Share Dealing Account Types and Comparison

If you're considering opening a share dealing account, it's essential to understand the different types available. A standard share dealing account is the most common type, allowing you to buy and sell shares online or over the phone.

This type of account usually comes with a fixed fee for each trade, which can range from £5 to £20 per trade. You can also opt for a trading platform that offers a commission-free service, but be aware that you may still face other charges.

For more frequent traders, a regular share dealing account might not be the most cost-effective option. A regular investment account, on the other hand, allows you to invest a fixed amount of money at regular intervals, often monthly. This can be a great way to invest small amounts of money over time.

If you're new to share dealing, it's essential to choose the right account for your needs. Interactive Investor is a great option for beginners, offering a low-cost share dealing platform with over 40,000 shares to invest in.

Their fixed-fee share dealing account charges £4.99 per month, with share dealing fees ranging from £3.99 to £5.99. This makes it an affordable option for those who want to buy and sell shares on a regular basis.

You can also open a stocks and shares ISA with Interactive Investor, which means you won't have to pay tax on a certain amount of your profits. This is a great way to start investing in shares without breaking the bank.

If you're looking for other options, Hargreaves Lansdown and IG are also great choices for beginners. They both offer stocks and shares ISAs and have user-friendly platforms.

Before choosing a share dealing account, make sure to compare the costs of buying and selling shares, as well as the account fees. Some accounts may charge a minimum deposit, so be sure to check that too.

Here are some key facts to consider when choosing a share dealing account:

Remember, it's essential to choose an account that suits your investment goals and needs. Don't be afraid to ask questions or seek advice if you're unsure.

Interactive Brokers is an excellent choice for sophisticated share dealers who want to manage their own portfolio with complex order types actively. They offer a wide range of investment products like derivatives, options, and futures.

Interactive Brokers has a minimum deposit of £500 and offers a share dealing account charge of £0, with a share dealing fee of 0.05%. Saxo Markets is another option for experienced and professional share dealers, with a minimum deposit of £500 and a share dealing commission based on a percentage of transaction size.

Saxo Markets charges a share dealing commission starting at 0.1% (£100 if you buy £100,000 worth of stock) and drops to 0.05% for more active traders. AJ Bell is a great option for beginners, with a minimum deposit of £1 and a flat fee per month of £4.99 for your account.

Here are some of the top share dealing accounts in the UK:

There are different types of share dealing platforms available, each with its own unique features and benefits. IG offers a mixture of complex and simple share dealing options.

You can choose from three main types of share dealing accounts, including execution only, advisory, and discretionary. Execution only firms provide a platform to buy and sell shares, while advisory firms offer share dealing services along with investment advisory services.

Bestinvest is an example of an advisory firm, providing share dealing services along with investment advice. Discretionary firms, on the other hand, manage your money and make trades on your behalf, like a wealth manager.

Here are the three main types of share dealing accounts:

It's worth noting that some firms, like Bestinvest, offer a combination of these services. By understanding the different types of share dealing platforms, you can choose the one that best suits your needs and investment goals.

Saxo Markets is a top choice for experienced and professional share dealers. It's known for its wide market access, allowing traders to deal on more than 50 stock exchanges around the world.

Its platform offers a diverse range of shares, with over 22,000 available for investors. This is a significant advantage for those who want to diversify their portfolio and invest in a variety of assets.

Saxo Markets is particularly good for traders who need direct market access and are sensitive to bid/offer spreads. Its fees are competitive, with a share dealing commission starting at 0.1% (£100 if you buy £100,000 worth of stock) and dropping to 0.05% for more active traders.

The platform is also user-friendly, making it easy to trade when the market is open (between 8am and 4:30pm Monday to Friday). You can get a live quote, which will be the best price at that moment, or choose a limit order, which is a fixed price you want to buy or sell at.

Here are some key features of Saxo Markets:

Overall, Saxo Markets is a great option for professional traders who want to access a wide range of markets and enjoy competitive fees.

Full-service brokers offer a range of services, including investment advice, stock tips, and portfolio management. They typically charge a premium for these services, but can be a good option for those who want hands-on guidance.

Online/discount brokers, on the other hand, are much less expensive, with costs usually based on a per-transaction basis. You can typically open an account with little or no money and start buying and selling stocks instantly.

Some online brokers, like AJ Bell, offer low-cost share dealing platforms, with fees capped at £3.50 a month for shares. They also provide plenty of investment ideas, including investment guides and equity research.

Other online brokers, like Interactive Investor, charge a flat fee per month, £4.99, for their share dealing account. This can be a cost-effective option for more experienced investors with larger portfolios.

If you're looking for a broker that offers a wide selection of stocks for share dealing, Hargreaves Lansdown is a great choice. They also have one of the best research portals for analyzing stocks.

Here are some key features to consider when choosing a broker:

Remember, the choice of broker should be based on your individual needs and preferences. Some brokers may offer more features or better services, but may also come with higher fees.

When choosing a share dealing account, you'll want to consider the different account types available. A stocks and shares ISA is a great option for beginners, as it allows you to buy shares without paying tax on a certain amount of the profits.

You can also buy shares through your mobile banking app, but if you're planning on dealing shares frequently, it's worth considering a dedicated share dealing account. Some platforms offer a free account option, such as the one with a £0 share dealing fee.

Here are some popular account types to consider:

When choosing a share dealing account, it's essential to compare the costs of buying and selling shares, as well as the fees for keeping shares on your account. The costs can vary significantly between platforms.

Some share dealing platforms charge as little as £3 to buy and sell shares, while others charge up to £8. The account fees can also add up, with some platforms charging £24 per quarter.

A good share dealing platform should also offer the option to deal shares in a tax-efficient ISA, SIPP, or for your children. This can help you save money on taxes and make the most of your investments.

Here are some examples of share dealing fees and account fees from popular platforms:

This table shows that some platforms charge a fixed fee for buying and selling shares, while others charge a percentage of the transaction value. The account fees can also vary, with some platforms charging a monthly fee and others charging a percentage of the account balance.

Overall, it's essential to compare the costs and fees of different share dealing platforms before making a decision. This will help you choose the best platform for your needs and budget.

An ISA is a tax-free account, so any money you make from investments in it is free from tax.

You can pay into ISAs each tax year, but there's a limit on how much you can contribute.

ISAs are more restrictive than Dealing accounts, which come without limits on contributions.

Any gains or income from investing in a Dealing account could be subject to taxes.

You can hold a Dealing account in your own name or jointly with someone else, and some providers even let you open one for a child or a registered pension scheme.

Share dealing accounts can come with a range of fees, so it's essential to understand what you're paying for.

Trading commissions typically range from £7 to £12 per trade, although some brokers offer lower commissions for frequent traders or commission-free trading.

FX fees, on the other hand, are usually around 1% of the trade's value, as seen with platforms like Hargreaves Lansdown and AJ Bell.

Annual custody fees can also vary significantly, with Hargreaves Lansdown charging 0.45% per year, capped at £45 per year.

Some providers, like Freetrade, offer no fees for their basic General Investing Account.

Here's a brief comparison of some share dealing platforms' fees:

This table highlights the varying fees associated with different share dealing platforms, so it's crucial to choose one that suits your needs.

Share dealing accounts can have various fees and charges, making it essential to understand what you're getting into. Trading commissions are a significant cost, ranging from £7 to £12 per trade, although some brokers offer lower rates for frequent traders.

FX fees are another consideration, typically around 1% of the trade's value, especially for international share deals. For instance, Hargreaves Lansdown and AJ Bell charge around 1% FX fee.

Annual custody fees can vary significantly among brokers, with some charging up to 0.45% per year, capped at £45. In contrast, Freetrade has no fees for its basic General Investing Account.

Some providers may charge entry/exit fees, although most do not. Tax is also a consideration, with a 0.5% stamp duty when buying UK shares.

To give you a better idea, here's a summary of the fees associated with some popular share dealing platforms:

These fees can add up quickly, so it's crucial to choose a platform that fits your needs and budget.

Tax on share dealing can be a bit of a minefield, but don't worry, I'm here to break it down for you.

You'll pay tax on your share dealing profits, and there are two types of tax to be aware of: income tax and capital gains tax (CGT). Income tax is payable on dividends and interest from your investments.

The good news is that you can buy shares in a stocks and shares ISA, which means you don't have to pay tax on a certain amount of the profits you make. This is a great option for beginners.

Here are the tax rates to keep in mind:

You'll also pay Stamp Duty on most UK shares, except for AIM shares, which is 0.5% of the transaction value. So, if you buy £2,000 worth of shares, you'll pay £10 in Stamp Duty.

Remember, your tax treatment depends on your personal circumstances, and tax rules can change.

To start investing, you'll need to open a share dealing account with a reputable online broker. This will give you access to a wide range of stocks, bonds, and other investment products.

You can invest as little as £100, making it an accessible option for those new to investing. Research suggests that even small, regular investments can add up over time.

It's essential to understand the risks involved with investing, including the potential for losses. However, with a well-diversified portfolio, you can spread risk and increase your chances of long-term success.

AJ Bell is a low-cost online investing platform that offers a range of investment accounts, including a Stocks & Shares ISA and a Pension account. They have a minimum deposit requirement of £500.

AJ Bell's share dealing account fees are capped at £3.50 a month, and dealing costs are £1.50 for funds and £5 for shares, but drop to £3.50 when there are 10 or more online share deals in the previous month. This makes them a great choice for those who want to deal shares with low costs.

Bestinvest is another option for those who want low-cost advice. They have a minimum deposit requirement of £1 and offer share dealing advice and recommendations. Their share dealing fees are £4.95 per online share trade, and their share dealing account fees are 0.4% up to £250k.

InvestEngine is a great option for those who want to invest in exchange-traded funds (ETFs). They offer a range of ETFs, including over 700 options, and their fees are very low, with no InvestEngine fees at all. This makes them a great choice for those who want to invest in ETFs with low costs.

Here are some key features of AJ Bell, Bestinvest, and InvestEngine:

Overall, these platforms offer a range of options for those who want low-cost advice and investment services.

Dividend income is a type of payment you can receive from shares, bonds, or bond funds. You can expect to receive dividends from shares, but other investments will pay out income as interest.

Dividend income is taxed, and the tax rate depends on your income level. The higher your income, the higher the tax rate on your dividend income.

The tax rates for dividend income are as follows: if you're a basic rate taxpayer, you'll pay 8.75% on dividend income above your allowance. Higher rate taxpayers will pay 33.75%, and additional rate taxpayers will pay 39.35% on dividend income above their allowance.

It's worth noting that some share dealing accounts, like stocks and shares ISAs, are tax efficient and don't require you to pay tax on profits or income from dividends.

Interest income is paid out from various investments, such as bonds or bond funds, as interest.

You'll need to consider your tax-free allowance when it comes to interest income. Taxpayers get £1,000, £500, or no allowance at all, depending on their other income.

The rate of tax on interest above your allowance will depend on your other income. If you're a basic rate taxpayer, you'll pay 20% on the excess, while higher rate taxpayers will pay 40% and additional rate taxpayers will pay 45%.

Here's a breakdown of the tax-free allowances for interest income:

Remember, tax is not deducted automatically from interest income, so you'll need to complete an HMRC self-assessment tax return if it's over your tax-free allowance.

Capital Gains Tax is a tax you pay on profits made from selling investments. You don't pay tax on gains until you sell and 'realise' the gain.

In the UK, you have an annual Capital Gains Tax allowance, which is £12,300 for the 2021-22 tax year. This means you don't pay tax on gains up to this amount.

You can minimise Capital Gains Tax liabilities by buying shares within a Stocks & Shares ISA, where all capital gains are tax-free. This is a great way to save on taxes.

If you sell shares, you'll pay Capital Gains Tax on gains above your annual allowance. The tax rate depends on your total taxable income.

Buying stocks with a broker can be a great way to invest in the stock market. Most brokerages will have access to both major exchanges and OTC markets.

There are different types of brokers to choose from, including full-service brokers and discount brokers. Full-service brokers are traditional stockbrokers who will take the time to get to know you personally and financially.

They can help you develop a long-term financial plan and provide assistance with estate planning, tax advice, retirement planning, budgeting, and other financial needs. Full-service brokers are more expensive than discount brokers.

If you want a set-it-and-forget-it approach to investing but don't have the money or time to hire a full-service broker, you can opt for a robo-advisor. These are algorithmic investment platforms that you can manage through an app or website for a fraction of the cost of a traditional financial advisor.

The minimum deposit to open an account with a broker can vary, but some brokerages, like AJ Bell, require a minimum deposit of £500. Others, like Bestinvest, have a minimum deposit of £1.

Here are some key features to consider when choosing a broker:

Keep in mind that these are just a few examples, and you should do your own research to find the best broker for your needs.

An LEI number is a unique code for your business that's 20 characters long, made up of letters and numbers.

It's a public code that contains information about your company's ownership, making financial transactions completely transparent.

You'll need one to make investments, regardless of the company you use.

The LEI number works globally, so it's not limited to a specific region or country.

If you use a recommended share dealing platform, like InvestEngine, they'll create one for you - but it might not be free, even if the first year is free with them.

You can expect to pay around £70 per year if you arrange it directly yourself.