A brokerage account lets you buy and sell shares in publicly listed companies from your phone, laptop or tablet. Previously, you’d have needed a broker in order to access markets, but these days investors trade directly by opening a share trading account with an online share-trading platform. We’ve compiled some of the key information you need to know about trading stocks and shares, the steps involved when choosing a platform, and pulled together a list of UK brokerage accounts for you to easily compare online share-trading accounts.
While “broker” and “share-trading platform” technically have slightly different definitions, they’re pretty much used interchangeably. The share-trading platforms we’ve reviewed on our site are all online brokers, so you can buy, sell and hold shares through them.
The term “investment platform” is a broad term for all platforms that let you invest, so they would also refer to robo-advisors, which are platforms that let you invest in ready-made portfolios.
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.
There are some key things that you ought to know about share trading.
It’s a generous allowance, and it’s unlikely that a casual investor is going to exceed it. Our research found that the average adult stocks and shares ISA has £9,331 in it.
If your investments aren’t in an ISA, you’d have to pay capital gains tax on your profits over an allowance of £12,300. Of course, you might not even make profits that high, but you’d be pretty disappointed if you suddenly made a huge gain and you end up having to pay.
Most major platforms have stocks and shares ISAs, sometimes for an additional fee, but they’re typically free. In our comparison table above you can look at platforms that have stocks and shares ISAs available.
The exact process for opening a share trading account varies depending on the trading platform you select. However, you’ll generally need to complete the following steps when signing up:
Trading shares online offers a secure and easy way to manage your investments. You can place trades at a time and place convenient to you, with the obvious benefits of dividend payments and investing for the future.
There are of course risks attached to trading shares, mainly that the value can go down as well as up, which means you can lose the money you invest. Vitally, with regular investing (that is buying stocks and shares), the value of the stocks can’t go below zero, which means you can’t lose more than you invest. It’s important to make sure you’re aware of the risks before you start trading.
There are instances where you can lose more than you invest, but these are with riskier types of trading like derivatives, which as a beginner, you’d generally want to steer clear of until you’ve got experience in investing and understand how they work.
You’ll need to carefully consider what you need before deciding on the right online trading platform, think about:
Hargreaves Lansdown’s Sophie Lund-Yates shares her advice for new investors looking to join the stock market.
Opening a share trading account is easy, and it’s the first step to investing in stocks and shares and making your savings work a little harder. It’s worth taking the time to read up on the basics, such as how to buy a share, what dividend stocks are and what on earth an exchange traded fund (ETF) is.
If you’re not quite sure that you want to be in control of choosing specific investments just yet, a lot of people start with a robo-advisor. These invest on your behalf with fully managed ready made portfolios for you to choose between. It’s a nice way of getting your feet wet before diving in!
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
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