2024/2025 tax year is £20,000. This means you can invest £20,000 in the available stocks and ETFs and minimise the tax on the profits you make.

You can open an ISA with the Freetrade app. It’s part of the Freetrade Standard plan which costs £5.99 per month (or £59.88 per year paid annually, equal to £4.99 per month).

On cost it’s tough to beat, especially if you’re looking to invest serious money over the long-term. You can also transfer your existing ISA into your Freetrade account. Recently, Freetrade has made changes to make its ISA flexible, this means you can withdraw money and replace it within the same tax year without impacting your yearly allowance.

Freetrade self-invested personal pension (SIPP)

Freetrade has a SIPP available for Plus subscribers. A SIPP is a type of personal pension that allows you the freedom to choose what you want to invest in.

How much does the Freetrade SIPP cost?

The Freetrade SIPP is included in the Plus subscription, so it costs £11.99 per month (or £119.88 if you pay annually).

What features does the Freetrade SIPP have?

Here are some of the features of the Freetrade SIPP:

• Flat fee. Some SIPPs are charged as a percentage of what you invest – a flat fee can work out cheaper if you have a bigger retirement portfolio.
• Fractional shares. You can buy fractions of shares of US stocks – great for when one share of a company is expensive.
• Transfer in other pension pots. You can transfer in other pension pots to Freetrade.
• Tax relief. You can claim tax relief on up to £60,000 of contributions each year.

Keep in mind, your money is locked in until you turn 55 (rising to 57 in 2028).

Freetrade ease of use

Freetrade scored well in our ease of use assessment. We particularly like that there are a few ways to get hold of the support team (but no telephone option) and you can get priority customer service on the Plus plan.

One downside is that there’s only a mobile app available, you can’t invest on the desktop yet. There is a desktop beta trial ongoing at the moment but only for the Plus subscribers.

On the App Store, Freetrade scores 4.3 out of 5, and on Google Play it has a lower 4.65 out of 5 (as of December 2023).

Freetrade customer reviews

In the 2024 Finder customer satisfaction survey, 83% of Freetrade customers said they’d recommend the platform. Many customers commented on how easy the app is to use.

One customer said: “I have been using this brand for over a year and it’s very easy to buy and sell shares on the app and…transfer money into my account.”

Another said: “I really enjoy using the Freetrade app. It’s informative, simple and fun.”

Trustpilot reviewers gave Freetrade a 4.1 out of 5 “great” rating (as of February 2024).

Case study: Daniel signed up to Freetrade for the free shares, but uses the app most days because of the great mobile experience

"I chose Freetrade for 2 reasons – firstly, my dad was using it and secondly, there was an offer of a free share. I signed up and got a share worth about £30, which I was really happy about.

I’m on the app most days – I check it about 5 days a week and the experience on mobile is really good. It’s so easy to use. I don’t think this is the app for real trading geeks, but it’s more suited to people who are beginners or intermediate investors.

If there’s one thing you’d tell a friend who’s thinking of getting this, what would it be?

Always think about what you’re going to use your investing app for before you choose it – that’s the best way to choose your platform."

Freetrade tools, resources and features

Freetrade has a decent range of basic analysis features, investing tools and learning resources on offer for investors, including an active community forum to add a social aspect.

Freetrade has a range of ways that you can research and analyse investments, either to analyse the performance of shares that you already own or decide whether to invest at all.

Some features are exclusively for Standard and Plus members, but you can access the basics with its free account. Here’s what it has available:

• Market capitalisation. This is the market value of the company. It’s worked out by multiplying the share price by the number of shares outstanding.
• Dividend yield. This is the dividend amount shown as a percentage and relative to the share price and is calculated by dividing the total dividends by the number of shares outstanding.
• Price-to-earnings (P/E) ratio. This is a ratio to represent the stock price relative to its earnings per share (EPS). Earnings per share is the total profit after tax divided by the number of shares outstanding. P/E ratio is the stock price divided by the EPS.
• Beta. This is an indication of the market risk that the stock faces. It assesses how exposed a company is to factors that are impacting the whole market.
• Price-to-book (P/B) ratio. This assesses the stock price in relation to its “book value” per share (BVPS). Book value per share is common equity (assets minus liabilities) divided by shares outstanding.
• Price-earnings-to-growth (PEG) ratio. This is the P/E ratio divided by the growth rate of earnings over 3 or 5 years. The growth rate is either average growth or compound annual growth (CAGR).
• Standard and Plus only. Analyst ratings and advanced stock fundamentals. This shows how analysts rate individual shares (favourable, neutral and unfavourable), which it refreshes daily. You can also use automated order types.

How do Freetrade’s analyst ratings work?

Freetrade has launched analyst ratings, showing how analysts feel towards stocks – between favourable, neutral and unfavourable. Analysts will constantly research certain stocks in order to determine a current view (a rating) on the company and its share price, stating whether it believes the stock is undervalued (likely to rise in price), overvalued (likely to decrease in price) or just right (like Goldilocks’ porridge).

There are a few different ways this might be presented. Some companies label stocks as “overweight”, “buy”, or “outperform” – these are all positive terms to use about stocks. In contrast, you may hear a stock labelled as “underweight”, “sell” or “underperform”, which are all negative terms to use about stocks.

Freetrade’s analyst ratings tell you how analysts feel about the future prospects of the company in relation to the current stock price.

Compare Freetrade plans

Freetrade has a few different options and plans. These plans are called Freetrade Basic, Freetrade Standard and Freetrade Plus.

There’s a monthly cost for Standard and Plus, but in exchange you get access to more stocks, tax-free wrappers (ISA and SIPP), interest on cash, and extra stock analysis. Here’s the difference between the 3 Freetrade plans:

Freetrade Basic

The basic plan costs nothing to open and hold and includes a GIA for investing. Here are the main features of Basic:

• Commission-free investing
• No platform fee
• 0.99% FX fee
• Fractional US shares
• Access over 4,800 investments

Freetrade Standard

This is the middle ground between the free Basic plan and the premium Plus plan. Here’s what’s included and the key points:

• £5.99 monthly platform fee (or £59.88 paid annually)
• 1% interest on cash (up to £2,000)
• Access over 6,000 investments
• Ability to use automated order types
• Advanced stock fundamentals
• A stocks and shares ISA wrapper

Freetrade Plus

This is Freetrade’s premium subscription and comes with all the bells and whistles Freetrade has to offer:

• £11.99 monthly platform fee (or £119.88 paid annually)
• 3% interest on cash (up to £4,000)
• Access over 6,000 investments
• Ability to use automated order types
• Advanced stock fundamentals
• A stocks and shares ISA wrapper
• A SIPP
• Web desktop beta trading platform
• Priority customer service

On top of this all, Freetrade creatively refers to you as a “Plustomer”. If that doesn’t sell it to you then I don’t know what will.

How to set up your Freetrade account

Setting up is super easy. You can download the Freetrade app on the App Store and Google Play.

Once you open the app, you’ll need to provide:

• Your name
• Your address
• Your national insurance (NI) number

Some of our team also had to provide additional info:

• Proof of address
• ID (driving licence or passport)

Once you’ve done that, you can then choose an account type and link up your bank account.

Freetrade free shares

After you buy your first share, you’ll be able to refer a friend. Send your lucky pal a link, and once they’ve signed up, filled out the W-8BEN form and funded their account, you’ll both get a free share worth between £10 and £100.

You can get up to 10 free shares each month. Your friend will need to fund your account within 30 days of signing up.

Freetrade dishes out the free shares on Fridays.

Who might Freetrade suit?

This platform is going to be best-suited for beginners and those who want to invest using a nice, clean interface. The 0% commission helps to make it a cheap place to invest and the app is excellent to use, but it’s not a sophisticated trading platform with loads of tools and bells and whistles.

If you don’t think this would suit you, why not compare share trading platforms to find the right fit to match your style.

Share dealing platform scores

★★★★★ — Excellent

★★★★★ — Good

★★★★★ — Average

★★★★★ — Subpar

★★★★★ — Poor

Finder Scores, in blue, are based on our expert analysis. We also show reviews from users, where we've received more than 10, with a score in yellow. We gather more reviews from customers every year in Finder's customer satisfaction survey. Our full methodology explains more, including we pick the best platforms for different uses.

All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.