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Freetrade Review: Everything You Need To Know

I moved over from Hargreaves Lansdown and have been with Freetrade for just over a month now. I have the Freetrade General Investment Account, and Freetrade Self Invested Pension Plan (SIPP) products. The attraction to Freetrade was the much lower fees. In this Freetrade review, I share what I have learnt so far about this amazing platform.

Disclaimer: Investments can rise as well as fall in value and you may get back less than your initial investment. This blog does not provide financial advice. Seek professional advice to determine if an investment is suitable for you.

Affiliate Disclosure: This post may contain affiliate links that earn this site a commission at no extra cost to you. Everything we recommend, we have used ourselves and hope you find the recommendations helpful.

What is Freetrade?

Freetrade won the 2020 Brish Bank awards for the best online trading platform. Freetrade is an online investing/ trading platform that allows you to trade commission-free at a very low cost.

How much does Freetrade cost?

  • Trades: Free
  • General Investment Account: Free
  • Stocks and Shares ISA: £3/Month
  • SIPP Account: £9.99/Month
  • Spot rate: +0.45% FX rate
  • Freetrade offers a stepped or ‘premium’ pricing model where you can pay for additional features

How does Freetrade work?

Freetrade is a DIY investment platform. It does not offer funds like Hargreaves Lansdown or AJ Bell does.. Freetrade allows buying and selling of UK and US-listed shares and ETF (Exchange Traded Funds) and investment trusts.

All investing is carried out via the Freetrade app. Funding the account in the Freetrade app through your bank is now instant. It used to take a day or two before the money was available to invest.

Once the money is in your Freetrade account, you can search for UK and US stocks and shares along with ETFs and Investment Trusts. Not all stocks or ETFs are available on the ‘free/ standard offering’. If you want access to all stocks and ETFs, you may need to upgrade to Freetrade Plus (£9.99 per month on top of the existing product cost you have).

An example of an ETF requiring the ‘Plus’ account was HSBC ETFS PLC MSCI EMERGING MARKETS UCITS ETF GBP (HMEF) – Emerging markets tracker. I found an equivalent with iShares, which was available and worked fine on the free GIA & the base level SIPP account.

How to set up a Freetrade account?

  1. If you have a friend who is already on Freetrade, ask them to send you a referral link. That way, both of you qualify for a random free share (between £3 – £200). Don’t worry if you don’t; go to the next step!
  2. Download the Freetrade app
  3. Open the Freetrade app and enter your email address.
  4. Confirm your e-mail address (check your emails) and log into Freetrade
  5. Choose a 4 digit passcode & confirm your passcode
  6. Enter your legal name, date of birth, where you live/ address, nationality & NI number
  7. Choose your account type- Freetrade GIA or ISA
  8. Complete your W-8BEN declaration (to qualify for the free share)
  9. Top up and fund your account
  10. Start investing!
Freetrade Discover Stocks and ETFs
Freetrade APP Discover Stocks and ETFs

Freetrade General Investment Account: My experience so far

I got the Freetrade GIA to facilitate applying for my Freetrade SIPP. The GIA is free.

Freetrade GIA Pros

  • Each time you refer a friend, you get a free share!
  • Freetrade platform is easy and intuitive to use
  • Investing with the GIA is REALLY cheap – Free, basically!
  • Good variety of stocks and ETFs to satisfy my investment needs, although you need Freetrade Plus (£9.99) to unlock the full range of stocks and ETFs 
  • The online chat feature is good and responsive in answering queries.

Freetrade GIA Cons

  • You need Freetrade Plus (£9.99) to access the full range of stocks and ETFs on the platform
  • There are no Funds on the platform. I’m being pedantic as there are plenty of equivalent ETFs though!

Freetrade SIPP: My experience so far

My investment method is to invest in low-cost index funds and minimise ongoing fees, and that was the reason I moved from Hargreaves Lansdown.

Freetrade SIPP Pros

  • The investing is VERY cheap. Using Hargreave Lansdown SIPP index funds, my SIPP was costing circa £600 a year. With Freetrade SIPP, my fees are now circa £120 per year!
  • You get a FREE SHARE.
  • Freetrade, at the time of writing, is offering a free share when you open a SIPP. I was allocated Shopify (valued at $1,106) once my pension transfer was complete.
  • The Freetrade platform is easy to use. I mainly invest in EFT index trackers.

Freetrade SIPP Cons

  • Nitpicking, I would prefer to have a phone number to call if I have a query. That said, I guess having everything online is why Freetrade SIPP costs are so low
  • The Freetrade monthly £9.99 fee is taken directly from my current account as it can not be deducted from the SIPP account currently.
  • Dividend Cash payment cannot be automatically reinvested.

Is Freetrade legit?

Freetrade is legit. Freetrade is authorised and regulated by the Financial Conduct Authority – Registered in England and Wales (no. 09797821).

Is Freetrade protected by FSCS?

The FSCS protection covers your investments with Freetrade up to a value of £85,000.

How are dividends paid on Freetrade?

Dividends are paid as cash into your account and you can decide what you would like to do with them.

Can you short on Freetrade?

Freetrade does not offer short selling on the platform currently. Freetrade is geared towards long term investing and does not offer betting, CFD or other complex products.

Can you make money on Freetrade?

You can make money on Freetrade investing in a diversified portfolio over a long term – ideally 20-30 years plus.

Be aware that stocks can rise and fall in value, and you may receive less than your initial investment. Seek professional advice to make sure investments are suitable for your needs.

You can also make money on Freetrade by taking advantage of the free share offers they have on their various products.

Why does Freetrade need NI number?

The reason why Freetrade needs your National Insurance Number is that most purchases of stocks and shares are usually taxed by HMRC at 0.5% known as ‘Stamp Duty’.

In addition, your NI number is needed to satisfy reporting rules to HMRC for Stocks and shares ISAs and SIPP accounts.

How long does Freetrade take to verify?

Freetrade verification normally takes 2-3 working days. Mine was slightly quicker. If Freetrade needs any additional information for verification, they will contact you via e-mail. 

How do I delete my Freetrade account?

  1. Sell any shares/ ETFs/ Investment trusts you may have with Freetrade
  2. Withdraw any money you have from your Freetrade Accounts. 
  3. Notify the Freetrade team via live chat that you would like to close your account.

Freetrade overall?

Freetrade is an excellent platform that genuinely offers lower cost simple investing for many. Please leave a comment in the section below if you have any questions!

Investments can rise as well as fall in value and you may get back less than your initial investment. This blog does not provide financial advice. Seek professional advice to determine if an investment I suitable for you.

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