Freetrade Review 2019

Freetrade is a UK-based fintech startup which offers commission-free trading. The company was founded in 2015 and is regulated by the Financial Conduct Authority (FCA).

Freetrade is considered safe because it is regulated by a top-tier regulator and provides a maximum of £85,000 investor protection.

Recommended for long-term investor preferring low fees and focusing on the UK and US markets.

Freetrade pros and cons

Freetrade offers free stocks and ETFs without inactivity and account fees. The account opening is seamless, fully digital, and really fast. The mobile trading platform is well-designed and user-friendly.

Freetrade offers only stocks and ETFs on the UK and US markets. The research and educational tools cover a very basic chart and some educational articles. Credit/debit card deposit and withdrawal are not possible.

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Freetrade review
Fees 5 stars

Freetrade offers free stocks and ETFs if you place a basic order. There are no account, inactivity, or withdrawal fee as well. Instant orders and extra services, like ISA account, are charged only.

We ranked Freetrade's fee levels as low, average or high based on how they compare to those of all reviewed brokers.

To get things rolling, let's go over some lingo relating to broker fees. What you need to keep an eye on are trading fees, financing rates, and non-trading fees.

• Trading fees occur when you trade. These can be commissions or spreads.
• Financing rates or overnight rates are charged when you hold your leveraged positions for more than a day. A leveraged position means that you borrow money from the broker to trade.
• Non-trading fees include things like withdrawal fees or inactivity fees.

We also compared Freetrade's fees with those of two similar brokers we selected, DEGIRO and Hargreaves Lansdown. This selection is based on factors like products offered, client profile, fee structure, etc.

Let's start with the trading fees.

Trading fees

Freetrade has low trading fees. The stocks and ETFs are free if you place a basic order, which means that the order is placed after the market closed. The instant orders or in other words, the market orders have a £1 per trade fee. In this review, we calculated with the fees for basic orders.

The fee structure is easy to understand and transparent.

Stock fees and ETF fees

Freetrade offers free stock and ETF trading. It's better than the competitors' offers.

Financing rates

Freetrade doesn't offer margin or leveraged trading, i.e. you can't rade with money borrowed from the broker. Therefore, financing rates are not applicable for Freetrade.

Non-trading fees

Freetrade has low non-trading fees. It doesn't charge an inactivity fee.

There is no account fee if you choose the basic account, the ISA account has a £3 monthly fee. Withdrawal fee is charged only if you choose the same-day withdrawal. In this case, a £5 fee is charged.

Freetrade offers only GBP as a base currency, therefore, a currency conversion fee is charged when you trade with USD-denominated stock or ETF. The currency conversion fee is the FX spot rate +/- 0.45%.

Freetrade review
Account opening 5 stars

Freetrade has a great account opening. It is fast, fully digital, and user-friendly. There is no minimum account balance.

Can you open an account?

At the time of the review, Freetrade was available only for UK residents. However, there are plans for expanding Freetrade service in other European countries.

What is the minimum deposit at Freetrade?

The required Freetrade minimum deposit is $0.

Account types

Freetrade offers two account types:

• Basic account - standard account for stock and ETF trading
• Investment ISA account - it's a tax-free account, but it has a £3 monthly fee

How to open your account

Freetrade's account opening is user-friendly and very fast. It took ~10-15 minutes until our account was completed.

The 6 steps of Freetrade account opening:

1. Download the App on your mobile
2. Add your email address where a confirmation link will be sent
3. Give your personal details, like name, date of birth
4. Add your address and nationality
5. Select the account type
6. Freetrade checks your identity automatically

If you fail to Freetrade's digital verification process, you have to upload docs for verifying your ID and residency. Passport, driving license, national ID are accepted for proof ID. Tax bill, utility bill, bank statement, HMRC/DWP correspondence are accepted for proof of address.

Freetrade review
Deposit and withdrawal 3 stars

Freetrade's deposit and withdrawal are free and user-friendly. On the negative side, credit/debit cards are not accepted and you can open only GBP accounts.

Account base currencies

Freetrade offers only GBP as a base currency. It lags behind DEGIRO's, but the same as Hargreaves Lansdown's offer, where also only GBP is provided as a base currency.

Why does this matter? Two things. First, if you fund your account in the same currency as your bank account, you won't be charged a currency conversion fee. Second, if you trade assets in the same currency as your account base currency, you will not have to pay a conversion fee.

A convenient way to save on the currency conversion fees can be to open a multi-currency bank account. Revolut or Transferwise both offer bank accounts in several currencies with great currency exchange rates as well as free or cheap international bank transfers. The account opening only takes a few minutes on your phone.

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Deposit fees and options

Freetrade charges no deposit fees. You can use bank transfer, Google Pay, and Apple Pay as deposit options. Credit and debit cards are not accepted.

A bank transfer can take several business days, while payment with a credit/debit card is instant.

You can only deposit money from accounts which are in your name.

Withdrawal fees and options

Freetrade charges no withdrawal fees if you choose the non-same-day withdrawal. The same-day withdrawals have a £5 fee.

For withdrawal, you can use only bank transfer.

How long does it take to withdraw money from Freetrade? We tested the bank transfer withdrawal and it took 2 business days.

You can only withdraw money to accounts in your name.

How do you withdraw money from Freetrade? You can withdraw money from Freetrade by following these steps:

• Log into the mobile trading platform
• Go to the "Account" tab
• Click on the "Withdraw"
• Add the amount you wish to withdraw
• Initiate the withdrawal

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Freetrade review
Web trading platform

Freetrade doesn't offer web or desktop trading platforms, only a mobile-based trading platform. Offering a web-based application is very common today as it is convenient to use and accessible from all devices. We missed the web platform very much.

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Freetrade review
Mobile trading platform 4 stars

Freetrade offers a great mobile trading platform. It is very user-friendly and well-designed. The search function works well too. However, there are only two order types and the price alerts are missing.

Freetrade offers an in-house developed mobile trading platform. As the mobile devices and the UX became more popular in the last few years, Freetrade does a great job offering a mobile trading platform with superb UX.

The mobile trading platform is available in English.

Look and feel

Freetrade mobile trading platform is user-friendly and well-designed. You'll get familiar with the platform within a few seconds.

Login and security

You can log into Freetrade's platform by typing a four digits password or using the TouchID. 

Search functions

The search functions are good. You can search by typing an asset's name or ticker.

We liked the categorization as well. You can filter for UK or US assets and you can also select the asset class, like stock ETF or bond ETF.

Placing orders

Freetrade offers only two order types.

• Basic or after market order - the orders placed after the market closed and no fee is charged
• Instant or market order - the orders placed immediately, but it has a £1 per trade fee

You can't use order time limits, like Good' till canceled.

If you are not familiar with the order types, read this overview.

Alerts and notifications

You can't set alerts and notifications on the Freetrade mobile platform. It would be a great feature.

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Freetrade review
Desktop trading platform

Freetrade does not offer a desktop trading platform.

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Freetrade review
Markets and products 1 stars

Freetrade has limited product portfolio. You can trade only with stocks and ETFs. It lacks other popular asset classes, like mutual funds, bonds, options, etc.

Freetrade's offers only stocks and ETFs, but within these asset classes, the competitors perform much better.

Stock and ETF

At the time of the review, you could trade only ~350 stocks and ~40 ETFs from the LSE, NYSE, and NASDAQ stock exchanges. DEGIRO and Hargreaves Lansdown have much wider product offers.

Freetrade continuously adds new stocks and ETFs. It's great that these new products are selected based on Freetrade's community preferences.

Freetrade review
Research 1 stars

The research tools are very basic and limited at Freetrade. There are no analyst recommendations, fundamental data, and more sophisticated charting tools. There are only a basic chart and a few important information, like the highest or lowest price on the current day.

Trading ideas

Freetrade does not provide trading ideas.

Fundamental data

Freetrade does not offer fundamental data.

Charting

Freetrade has poor charting tools. There are no technical indicators and other charting tools, like a trendline editor. 

News feed

Freetrade doesn't offer news.

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Freetrade review
Customer service 2 stars

Freetrade offers only a live chat, provided by Intercom. You can't contact them via phone or email. The 24/7 availability is missing as well.

You can contact Freetrade via:

• live chat

The live chat works well. We got fast answers, within a few minutes. The answers were helpful and relevant.

We missed the phone, email, and 24/7 availability.

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Freetrade review
Education 1 stars

Freetrade's educational tools can be improved. Demo accounts, educational videos, webinars are not provided. As a plus, you can find useful and quality educational articles on Freetrade blog.

On Freetrade's blog, you'll find articles about Freetrade's plans, team, but there are educational articles as well. If you click on "Investing deep dives", you can read articles on various topics, from startup valuation to ETF 101.

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Freetrade review
Safety

Freetrade is regulated by the top-tier FCA. There is also a high, £85,000 investor protection amount. On the negative side, Freetrade is not listed on any stock exchange and does not disclose its financial information.

Is Freetrade regulated? Yes, it is regulated by the Financial Conduct Authority (FCA).

Is Freetrade safe? To be certain, it is best to check two things: how you are protected if something goes wrong and what the background of the broker is.

How you are protected

This is important for you because the investor protection amount and the regulator differ from entity to entity. With Freetrade this is not an issue though as all customers are covered by Freetrade Limited and the UK investor protection scheme, called FSCS.

The FSCS investor protection scheme protects against the loss of cash and securities in case the broker goes bust. The limit of FSCS protection is £85,000. This amount is substantially higher than the amount most investor protection schemes provide.

Background

Freetrade is a young company established in 2015. The longer the track record of a broker, the more proof we have that it has successfully survived previous financial crises.

Being regulated by a top-tier regulator and offering a high amount of investor protection are all great signs for Freetrade's safety.

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Freetrade review
Bottom line

Freetrade's fees are great. Stocks and ETFs are free, and there is no inactivity fee. The account opening is easy, fully digital, and fast. You can use an awesome and user-friendly mobile trading platform.

Freetrade has some drawbacks though. The product portfolio covers only stocks and ETFs from the US and UK markets. There are only a few research and educational tools. You can't use credit/debit cards for money transferring. 

If you want to trade with UK and US stocks or ETFs for free and prefer an easy-to-use platform, Freetrade is the best choice. 

Freetrade main features and highlights

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