ISA cost

First Time Investing šŸ£
1

Iā€™ve recently found out that Trading 212 app Freetradeā€™s competitor doesnā€™t charge for the ISA, as a newcomer to Freetrade and new ISA account Iā€™m thinking I wish I had not opened it with FreeTrade as my investment so far is quite small, around Ā£1200 so far.
I see a lot of discussion on this so wondered at what point or what amount does it become worth it to have an ISA with Freetrade?
As I have stocks and an ISA with Freetrade Iā€™m wondering what to do, as Iā€™m still new to it all and looking to invest more, maybe I opened it too soon, I used a basic account for a while then decided to do the Isa as I didnā€™t want to pay tax, now am wondering if itā€™s worth moving it to Trading212 or just sticking with Freetrade, Iā€™m unsure of any advantage apart from the fact Freetrade is a UK company and seem to be like by many here.
Appreciate any feedback.

Just got a reply from one of the FreeTrade helpers, I was going to delete all of the above but maybe it will help others thinking the same.
I canā€™t copy and paste his reply as itā€™s on the app, so bullet points are

  1. We donā€™t sell our users order flow
  2. We donā€™t sell user data (v important to me)
  3. We donā€™t make money on the spread
    4.Were transparent with customers on what they pay and what they get for free. (I have read that elsewhere)
  4. The app is built for long term investing behaviour as opposed to servicing frequent trader activity.
  5. Lastly we build a different culture around investing , so company transparency, nurturing a community and education are all part of what we are building.

He goes on to say the Ā£3 might not be for everyone and different products make sense for different people,

Personally I really like that reply and feel much happier with the choice of FreeTrade. Hope that helps othersā€¦

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I hope youā€™re aware that you cannot open multiple ISAs in a tax year?
There is no point where freetrade gets better than trading212 in terms of ISA costs. ISAs are the way Freetrade makes money. Trading212 does not make any money from stock trading and are not planning to. They use it as a lure to get people into CFD trading.

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I guess the cost there is never knowing if your broker is trying to screw you or not.
Iā€™d say that peace of mind is well worth ~Ā£30 a year :laughing:

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You can open four ISAs every tax year.

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I clearly meant ā€˜Stocks ISAā€™.

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Nothing is free. I donā€™t like the way 212 do business so Iā€™d never open an ISA with them.

For Freetrade itā€™s between them and vanguard. So it doesnā€™t make sense until it hits around Ā£25k in assets.

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Thanks Eden, yes my initial research into Trading212 was a bit worrying about the company history, are you saying having the stocks ISA isnā€™t worth it until you have 25k invested into Freetrade?
Excuse the newb questionsā€¦just double checking.

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Fair enough but if you are essentially giving advice you should be specific.

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Dividends are allowed up to Ā£2,000 tax free per year. Assuming a 5% yield (for an example) you need Ā£40,000 to make a dividend portfolio worth an ISA. For capital gains it is Ā£12,300. If a portfolio of Ā£25,000 as examples above rose 50% you would owe tax but, given that is unlikely, you will probably be fine. There are nuances depending on your tax band so take your own circumstances into account.

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I may be wrong, but, if your 25k portfolio rose 50% over say 10 years (which is less unlikely)
you would still owe cap gains on it?

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It only depends on what you sell in a given tax year. So, assuming the allowance stayed the same, you would only own tax on Ā£200 worth of capital gains if you sold the entire portfolio in a given year.

The benefit of an ISA is only realised in the long-run. It enables you to sell when convenient regardless of tax implications.

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