Freetrade vs Trading 212
Last Updated: March 30, 2023
Freetrade and Trading 212 are the cheapest share dealing platforms in the UK. They offer commission-free trading of a broad selection of assets and a user-friendly interface for seamless trade execution.
But, how do they differ, and more importantly, which is better?
If you, too, are looking for these answers, this Freetrade vs Trading 212 comparison is worth checking out. We’ll discuss the differences and other similarities between these commission-free trading platforms, and hopefully, you’ll know which one is more suitable for you by the time you finish reading this article.
Freetrade and Trading 212 are excellent choices for commission-free share dealing. However, these platforms are tailored to different investor types. So, which one you’ll choose will primarily depend on your experience and what you hope to achieve when dipping your toes in investing.
But, before we go into details, take a look at this table that illustrates a brief comparison between Freetrade and Trading 212:
|Available Products||ISA, GIA, SIPP, Freetrade Plus||Trading 212 CFD, Trading 212 Invest, ISAs, Trading 212 Pro|
|Available Markets||Shares (including fractional shares), ETFs, investment trusts||Shares, CFDs, Investment trusts|
|Minimum Investment||£1||£1 or £10 for CFDs|
|Leverage||No||Yes, up to 1:500|
|Available Platforms||Mobile app only||Web-based platform and a trading app|
Freetrade is a simple investment platform. You can use it to trade ETFs, investment trusts, and over 6,000 US, UK, and European shares. However, it doesn’t offer exposure to CFDs which is a dealbreaker for many traders chasing profits.
On the other hand, dealing on Trading 212 will open new doors to CFDs, and you’ll even be able to trade with leverage of up to 1:500. Of course, this benefit is for experienced traders only, as the standard leverage for retail accounts is 1:30.
Although using leverage is risky, it’s a valuable tool for experienced traders. Moreover, trading with leverage can be lucrative, and users want to try their luck with this complex financial instrument.
So, if you’re one of those people who prefer to trade CFDs, you won’t find what you’re looking for at Freetrade. Trading 212, however, offers not only CFDs but so much more. For example, even if you don’t intend to use leverage, Trading 212 has roughly 10,000 stocks and ETFs in its arsenal, making portfolio diversification drastically easier.
Product selection is one of the main differences between Freetrade and Trading 212. As a result, you might prefer one over the other solely based on your investment goals.
For example, Freetrade is a SIPP and ISA service provider, ideal for those who want to enjoy tax benefits or save up for the future. Both account types offer attractive tax benefits, with Freetrade ISA being more flexible regarding allowances.
Besides that, Freetrade offers two additional subscriptions, such as a Freetrade GIA and Freetrade Plus. You can invest in Freetrade’s General investment Account free of charge. At the same time, a Freetrade Plus subscription allows you to earn interest on your investments of up to £4,000.
Still, if you want to invest in a tax-efficient ISA, Trading 212 could be a great option, too. That is because Trading 212 ISA offers the same tax benefits as Freetrade’s; the only difference is that Freetrade charges a £3 monthly subscription for this account type.
Other Trading 212 investing products are Trading 212 Invest, CFD, and Pro. As mentioned earlier, Trading 212 supports commission-free CFD trading, offering leverage of up to 1:30 on its CFD accounts. However, you can always upgrade to a Trading 212 Pro account and use more leverage to increase the potential return.
Freetrade and Trading 212 fee structure is very similar. However, the key difference between the two is that Freetrade charges a platform fee for ISA accounts, while Trading 212 doesn’t. In addition, these online brokers don’t charge withdrawal fees.
Furthermore, although they offer free deposits, this service is complimentary at Trading 212 until you have transferred £2,000 into your account through Google/Apple Pay or cards.
Here’s a comparison of other Freetrade and Trading 212 charges:
|Leaving an Open Position||/||Free|
|Account Transfer Fees||Free||/|
Account Setup and Withdrawals
Suppose you want to start your trading journey. In that case, you probably want to open an account with a reputable service provider and begin trading as soon as possible. If this is how you would describe yourself, Trading 212 is currently not an option.
Availability is the main reason we favour Freetrade over Trading 212. Due to the rise in demand, Trading 212 can’t process new accounts, making some users wait up to a few months to access the platform. The account setup is simple, but at the moment of writing, no one can tell for sure when you’d be able to trade with Trading 212.
On the other hand, You can create a Freetrade account in under ten minutes. The registration process consists of only a few steps; as soon as you provide essential information and proof of identity, you’ll be good to go.
Of course, if you want to trade with CFDs, Trading 212 is worth the wait. However, if you intend to diversify your portfolio with shares and ETFs, Freetrade is a better broker for you.
Withdrawals and Deposits
As stated earlier, both Freetrade and Trading 212 withdrawals are free. So, let’s discuss how much money you can transfer to your bank account when dealing on these platforms.
The Trading 212 minimum withdrawal for ISA and Invest accounts is £1. Conversely, you can transfer less than £10 if you hold a CFD account.
Similarly to Trading 212, Freetrade’s minimum withdrawal is £1. Both service providers take a few days to process the fund transfer, especially if you send your withdrawals to your bank account. And, when it comes to deposits, these share dealing brokers allow you to transfer as little as you wish to your trading account.
Freetrade is a mobile-only platform, meaning the developers have put a lot of effort into building an interface that provides a seamless trade execution. You can analyse trading charts, transfer funds, place trades with the app, and even learn how to become a better investor.
However, the Trading 212 app also has a clean user interface and is an excellent choice for trading on the go. Its most remarkable features are price alerts, charts and watch lists. Still, the Freetrade app is simpler and has a better user interface, meaning you’ll most likely prefer Freetrade over Trading 212 if you’re a beginner.
These online brokers are regulated by the UK’s top-tier Financial Conduct Authority (FCA). However, as Freetrade is registered in the UK only, it doesn’t need additional management from regulators in other countries.
Trading 212 is also regulated by the FCA, but that’s not the only regulator that supervises it. For example, Bulgaria’s Financial Services Commission and Cyprus Securities and Exchange Commission also monitor and regulate Trading 212.
Generally, Trading 212 has better customer support than Freetrade. Although the platform has been flooded with new users, its agents are quick to respond to your chat request and address all your questions or concerns.
Still, Freetrade Plus members have access to priority customer support, so if you intend to invest in this subscription, you’ll be able to contact customer support representatives via in-app chat.
Trading 212 has a more extensive user base, so it naturally has more user reviews on platforms such as Trustpilot or GooglePlay. It has a 4.4/5 stars rating on Trustpilot, making it one of the most praised trading platforms in the UK.
Similarly, Freetrade’s rating on Trustpilot is 4.3/5 stars. So far, both platforms have received lots of praise from reviewers, but Trading 212 has received more complaints, as its users have to wait up to a few months to start using the platform.
As you can see, Freetrade and Trading 212 are excellent share dealing platforms for experienced and first-time traders alike. In addition, they offer commission-free trading you can benefit from when diversifying your portfolio. Still, it’s evident that Freetrade is a better platform, as the Trading 212 waiting period can last a few months.
Still, I recommend checking both platforms out and seeing for yourself which is better. After all, these platforms differ in many ways so you may use them both to your advantage.
Due to the rise in demand, Trading 212 doesn’t allow users to open new accounts instantly. Therefore, Freetrade is a better platform if you’re looking to open an account and trade immediately.
Freetrade is a trustworthy service provider with several regulatory bodies to back it up. So if you decide to invest with Freetrade, you can rest assured your money and personal information is safe.
Trading 212 is an excellent trading platform that has received a lot of praise from the public. But, although the platform is a good choice for those who want to trade with stocks and CFDs, you should wait until it becomes available to give it a try.