In today’s world of uncertainties, there is a constant need to have sufficient funds to cater to basic and complex necessities. However, depending on work income or tax allowances is not always enough. Many have found that investing in investment platforms goes a long way to boosting their overall earnings in the long term. This article discusses the UK best investment apps to choose from.
Whether you’re a beginner investor, a UK investor who prefers the mobile layout for financial investment management, or a busy individual seeking an all-in-one platform to manage your portfolios, there’s a platform designed just for you.
How do investment apps work in the UK?
Investment apps (or robo-advisors) are platforms where you can deposit your funds for them to accrue value over time. These apps make investments easier for users by offering a selection of investment products to choose from. These financial instruments include stocks, crypto, exchange-traded funds (ETFs), futures, bonds, mutual funds, options, real estate, and more.
While creating an account, the investment app may ask questions to ascertain the user’s investment and risk preferences. This way, the platform can provide relevant materials and investment options that best fit the investors’ choices.
A well-rounded investment app should offer a variety of investment options, research and analysis tools, educational materials, and an intuitive interface.
The UK government offers tax allowances, reducing the amount of income tax each citizen must pay. The tax structure benefits those investing their money in investment platforms. For instance, you can deposit up to £20,000 yearly into an Individual Savings Account (ISA), a tax-efficient way to invest money in the UK. The interesting part is that any interest or profit from such investment options is tax-free.
Most UK investment trading apps feature ISAs to attract as many local investors as possible.
Are investment apps legal in the United Kingdom?
Yes, investment apps are legal in the UK. Before an investment company operates in the UK, it must be registered under the UK’s Financial Conduct Authority (FCA). Interestingly, all investment platforms discussed in this article have been registered with the financial agency before commencing operations in the country.
Choosing FCA-registered investment trading apps provides investors with peace of mind, as these platforms are required to comply with the UK’s stringent regulatory guidelines. For instance, these investment platforms must segregate their assets from those of their investors. Also, they must implement measures to safeguard clients’ funds. It is also worth noting that only regulated investment platforms can become a part of the Financial Services Compensation Scheme (FSCS). This is an independent authority that offers compensation to affected users in the eventuality of an investment firm going bankrupt.
Since investment apps are registered under the FCA, users must undergo the Know-Your-Customer (KYC) verification before accessing services on the platform.
Top 7 investing apps to use in the UK
Here are the top seven investing apps to use in the UK:
- eToro
- Nutmeg
- Trading 212
- Freetrade
- Moneybox
- Dodl
- Lightyear
eToro
eToro is considered one of the best investing platforms due to its diverse range of services. It allows users to invest in stocks, crypto, ETFs, options trading, futures trading, and more. The investment platform also enables users to earn up to 4.3% interest annually. To ease users’ access to their investments, eToro offers a mobile app compatible with Android and iOS devices.
Aiming to seamlessly onboard users across the UK, eToro allows users to make withdrawals and deposits using GBP. The investment platform also features an education section to keep readers informed while they access their preferred investment vehicle.
Minimum investment: £37.35.
Fees: Although eToro implements a zero-fee policy for most of its services, it charges a 2% fee for its Crypto transfers.
Options/tiers of services: eToro offers a UK Club tier that outlines the applicable fees for its services. They are Green (Non-club & Silver-Platinum Tiers) and Black (Platinum+ & Diamond Tiers).
FCA-regulation: eToro is regulated by the FCA.
User-friendliness: The platform is user-friendly across its online and mobile interfaces.
Best for Multi-Asset Selections for Investors
Nutmeg
Nutmeg is an investment platform owned by the multinational investment banking firm JPMorgan Chase & Co. The company prioritizes the creation of tax-efficient investment portfolios. As a result, most of its five key products are themed around ISAs. These products include stocks and pensions. It also features ETFs.
In compliance with regulatory guidelines, the investment company has selected British bank Barclays and financial firm State Street to hold clients’ assets. The firm offers a free consultation with one of its financial experts to help investors make informed financial decisions.
Minimum investment: It ranges between £100 and £10,000.
Fees: Nutmeg offers six investment styles with varying fee structures, depending on the amount an investor deposits. Assuming that a user deposits £10,000, the annual fee structure will be:
- Fully Managed: £97 (0.97%)
- Thematic Investing: £101 (1.01%)
- Smart Alpha: £109 (1.09%)
- Socially Responsible Investing: £101 (1.01%)
- Fixed Allocation: £62 (0.62%)
- Income Investing: £117 (1.17%)
Please note that the fee structure does not take into account the size of the return.
Options/tiers of services: Nutmeg users can invest in any of the five investment products:
- Personal Pension.
- Stocks and Shares ISA
- Junior ISA
- Lifetime ISA
- General Investment Account
FCA-regulation: It is regulated by the FCA.
User-friendliness: Nutmeg’s online platform and mobile apps are widely recognized for their user-friendly design.
Best for a Transparent and Predefined Fee Structure for Investments
Trading 212
Trading 212 is a commission-free platform that enables you to invest from your phone. The UK-based investment app boasts £25 billion worth of clients’ assets from over 4.5 million clients. The platform enables users to earn up to 4.35% Annual Equivalent Rate (AER) on their GBP investments.
The platform enables investment in over 13,000 stocks and ETFs. Users can also invest in Stocks and Shares ISA for tax-free investment. The investment app also features contracts for difference (CFDs), fractional shares, forex, share lending, and more to maximize investors’ earning potential.
Minimum investment: £1.
Fees: Its services are generally free. However, a 0.15% fee applies for trading financial instruments denominated in currencies other than the one for your account.
Options/tiers of services: Trading212 has no tiers of services.
FCA-regulation: It is registered under the UK’s FCA.
User-friendliness: The platform’s web and mobile interfaces are user-friendly.
Best for Commission-Free Investments in the UK
Freetrade
As its name implies, Freetrade is one of the investment trading apps that offers users commission-free services. It boasts over 1.6 million users within the UK and beyond.
The platform provides three flagship products: Stock and Shares ISA, Personal Pension, and General Investment Account. Freetrade features over 6,200 stocks and ETFs to maximize investors’ earning potential. It also facilitates fractional U.S. shares. Users can earn 1% AER on up to £1,000 uninvested cash. These services are available across its mobile and web interfaces.
Minimum investment: £2.
Fees: Although most of Freetrade’s services are free, its FX fees are tiered based on the service level. They are:
- Basic: 0.99%.
- Standard: 0.59%.
- Plus: 0.39%.
Options/tiers of services: Freetrade has three plans for its users. They are:
- Basic: £0.
- Standard: £4.99 per month.
- Plus: £9.99 per month.
FCA-regulation: Freetrade is regulated by the FCA.
User-friendliness: The investment platform is user-friendly.
Best for Individuals Seeking Affordable Tiered Investment Plans
Moneybox
Moneybox is an investment platform that serves over a million users. The investment app offers two options for investing: Starting Options and Custom Allocations. Starting Options is designed for new investors, while Custom Allocations allows users to diversify their investments into various financial instruments.
Although focused on Investing, Moneybox offers a dedicated “Saving” section for users who want to save their assets. It also has a learning section to keep users informed about various investment packages.
Minimum investment: £1.
Fees: Here are the applicable fees within the Moneybox interface:
- Monthly Subscription Fee: £1.
- Platform Fee: 0.45%.
- Currency conversion fee: 0.45%.
Services, such as withdrawals and US stocks trading, are free.
Options/tiers of services: Moneybox’s Starting Options have three investment options:
- Cautious: Targets low-risk investments with moderate growth.
- Balanced: Aims for higher growth through medium-risk investments.
- Adventurous: Designed for high-risk investments to maximize earning possibilities.
FCA-regulation: The FCA regulates the investment app.
User-friendliness: Moneybox’s interface is user-friendly.
Best for Beginners Seeking Simple Investment Options
Dodl
Dodl is another platform that ranks among the best investment trading apps. It is open solely to UK residents. The investment app features various products, including the Investment ISA, Lifetime ISA, Pension, and General investment accounts. The platform offers up to 4.32% AER interest on cash. For services that Dodl can’t help with, such as creating investments for children, its parent company, AJ Bell, will offer them.
Minimum investment: £25.
Fees: The platform implements a 0.15% account charge on trades.
Options/tiers of services: Dodl does not offer tiered services. However, it has three investment choices:
- AJ Bell funds.
- Themed Investments.
- Shares.
FCA-regulation: The platform is regulated by the FCA.
User-friendliness: The investment app’s web and mobile interface is user-friendly.
Best for Cost-Conscious Investors Seeking Apps With Low Fees
Lightyear
Lightyear is an investment app that enables individuals and businesses to earn from various financial instruments. It has served over 3,000 businesses across Europe. It features over 4,000 U.S. stocks from stock exchanges like Nasdaq and NYSE. It also offers fractional shares.
The investment platform offers an annual percentage yield (APY) of up to 4.34% on GBP deposits. These yields are generated when Lightyear invests them into the money market funds of the trillion-dollar investment management firm BlackRock.
Minimum investment: There is no minimum investment requirement.
Fees: The platform charges a flat 0.35% conversion fee. It also charges a 0.1% fee for US stocks and a £1 charge per order when trading UK stocks.
Options/tiers of services: Lightyear has no tiered service.
FCA-regulation: It is regulated by the UK’s FCA.
User-friendliness: Lightyear’s user interface is generally user-friendly.
Best for Beginner Investors Seeking an App to Start Small
5 pro tips for using investment apps
Here are five important tips to keep in mind when choosing an investment app to use:
- Investment products
Not all investment apps offer the same type of investment products. Some apps only allow you to buy company stocks or ETFs, while others also include crypto, bonds, or even gold. Others focus on tax-friendly investment packages. Therefore, it is important to choose an app that offers what you are interested in. For example, if you want to invest in crypto and stocks, you must select an app that supports both.
- Regulation
Always ensure that the investment trading app you choose is regulated by a trusted body, such as the UK’s FCA. This means the investment platform adheres to strict rules to protect users, ensuring that your money is handled correctly. Many regulated apps also offer FSCS protection, which means that if the company were to go bankrupt, your funds would be covered.
- Security
Security is a big deal when it comes to your finances. Good investment apps use strong safety tools like two-factor authentication (2FA), data encryption, and fingerprint or face recognition. These features help protect your account from hackers and keep your personal information safe. You should also look for investment trading apps that keep your money in separate accounts from the company’s funds. The more layers of protection an app has, the safer your money will be.
- Fees
Some platforms charge foreign exchange (FX) fees when you buy stocks in other currencies or subscription fees. For example, Trading 212 offers free trades but charges a small fee for FX transactions. On the other hand, Freetrade offers tiered services with additional costs. Always read the fee section carefully to understand what you’re paying for.
- User-friendly interface
An easy-to-use app is essential, especially for beginners. You want an app that is simple to navigate, with a clear homepage, smooth processes, and helpful prompts. Some investment apps, such as eToro and Lightyear, are recognized for their user-friendly and intuitive layouts. A good interface helps you avoid confusion and reduces the chances of making mistakes while buying or selling investments.
FAQs
Which investing platform is best for beginners in the UK?
If you’re new to investing, apps like Freetrade and Trading 212 are excellent places to start. They let you buy shares without paying fees, and you can start with as little as £1. Their apps are easy to use and do not feel too complicated for beginners. They are also safe to use in the UK as the FCA regulates them.
What docs do I need to open an investment app account in the United Kingdom?
Most investment trading apps require ID verification, typically using a passport or driver’s license. You could also need to upload a recent bill or bank statement that shows your UK address. Some apps may also request your National Insurance number to assist with tax checks. Finally, you would need a UK bank account and an email to set up and manage your account.
Can I start investing with just £10 on UK investment apps?
Yes, you can start investing in the UK with just £10 and even less. Apps like Trading 212, Moneybox, and Lightyear let you invest small amounts. This means you can buy fractions of a share even if you cannot afford the whole thing.
Conclusion
Establishing an investment portfolio is not as difficult and complex as some may think. This article highlighted various platforms offering investment services tailored for investors with different experience levels and needs. It also discussed several tips to keep in mind when choosing an investment app. Ensure you carefully consider them as you perform due diligence when selecting an investment platform to use.
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