Free ISA account

Ideas šŸ’”
#1

Hi all,

I was a little bit surprised to see that the ISA account (Ā£3 per month) is not free whereas the GIA is. Is there any rationale for making it that way? I would have assumed that most people would want to have an ISA open so no taxes are paid instead of having the GIA one (appreciate that you still have your annual allowance so for the small investor, it made not make a difference at all)

Quick edit:

Thanks for all the replies, but I think the point I am making is that while it is true that everybody wants to have an ISA, banks are offering it for free when they want to open an account with them, whether thatā€™s a HTB ISA, LISA, etc therefore the question here is whether people would actually pay for an stocks and shares ISA account when they can get it from other stock brokers or free. Are we losing that piece of the market?

#2

Ā£3 per month for a long term stocks and shares ISA is one of the best investments there is.

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#3

Well, you re right. More people want the ISA, thatā€™s why it costs so that the business can make money/cover costs.

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#4

Surely youā€™ve just answered your own question. Most people would prefer to trade with a tax wrapper. And Ā£3/month is a fair amount to pay considering the how much you can grow your savings by.

Also, the ISA can give investors peace of mind. Even if you donā€™t exceed the capital gains tax-free allowance, thereā€™s still the disposal proceeds limit in place, and exceeding that requires you to report capital gains even if your gains are below the tax-free ceiling.

#5

@TomShepherd @SebReitz @Ardrich87

Thanks for all the replies, but I think the point I am making is that while it is true that everybody wants to have an ISA, banks are offering it for free when they want to open an account with them, whether thatā€™s a HTB ISA, LISA, etc therefore the question here is whether people would actually pay for an stocks and shares ISA account when they can get it from other stock brokers or free. Are we losing that piece of the market?

#6

A cash ISA and S&S ISA are completely differentā€¦ you get minimal interest from a cash ISA with a banks. If you signed up for a S&S ISA with a bank, youā€™d be paying a lot more to buy and sell sharesā€¦

3 Likes
#7

Banks traditionally lend out your money or invest it, investment platforms canā€™t invest your money since youā€™re already doing that.

Look out as well, as the past few years the question of banks charging for accounts has come up a few times.

S&S ISAs have always come with a small cost, usually a % fee which becomes quite costly as your ISA grows

#8

Think this is a topic thats been brought up time and time again in that we get people want something for free, hell who doesnt? However like many on here including myself have pointed outā€¦its Ā£3.

If that breaks the bank for you per month (not day, or week) then I think a person needs to evaluate what they consider " a loss" per month.

As pointed out above what you get for the Ā£3 more than makes up for it. Also in terms of the market, right now I have a Plus account, so my ISA is getting me better interest than any of the current free ISAs my bank offers.

#9

Go to another platform if you do less than 3 trades a year and it will be cheaper.

However, if you actually plan on buying shares in the ISA you have set upā€¦Freetrade makes more sense.

You need to look at Forex fees too - Halifax for example charge extortionate fees on each foreign tradeā€¦

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#10

I imagine the S&S ISAs that are free either limit the buys and sells or invest the money in a portfolio of S&S on your behalf.

#11

If you hold 10k in an ISA with Freetrade youā€™re effectively paying a 0.36% fee every year for the privilege of unlimited free trades, a slick app and safe in the knowledge that you are using a platform that will likely be #1 in Europe for many years to come.

That ā€˜feeā€™ obviously decreases as your portfolio increases too.

That or a free ISA elsewhere and either pay a stupid amount per trade or get shafted on the spread?

No brainer for me.

2 Likes
#12

Yet another thread from someone who doesnā€™t see the bigger picture. If FT gave EVERYTHING for free, how would they make any money. The company would soon collapse and that helps no-one.

If you canā€™t afford to pay Ā£3 a month for an ISA, then perhaps you shouldnā€™t be investing in the stock market.

If you are not making enough profit to cover the Ā£3 fee, then I should point out that you wonā€™t be getting anywhere close to the Capital Gains Tax limit either. So you should really be using the free GIA instead.

9 Likes
#13

I think the issue is more one of transparency. The banks may offer a free ISA but they make that back and more by having high dealing charges.

Itā€™s similar to sending money abroad, there may only be a small Ā£10 fee but you lose hundreds in foreign exchange fees which are hidden.

You need to consider the total cost.

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#14

Where does one go to get ā€œshafted on the spreadā€? That would be illegal wouldnā€™t itā€¦

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#15

Trading212. Not sure about legality but itā€™s a well known opinion that they mark up when it comes to price execution

Edited to prevent any drama

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#16

Sorry but that is complete nonsense - that is only true for CFDs and is illegal for stocks (and doesnā€™t happen on t212ā€™s invest or ISA).

I donā€™t know where you have seen any evidence for what you claim.

3 Likes
#17

Month.

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#19

are they really!?

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#20

Yes, but then they charge Ā£9.99 per trade :joy:

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