Investing in US stocks from the UK

Buying US stocks can be easy – find out how you can choose the best investment platform to trade US stocks.

Learn how to invest in US stocks Step by step instructions
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Our experts keep on top of the markets to bring you the latest on what's shaking up stock prices.

21 December 2023: After a solid December so far, the S&P 500 index stumbled and was down by around 1.47% yesterday with investors taking profits after the recent rally.

Everything is bigger across the pond, and US stocks make up close to 60% of the global stock market. Buying US shares is a fantastic chance to diversify your portfolio and invest in some of the world’s biggest and best companies. But, if you’re in the UK, how do you invest in US stocks?

How to invest in US stocks

  1. Choose a share dealing platform. If you’re a beginner, our table below can help you choose.
  2. Open your account. You’ll need your ID, bank details and national insurance number when opening a share dealing account.
  3. Complete your W-8BEN. You’ll need to fill out a W-8BEN form to confirm you’re not a US tax resident. Most platforms and apps let you do this online.
  4. Confirm your payment details. You’ll need to fund your account with a bank transfer, debit card or credit card.
  5. Find the US stocks you want to buy. Search using the stock code or company name.
  6. Buy US stocks. Simply click β€œBuy” to finish your order. Unless you’ve deposited dollars, you’ll likely have to pay a small foreign exchange (FX) fee.

You can invest in US stocks using a number of trading apps. Each will give you different levels of access to the US stock market, along with various trading options and features.

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  • Commission-free stock trades
  • Receive dividend payments
  • Invest in fractional shares

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Personalised market updates
  • Commission-free trading
  • Invest in fractional shares
  • Over 5,400 stocks & ETFs

Best for US shares

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Try Plus free for 3 months
  • 0% commission on trades
  • Choose from 3000+ stocks
  • Real-time live pricing

Can I trade US stocks in the UK?

Yes, you just need an investing account that lets you trade US stocks. We’ve listed some of these below with links to our reviews – check these out to find one that suits you.

There are some extra things you need to take into consideration when investing in US stocks, including the fees involved and whether you need to fill out a W-8BEN form.

How much does it cost to invest in US stocks?

There are 2 key fees you need to consider when trading US stocks:

  1. Commissions. The commission is the cost that a platform charges you to make a trade. Some platforms have no commissions.
  2. Foreign exchange (FX) fees. The FX fee is the cost the provider charges you to change your money to US dollars. This is usually shown as a percentage and most are under 1%.

There may be other fees you need to consider, but these are the primary ones. Our table below of UK brokers that let you trade US stocks shows the commission fee for a US trade and the FX fee for key providers.

Why invest in US stocks?

Over the last decade, leading US stock indices (like the S&P 500 index and the Nasdaq 100 have given investors much higher returns compared to those in the UK (like the FTSE 100). Mostly, because of the rise of tech stocks – thanks Zuckerberg, Musk, and Bezos. Investors that were only invested in UK or European stocks may have missed out on these big, tech-driven gains.

Of course, past performance is no guarantee of future results. You may not make huge gains by investing in these stocks today. But holding US stocks means adding a layer of international diversification – owning pieces of the most recognisable companies in the world.

A couple of decades ago, it was difficult (and costly) to invest in US stocks. These days, many of the best trading apps and platforms offer low-cost access to international markets – including the US stock market. Did someone say yeehaw?

How do US stocks perform?

The best way to understand past performance of US stocks is to take a look at the 2 major US stock exchanges: the Nasdaq and the NYSE.

What to keep in mind when trading US stocks

  • Commission costs. Compare the fee each company charges every time you place a trade on US stocks. Be aware that this may be different to fees for UK stocks.
  • Foreign exchange (FX) rate. FX rates vary between platforms, and this will partly be used to offset low broker fees. Make sure to check these, it’s usually shown as a percentage.
  • Availability of market data. Check how up-to-date the market data offered by each platform is – being able to make trades based on current information (and ideally live prices) is critical.
  • Trading types and hours. Are trading order types available to let you take advantage of market fluctuations? Can you trade outside US stock market hours?
  • W-8BEN form. You need to fill out a W-8BEN form when trading US stocks to determine your tax status. Some brokers let you do this electronically while a small few ask you to return one by mail.

Advantages of investing in US stocks

Here are some of the key benefits as an investor:

  • Access international investments. Trading US stocks allows you the freedom to take advantage of investment opportunities that are not available in the UK, helping you to diversify.
  • Increasingly more affordable. As a growing number of online share trading platforms compete, commission fees are becoming cheaper.
  • Historical growth. The US stock market has seen more growth than the rest of the world in the past 100 years.
  • Exciting companies. The US stock market is home to some of the most exciting and innovative companies the world has ever seen.

Risks of investing in US shares

There are also some potential downsides to think about:

  • Commission fees. You’ll need to contend with potentially higher commissions when you buy US stocks or other international shares.
  • Exchange rates. The USD-GBP rate fluctuates frequently which might negatively impact your investment.
  • Additional fees. International trades are sometimes subject to fees that UK-only trades are not, such as foreign exchange (FX) fees.
  • Valuations. For a long time now, US stocks have been trading at high valuations compared to companies in other countries.
  • Platforms. Not all UK share trading accounts will let you access US stock exchanges.

Pros and cons of investing in US shares

Pros

  • Invest in some of the best and biggest stocks in the world
  • Cheaper than ever to buy US shares
  • US stocks have driven most global growth

Cons

  • Exchange rate risks
  • Sometimes extra fees when buying US shares
  • Many US stocks trade at high valuations

Bottom line

Choosing to invest in US stocks can be a great way to get access to rising tech stocks and other prominent American companies to diversify your portfolio. It’s a popular market for investors, but if you want to buy US shares from the UK, you need to make sure you’re aware of all the costs (like commissions and FX fees).

It can be worth working out how much it will cost before buying US stocks. And crucially, you need to make sure you choose a platform or app that lets you access US stock exchanges. Diversifying internationally is a great strategy, just make sure that any US stocks you pick align with your goals and risk appetite.

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.

UK brokers for US stocks

Table: sorted by promoted deals first
Name Product Finder score Min. initial deposit Price per trade Frequent trader rate Platform fees Offer Link
Finder Award
OFFER
CMC Invest share dealing account
Finder score
β˜…β˜…β˜…β˜…β˜…
User reviews
β˜…β˜…β˜…β˜…β˜…
4.4
β˜…β˜…β˜…β˜…β˜…
β˜…β˜…β˜…β˜…β˜…
User reviews
Β£0
Β£0
N/A
Β£0
Finder Award
FREE TRADES
eToro Free Stocks
Finder score
β˜…β˜…β˜…β˜…β˜…
User survey
β˜…β˜…β˜…β˜…β˜…
4.4
β˜…β˜…β˜…β˜…β˜…
β˜…β˜…β˜…β˜…β˜…
User survey
$100
Β£0 on stocks
N/A
Β£0
Finder Award
InvestEngine
Finder score
β˜…β˜…β˜…β˜…β˜…
User survey
β˜…β˜…β˜…β˜…β˜…
4.3
β˜…β˜…β˜…β˜…β˜…
β˜…β˜…β˜…β˜…β˜…
User survey
Β£100
Β£0
N/A
0% - 0.25%
XTB
Finder score
β˜…β˜…β˜…β˜…β˜…
User survey
β˜…β˜…β˜…β˜…β˜…
4.3
β˜…β˜…β˜…β˜…β˜…
β˜…β˜…β˜…β˜…β˜…
User survey
Β£0
Β£0
Β£0
Β£0
Halifax share dealing account
Finder score
β˜…β˜…β˜…β˜…β˜…
4.2
β˜…β˜…β˜…β˜…β˜…
Not yet rated
Β£20
Β£9.50
Β£2
Β£36 per year
Finder Award
Hargreaves Lansdown Fund and Share Account
Finder score
β˜…β˜…β˜…β˜…β˜…
User survey
β˜…β˜…β˜…β˜…β˜…
4.2
β˜…β˜…β˜…β˜…β˜…
β˜…β˜…β˜…β˜…β˜…
User survey
Β£1
Β£11.95
Β£5.95
Β£0
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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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2 Responses

    Default Gravatar
    MannieMarch 20, 2020

    Why is it so difficult to find a US broker where I can buy shares. I don’t want EFT’s or CFD’s I want to buy a specific share and hold the share certificate.

    Help!!!

      AvatarFinder
      TomMarch 20, 2020Finder

      Hi Mannie,

      Thanks for your question. These days, there are a number of online trading apps and brokers that let you buy US shares directly. If you’re looking for a low-cost way to invest in the US stock market, you may want to consider apps like Robinhood, Freetrade or Stake, all which offer the ability to buy US stocks directly.

      I hope this helps, but please let me know if you have any other questions.

      Regards,

      Tom

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