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How to open a UK brokerage trading account
Find out how to open a share trading account and the steps for choosing your account to start investing in UK and international markets.
A trading account sometimes goes by other names like a “share dealing” or “brokerage” account, but it all means the same thing. It’s a platform that lets you buy and sell company shares (stocks) from your phone, computer or tablet.
Opening a trading account isn’t as complex as you might think. We’ll detail the steps involved when joining a platform, and tips to help you find the right provider.
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Broker, share-trading platform or investment platform: What's the difference?
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 – all right at your fingertips.
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.
What do I need to know about online share trading?
There are some key things that you ought to know about share trading.
- The difference between shares and funds. Shares are pieces of companies, while funds are a collection of shares or investments.
- Think long term. Try to give yourself at least 5 years. This allows the market to have it’s ups and downs and helps to mitigate investment risk.
- Diversify. We go on about diversification like a broken record. You need to make sure you don’t put all of your eggs in one basket, relying on just one company. Index funds and exchange-traded funds (ETFs) can help you diversify more easily.
- Consider an ISA. A stocks and shares ISA is a tax wrapper for your investments, allowing you to invest up to £20,000 per year and minimise potential tax (in the 2023/2024 tax year).
- Will you receive dividends? Dividends are another way of making money from investing. These payments are made by companies to reward shareholders for owning a piece of the firm.
Why you should consider opening a stocks and shares ISA for trading
A stocks and shares ISA is a tax wrapper for investments. This means it’s a tax-efficient account that shields your investments from UK dividend or capital gains tax. You can invest up to your full £20,000 ISA allowance each tax year. This allowance could change in future so it’s worth making the most of.
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 a yearly allowance of £6,000. Or, pay dividend tax on any income over £1,000. Of course, you might not even make profits that high each year, but this will become more important as your portfolio grows over the years.
To find out about all the top options, check out our guide covering the best stocks and shares ISAs available to UK investors.
How to open a share trading account in the UK
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:
- Choose a broker. Research your options to find the online provider that offers all the features you want at an affordable price. Some providers also offer a choice of share trading platforms, for example a free web-based platform for casual investors and a more complicated software package with a monthly subscription fee for experienced traders.
- Choose your membership level. Some providers offer a choice of membership tiers, each with a different level of features and a different ongoing fee.
- Provide your details. You’ll need to provide your full name and a valid form of photo ID, as well as your email address, phone number and national insurance number.
- Link your bank account. You’ll need to supply details of the bank account which will be used to pay for your trades and you may be required to deposit a minimum amount.
- Submit your application. Your application to open a share trading account will usually be processed within 1-2 business days.
- Open your account and start trading. Once your application has been approved you can login to your account and start trading.
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Go to siteCapital at riskWhy trade shares online?
Trading shares online offers a secure and simple way to manage your investments. You can place trades at a time and place convenient to you, and keep tabs on your portfolio with ease.
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 some or all of the money you invest. Crucially, with regular investing (buying stocks and shares), the value of a stock can’t go below zero, so 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 more experience in investing and understand how they work.
How do I choose an online share-dealing platform?
You’ll need to carefully consider what you need before deciding on the right online trading platform, think about:
- Your knowledge and experience. Some online trading platforms are suited to beginners while others have features geared towards experienced traders, such as advanced charting tools, speedy execution of trades and live market data.
- Market access. Some share dealing platforms only provide access to companies listed on specific stock exchanges, like the London Stock Exchange (LSE), or specific countries, like US stocks. Others will allow you to place trades on a bunch of international markets.
- The feesThere are 2 main costs you need to consider when choosing a share trading platform: the commissions and the platform fee. The commission fee applies each time you place a trade (and is sometimes free). Platform fees vary depending on the provider and the account features you select. It is usually a percentage of your holdings or a flat fee, regardless of portfolio size.
- Tools and resources From educational tutorials to research and investment inspiration, check out what a platform offers to help you make informed trading decisions.
- Customer service. If you ever have a problem or need help, check to make sure you will be able to access prompt and helpful customer support.
Bottom line
Opening a share trading account can be straightforward, and it’s the first step to investing in stocks and shares to make your savings work a little harder. It’s worth taking the time to read up on the basics, such as how to buy shares, how to invest in dividend stocks, and the basics of beginner-friendly investments like exchange-traded funds (ETFs).
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. It’s a nice way of getting your feet wet if you’re not quite ready to open a share trading account and pick your own stocks.
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I am looking to buy shares in Carnival Cruise Line to get benefits while cruising. What is the cheapest and simplest way to buy shares?
Hi Roger. We have a page about Carnival shares, with information about the latest developments, the share price, platforms selling the stock, and fees. Your capital is at risk when buying any shares, of course.
If I want to invest with a broker that is not from my bank, can I do it from my bank account or I would have to transfer my money? How could he get access to my account?
Hi Lucas,
Thanks for getting in touch with Finder. I hope all is well with you. :)
Yes, it is possible that you use your own bank account to invest with a broker that is not from your existing bank. However, this would depend on the broker that you choose. For this reason, it would be a good idea to directly as your broker and check your available options.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua