How to buy shares in a company

Want to know how to buy shares in the UK? Follow these 4 simple steps and you'll be a share owner.

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There are a few different reasons why you might choose to buy shares — you might think the company is on to something and want to invest early to hopefully sell at a higher price down the line, Dragon’s Den style; you may want to get in on their dividends; or you might just want to have a go at beating the notoriously low interest rates currently on offer. Investing can potentially boost your savings as the value of your investments might rise as the company grows. Here’s how to buy shares, from choosing a broker to figuring out which stock to buy.

What are shares?

When a company lists on a stock exchange, it offers shares, which are little pieces of the company. When you buy shares, you get to vote on some of the company decisions and might be able to receive dividends. The share price of the company moves up and down based on factors that include decisions made by the company, how it performs financially and positive or negative press coverage. This helps to decide on how the company is valued.

How to buy shares

Buying shares in a company is pretty simple — follow these 4 simple steps to get started. We’ve detailed each one in this guide.

  1. Sign up for a share-dealing platform
  2. Sign up for an account
  3. Choose shares to buy
  4. Place an order

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.

Step 1: Sign up for a share-dealing platform

First things first, you’ll need to find a platform to buy and sell shares with. This is where you’ll be able to see all the shares on offer and a little about them, and where you’ll be able to keep track of your investments. Most modern investors use an online share-dealing platform, although you can still find brokers that work face-to-face or over the phone in the UK.

There’s a whole host of share dealing platforms available to choose from, so you can decide on one that has features, fees and account types that suits your confidence, skills and risk profile. There’s no harm in choosing a platform that looks good and is easy to navigate, too.

Ask yourself these questions to help you choose:

  • Are you happy to buy and sell shares on your own? If you’re not, you may be better suited to a robo-advisor.
  • Have you used your ISA allowance? You have a set amount in each tax year that you can save in an individual savings account (ISA) without paying tax on your profits. The allowance for the 2022/2023 tax year is £20,000. If you’ve not used your allowance yet, you might want to choose a provider that lets you use it, such as Freetrade or Trading 212
  • How much research and information do you need? Some providers have a whole host of research that might look daunting but can actually be really helpful. Try to figure out what information you would benefit from when choosing a provider.
  • How much will it cost you? Consider any flat fees, fees when you buy and sell (known as commission), monthly provider fees and foreign exchange fees. Try to find one with free withdrawals and deposits and no inactivity fees.

Use our table below to see some of the features and fees of some popular trading apps.

Share dealing platform comparison

Table: sorted by promoted deals first
Name Product Ratings Finder rating Customer rating Min. initial deposit Price per trade Frequent trader rate Platform fee Offer Link
FREE TRADES
IG Share Dealing
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£250
UK: £8
US: £10
EU: 0.1% (min €10)
UK: £3
US: £0
EU: 0.1% (min €10)
£0
Get 0% commission on US shares when you make 3+ trades in the previous month.

Capital at risk

Platform details
FREE TRADES
eToro Free Stocks
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
$10
£0
N/A
£0

Capital at risk

Platform details
OFFER
Fineco
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£0
UK: £2.95
US: $3.95
EU: €3.95
N/A
£0
Get £500 in trading commissions to use in the first 3 months (T&Cs apply)

Capital at risk

Platform details
Finder Award
OFFER
Freetrade
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£1
£0
-
£0
Receive a free share worth between £3-200. T&Cs apply. The probability is weighted, so more expensive free shares will be rarer. Other charges may apply.

Capital at risk

Platform details
Capital.com
Finder score
★★★★★
★★★★★
Expert analysis
Not yet rated
£20
£0
£0
£0

Capital at risk

Platform details
OFFER
InvestEngine
Finder score
★★★★★
User survey
★★★★★
★★★★★
Expert analysis
★★★★★
User survey
£100
£0
N/A
0% - 0.25%
£20 referral bonus. T&Cs apply. Capital at risk.

Capital at risk

Platform details
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Compare up to 4 providers

Step 2: Sign up for an account

Once you’ve chosen a platform you’ll need to register for an account. You’ll usually need to provide:

  • Personal details. Your name, email, date of birth, address, national insurance number and employment status.
  • ID. Such as your passport or driving license.
  • Payment details. Either a bank transfer, debit card or credit card that you’ll use to fund your share-dealing account.

Finder also has a guide that goes into more detail about how to open a share-dealing account.

You’ll need to have sufficient funds in your online share trading account to cover the cost of what you’ll buy, including the fees that apply. You can usually do this with a bank transfer or direct through the app.

A bit about dealing charges

Most providers charge a fee for buying and selling shares. This is either a fixed amount or a percentage of the value of what you’re buying.

You should also factor in 0.5% of the value of the trade for Stamp Duty Reserve Tax (SDRT). If you’re buying international shares then you might need to pay a foreign exchange fee which is worked out as a percentage of the transaction value.

For a bit of light reading, you can check out our guide to investment fees – which will explain all fees you’re likely to come across.

Step 3: Choose the shares you want to buy

For this part, try to tune out any forums of experienced investors talking about stocks in what seems to be another language — you’ll learn the lingo soon enough, but first, get the hang of how it works.

The great thing is that your life is surrounded by public companies. Start out with ones that you’re really familiar with, like the brand that makes your mobile phone, the cereal that you eat or even the football team you follow. If you’re a gamer, there are lots of gaming stocks; if you’re vegan, you can choose meat or dairy substitute companies and green-fingered gardeners can easily sow seeds in a gardening company.This method of investing means that you’re creating a portfolio of stocks that tends to match your values. Once you’ve got a few in your portfolio, you can look at diversifying by creating a portfolio with plenty of different industries and investment types.

If you’re nervous about diving right in, you could make use of the “watch list” feature on most apps to monitor share performance over time, or you could invest with a virtual portfolio — this is where you use virtual money to see how you’d get on. Some providers with virtual portfolios are Trading 212 or eToro.

Our guide to the best stocks to buy now tracks what’s trending on social media and popular trading platforms, but try to invest in companies you understand. The latest technology stock may look really good, but do you understand how it makes money?

Step 4: Place your order to buy shares

Once you’ve decided which shares to buy, find the share on your platform and hit “Buy” or “Deal now”. It will show you the current share price and let you enter the number of shares or value of the shares that you’d like to buy.

Remember that this isn’t like buying milk from a supermarket – there’s not an endless supply of shares. The stock market you’re buying from is generally the “secondary market”, which means someone’s got to sell their shares for you to buy them. This is usually straightforward and very quick, but you could wait a little longer and the share price could change in this time.

Some share trading platforms offer several different order types which might crop up in the process — we’ve detailed some of the most common ones below with some examples of how they work.

Order typeWhat it doesFor example
AskHow much the seller wants for the stock“Jack, when you sell the cow, don’t take any less than £5 for it”
BidHow much the buyer wants to give you for the stock“Don’t spend any more than a few magical beans on that cow, you hear me?”
Market orderWhen you buy or sell a stock to be carried out as soon as possible at the best available price“Go out and sell the cow, quick! We’ll take £4 for it if it goes today!”
Limit orderWhen you buy or sell a stock but want it to be a specific amount“If we can’t get £5 for the cow, we won’t sell it. We’ll put up an advert for the cow and wait until someone offers £5.”
Stop loss/ stopAn order where you set the price you want to buy or sell at, and once the price is met, it triggers an order. “Everyone’s selling their cow. If the price drops to £4, let’s sell ours before we lose any more money.”

What’s next?

Once you own shares, you can keep an eye on the share performance. You could do this from time-to-time, when earnings reports are released, when dividends are announced or if any of your chosen companies get mentions in the media. Investing is a long-term game, you’d ideally want to invest for several years, but you could choose to sell a specific investment if it isn’t performing as well as you expected.

Check out our guide on how to sell shares to get an idea of how to decide whether you want to sell and what the process looks like.

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.

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