A Freetrade Review Looking At The Stock And Shares Trading App
Some of my posts may contain affiliate links. This simply means if you purchase something after clicking one of the links I may receive a commission at no extra cost to yourself. Many thanks for the continued support.
What Is Freetrade?
Freetrade was launched in 2018 and is a trading app with which you can buy stocks and shares in a wide variety of companies both here in the UK and abroad in the US and Europe.
Freetrade has around 500,000 customers and it is growing week by week. I signed up around 4 weeks ago and am loving it so far. So on that note here is my Freetrade review.
Freetrades aim is to make buying stocks and shares as easy as possible. You may notice if you read my blog regularly that I don’t mention investing a lot. The reason is I am not a seasoned pro when it comes to investing and have only just recently started.
Freetrade realises that many people would like to invest but are potentially scared away by the bigger companies such as Hargreaves Lansdown and AJ Bell.
So what Freetrade have done is create a simple to use mobile app that is as simple as signing up to Amazon Prime. With a few details added in you have your brand new trading account and away you go.
Freetrade want you to with a couple of clicks be able to buy shares in Apple or Microsoft and with super low fee’s without all the mumbo jumbo that the bigger companies can sometimes overwhelm their customers with.
This is the great thing about Freetrade. Most of the companies you can invest with such as Hargreaves Lansdown are big websites and go into lots of technical jargon that new investors do not fully understand.
This can be quite offputting and Freetrade realised this and created this app to help new investors start to navigate their way through the world of investing and to make it simple for them.
The other great thing with Freetrade is that you can start an account with just £1. You need to have £2 to buy any shares and just as in most normal cases you can purchase parts of some shares instead of having to buy 1 whole one.
How Does Freetrade Work
Freetrade was founded in 2018 by Adam Dodds and Davide Fioranelli who wanted to provide a simple trading app for the everyday user with low to no fees and commissions.
Signing up is a really simple thing to do. All you need to do is enter your name, email address and then connect the app to your bank. Freetrade is authorised and regulated by the Financial Conduct Authority (FCA) so any contact with your bank account is secure and safe as too is any money or shares in your account.
All Freetrade accounts are covered by the Financial Services Compensation Scheme (FSCS) which means you should feel really safe about using Freetrade to buy stocks and shares.
Once you have downloaded the Freetrade app from the Apple store or The Play store you just sign up and put some money in your account.
You can buy shares in companies with just £2. Freetrade is ideal for Uk based investors and has more than 600 assets available for you to trade with. Popular stocks and ETF’s from both the UK and the US are available.
Mutual funds, Cryptocurrencies and options are not available through Freetrade at the moment and probably wont be in the future either.
What Do I Need To Sign Up?
Signing up to Freetrade is really easy to do and can be done in 5 minutes or so.
- National Insurance Number
- Proof of identity
- Proof of your address which can be your driving license or Passport
These are the only things you are going to need so that you can prove who you are and for them to make sure your identity is correct.
What Can I Invest In?
At the time of writing Freetrade have over 4000 stocks to buy and sell comission free. Im obviusoly not going to list them all here.
Some of the most traded shares are Tesla, Gamestop, Vusa (ETF), Apple, Amazon and Microsoft.
For example I currently have shares in Howdens which is a Kitchen supplier to the trade and Tesco the biggest supermarket chain in the UK.
You can invest in pretty much most companies you can think of as well as quite a few ETF’s (Exchange Traded Funds) These are somewhat considered relatively safe as they are a collection of companies. This manages risk, If one company does not do to well one year it wont make much of a difference if your particular ETF is made up of 500 companies.
Is Freetrade Safe?
This is perhaps one of the biggest and most important questions any potential investor would like to know. For a lot of investors the simple fact you can buy multiple stocks and shares just through a couple of clicks on a mobile app could potentially scare people away.
This type of reaction is perfectly normal as you might think that if it is just an app how can it be safe. Well the first thing to remember and one of the most important is that Freetrade is authorised and regulated by the Financial Conduct Authority (FCA).
Not only that but they are also a member of the London Stock Exchange, and as an added layer of protection for your money, All Freetrade accounts are covered by the Financial Services Compensation Scheme (FSCS).
This simply means if Freetrade goes bust or out of business then You will receive up to £85,000 per eligible person. Once your investments start getting towards this sum then it may be time to think about moving your investments or getting further insurance protection.
As Freetrade is protected by both the FSCS and regulated by the FCA this means they cannot do anything untoward without risking their business going bust and you are covered for that too.
500,000 people cannot be wrong. I feel their customer service could be a level above what it is currently but this is surely a work in progress.
Refer A Friend:
I could not write a Freetrade review without mentioning their refer a friend scheme which is a little different from most refer a friend schemes in that you dont get money or discounts etc for referring a friend you get shares!!
All you have to do is to refer a friend through your special link Once your friend has clicked on the link like mine all they have to do is to download the app, sign up and fill in the W-8BEN form which allows you to purchase US stocks and then you both get a free share of a value between £3 and £200.
Below are the full rules and procedures for getting your free share.
How to get your free share 🎁
- Click the referral link from your friend.
- Submit your email.
- Download the Freetrade app from the App Store or Google Play.
- Once you’ve completed the account setup, you’ll be guided through a couple of steps:
- The W-8BEN form to let you invest in US stocks.
- Topping up your account.
Once you’ve topped up and the money has arrived in your account and you have filled out your W-8BEN form, a mystery share will appear in your General Investment Account on your portfolio screen. We’ll grant the share itself in the coming weeks.
Freetrade VS Trading 212
The next best app on the market for trading in stocks and shares is Trading 212 but if you are looking to join there may be an issue. Back at the beginning of the year there was a clash between a Reddit group and some wall street hedge funds.
The clash ended with the Reddit group getting everyone to buy Gamestop shares which pushed the prcie way higher than expected.
At the time many trading apps simple ceased trading temporarily as markets crashed. In fact Trading 212 went a step further and paused any new accounts from being opened which as of today 17/05/2021 is still in place. No one has opened a new account with Trading 212 for over 3 months and this must be hurting their business and increasing the business of Freetrade.
Trading 212 is prefered by many due to more features and better layout however not many of us look like we will get a go on the app this year.
A Freetrade Review Looking At The Stock And Shares Trading App
If you are new to buying stocks or shares and want a quick and convienient method of being able to do this without any fee’s or commissions then Freetrade is for you. Your money is protected and Freetrade is regulated.
If you are looking for a wider spread of shares and looking to perhaps have better features such as DRIP (Dividend Reinvestment Plan) then you would look to go with one of the big brokers such as Hargreaves lansdown.
I decided to do this Freetrade review after investing on the platform myself. Personally I would like to use Trading 212 but we dont have that option at the time of writing. This is a personal opinion though. Freetrade is a perfectly good platform for beginner investors to get a feel for the market and how to benefit from investing.
Freetrade also at the time of writing has a 3.9-4 score on trustpilot and and would potentially be a bit higher if they had 24-7 live chat, hopefully this is something they add at a later date.
Give Freetrade a go by signing up via my referral link above and receive a free share to get you started. What are you waiting for?