An Honest Review of Trading 212: The Good, The Bad & The Ugly
- Trading 212 has the lowest fees for a number of different investors
- Usability of the app and website is simple and intuitive
- Low minimum deposits help beginner investors get started
- Trading 212 does not offer junior investment options or pension products
- Some funds may not be protected under the Financial Services Compensation Scheme (FSCS)
- Investment projections can be misleading
Financial Interest was founded by Damien Talks Money (220,000 YouTube subscribers) to teach the personal finance lessons he wished he'd been taught at school.
Last updated 9th July 2024
Founded in 2004, Trading 212 has quickly established itself as one of the leading brokers in the financial space.
The company currently holds over 3.5 billion pounds worth of assets and cash for its customer base.
Their goal has been to remove barriers that prevent people from entering the investing world and, in their own words, “disrupt the stock brokerage industry”.
However, is this 20-year-old broker a trustworthy and reliable provider for you to invest with? Should you consider using them, and is your money safe?
Let’s take an in-depth look at Trading 212 to answer these questions and more.
Features
Trading 212 offers a range of features designed to make investing accessible and efficient for users of all experience levels. The platform provides diverse account types to cater to different investor needs.
These include an “Invest” account for standard stock and ETF trading, a Stocks and Shares ISA for tax-efficient investing within ISA limits, a Cash ISA offering a high-yield savings option with a 5.2% interest rate at the time of review, and a CFD account for leveraged trading on various financial instruments.
Invest account
Trading 212 offers the easy ability to invest in stocks, commodities, ETFs and more via their “Invest” account.
There’s a massive selection of over 12,000 stocks and ETFs available to invest in.
The UK’s best execution rules mean that brokers (including Trading 212) can’t inflate the spread when purchasing stocks and shares, so prices should always be fairly consistent across brokers when buying the underlying asset – you own the stock. Note: this does not include the CFD account.
The Stocks and Shares ISA and Invest accounts are very similar, with the only real difference being that you won’t pay any capital gains tax or UK dividends tax on profits made within the ISA. However, you must also stay within the overall ISA limits.
If you’re investing in the UK and you’re within your annual ISA limits, you should always consider investing via a Stocks & Shares ISA if you want to avoid unnecessary tax payments.
Cash ISA
Trading 212’s Cash ISA is a glorified savings account, which offers a generous interest rate of 5.2% at the time of this review, which is the highest on the market.
In fact, Trading 212 offers 5.2% interest on uninvested cash in their investing accounts too – but this comes with a catch that we’ll address shortly.
Interest in the Cash ISA is paid daily and you can withdraw any time you want – you’re not locking the money up for a set period of time, offering good flexibility.
CFD account
The CFD account allows you to trade stocks, indices, commodities, and Forex with leverage, and you can also short stocks as well as buy them.
However, you don’t own the underlying share here, and CFDs are very risky. In Trading 212’s own words, 78% of retail investor accounts lose money when trading CFDs on their site.
The spreads on Trading 212 CFDs are reported to be larger than on other sites.
As long-term investors, we don’t gamble in the world of CFDs so we won’t elaborate on this section of the site further – other than to say this is the area of the business that Trading 212 claims to make the bulk of their profits, helping fund their low cost investing options elsewhere.
Debit card
There’s also a Trading 212 debit card on offer for you to use with your Invest account, and this takes money from your pool of uninvested cash.
With this card, you gain access to cashback which varies between 0.5% and 1.5% depending on when you signed up for it, and the cashback is capped at a market-leading £20 a month at the time of this review.
You can also use this card abroad with a 0.15% FX fee and the capability to hold your money in 13 different currencies.
Interest on cash
Another feature that various brokers are starting to implement is the ability to earn interest on the uninvested cash within your investing account. Trading 212 again offer a market leading rate in this area at the time of review – 5.2%.
However, this comes with a small catch.
Firstly, you must opt in to receive this interest. While this means you have to go slightly out of your way to earn the interest, many would see this as a positive thing because of the catch:
When using this feature, not all of your uninvested money would be covered by FSCS protection.
This is because some of the funds will be invested into QMMFs – Qualifying Money Market Funds – and if anything were to happen to the QMMF you’re investing in, it would be treated as an investment loss.
While this is very low risk and optional – with disclaimers – it’s important to mention here.
This only applies to the ‘earn interest on cash’ feature and does not apply to the Cash ISA, where your money is fully covered by FSCS protection.
Using the platform
Buying stocks
When it comes to browsing ETFs and shares on the investing side of Trading 212, you have a fairly bare-bones set of filters that you can use to search over 13,000 global stocks and funds.
These include the options to filter by most popular, biggest risers, biggest losers, business sector, and more – with the option of simply searching for the fund or share that you want with the search bar at the top, too.
Once you’ve found the stock or fund you’d like to invest in, you can click through to it and see all the information you need on what you’re investing into. They cover the past performance of the stock or fund with an easy-to-read and understand graph, along with showing you the history and instrument details with a simple day and year range feature.
Under the info and stats, you’ll also see a price volatility metric which will tell you if it’s low, medium, or high, giving you a rough idea of how risky your investment will be should you choose to put your money into the stock or fund.
Pies
If you’re looking to invest in multiple stocks or funds at once, you can set up what’s called a ‘pie’ in your portfolio section.
A pie is essentially a portfolio of stocks and funds that you can either build yourself or use a pre-made template, allowing you to invest in all the assets at once instead of manually picking out each investment and having them separate.
It’s extremely easy to set one of these up, and you’re able to set up a recurring payment into it as well, which can then be auto-invested as often as you like into the funds and stocks you’ve chosen.
You get some fairly basic but easy-to-understand charts and graphs that will track your pie’s progress and forecast its performance in the future, although there is a negative point surrounding this feature which we will cover below.
Flexible ISAs
Trading 212’s ISAs are flexible, which means you can move your money around more freely without impacting your annual ISA deposit limit.
For a real-world example of this: with many brokers, you could deposit into your ISA, withdraw, then deposit again – and you would have used up 2x the deposit limit.
Or, quite realistically, you could deposit into your Cash ISA, withdraw, then deposit into your Stocks & Shares ISA. Again, this would usually use up twice the necessary amount in your annual ISA deposit limit because you’ve deposited twice.
With Trading 212’s flexible ISAs, you’re able to move money between your ISAs – as well as withdraw funds from your ISAs – without it negatively impacting your annual limits.
At the top of the homepage, there’s a news tab for you to keep up to date with the latest financial news, and they also have their own form of social media on the app where you can view a feed of fellow investors sharing information and reports about financial news.
Both of these are nice features to help beginner investors immerse themselves in the often terrifying world of finance.
Fees
Trading 212 charges you zero commission on trades, zero platform fees, and allows you to invest inside a Stocks and Shares ISA for free.
Effective ISA fees (annual)
| £5,000 in ETFs | £125,000 in ETFs | £500,000 in ETFs |
|---|---|---|
| 0% | 0% | 0% |
They also charge an extremely competitive 0.15% FX fee across all of their accounts except for their CFD account, where they charge 0.5%. This is relevant if you’re looking to buy shares and funds listed outside of the Great British Pound.
Trading 212 also has an accessible minimum deposit of just £1.
| Broker | ISA FX fee |
|---|---|
| Freetrade | 0.59%* |
| Trading 212 | 0.15% |
| AJ Bell | 0.75%** + £5 per trade |
| Hargreaves Lansdown | 1%** |
| Fidelity | 0.75%** + £7.50 per trade |
| Vanguard | Fund only platform, no FX |
| InvestEngine | Fund only platform, no FX |
**Assumes value of trade is less than £5,000. Fee scales down for large trades.
Other fees
Trading 212 distinguishes itself in the broker market with its remarkably low fee structure.
When it comes to depositing funds, the platform offers several free options. Instant bank transfers and standard bank transfers are available at no cost, with no limit on the amount you can deposit. For those who prefer other methods, card payments and Apple/Google Pay are also free for deposits up to £2,000.
The platform maintains this cost-effective approach for withdrawals as well.
Users can withdraw funds as frequently as they like without incurring any fees, a policy that applies across all account types, including the flexible Cash ISA.
For investors looking to move their portfolio either in or out, Trading 212 offers a free transfer option.
This service allows you to move money to or from a different broker without any fees being charged by Trading 212. However, it’s worth noting that while Trading 212 doesn’t charge for these transfers, you might face fees from other brokers when transferring out of their platforms.
This comprehensive fee-free approach across various account operations demonstrates the company’s commitment to making investing more accessible and cost-effective for its users.
Profitability
Trading 212’s low-fee structure raises questions about their profitability – can they continue to operate this way long-term, or is it all a rouse to rope new customers in before hiking the prices?
They claim to make money primarily through a 0.5% currency conversion fee on foreign trades in CFD accounts, applied only when closing trades.
As we commented on earlier, some users report that their CFD spreads are on the larger side too – though this doesn’t apply to their regular investing (non-CFD), and can’t apply because of UK best execution laws.
Looking at Trading 212’s features and fees, things appear very positive.
However, it’s important to consider the broader picture.
To provide a balanced view, we’ll examine both the pros and cons of using their platform. We’ll start with what we like about Trading 212, as there are many positives to highlight about this broker – though the drawbacks are worth considering, too.
Pros
Trading 212 stands out for its user-friendly approach to investing. Their platform features easy-to-read graphs and streamlined filters for stocks and funds, catering to investors of all experience levels.
Both the web and mobile app versions are fully functional and operate smoothly, which is noteworthy in the brokerage world.
The “Build a Pie” feature is a highlight, allowing users to create diversified portfolios easily and set up auto-investing for a more hands-off approach.
For beginners, the app’s news tab and social media section provide valuable educational resources to help inform investment decisions.
Trading 212 offers market-leading interest rates across all investing accounts, at the time of writing. While there’s the QMMF/FSCS catch with part of this feature, the Cash ISA provides this high interest rate without conditions – making it attractive for savers.
In terms of fees, Trading 212 is one of the cheapest platforms around. They offer free investing within a Stocks and Shares ISA, no minimum deposit, zero trading platform and withdrawal fees, and a low 0.15% FX fee on Invest and Stocks and Shares ISA accounts. All accounts are accessible at no ongoing cost – no subscription, no annual account fee.
They also offer a debit card with incentives including up to £20 monthly cashback, potentially serving as a complete banking solution.
There are a lot of positive points to be made, but let’s now consider the negatives in order to reach an overall verdict.
Cons
When examining the downsides of Trading 212, the FSCS protection issue is a primary concern – specifically regarding their heavily advertised “interest on cash” feature.
To benefit from this interest on uninvested cash in investing accounts, users must opt into the “Earn Interest on Your Cash” program. This involves your money being invested into QMMFs – Qualifying Money Market Funds – which aren’t covered by FSCS protection. If these funds become insolvent, investors could lose that portion of their money. However, it’s important to note that this doesn’t apply to the Cash ISA, where funds are fully FSCS protected.
The interest-earning feature is optional and can be disabled at any time – and has to manually enabled by users in the first place. In addition, it’s worth considering the fact that most investors typically aim to invest their cash rather than sitting idle in their accounts.
One feature we really don’t like is the potentially misleading portfolio evaluation forecasts within the pie feature. The projections that appear here are often unrealistically high for long-term performance, which could misguide inexperienced investors.
While this can be ignored, its prominence in the interface leaves a sour taste in the mouth.
In terms of what they’re missing, Trading 212 currently lacks a SIPP and any form of junior investing accounts, which are offered by many competitors.
Other minor criticisms include issues with their debit card offering. There’s a £4.95 charge for an optional physical debit card, although this cost can potentially be offset by cashback earnings, and a free digital-only version is available as an alternative.
Some users may find this card fee objectionable, but it’s worth considering that many banks that offer “free” cards will essentially indirectly charge you for cards through lower interest rates or lack of cashback.
Verdict
Trading 212 has emerged as a leading consideration for investors, with its strengths outweighing its drawbacks in our opinion.
The platform offers a diverse range of account options, coupled with market-leading interest rates and exceptionally low fees, making it particularly attractive to passive investors of all experience levels.
Low fees and high-interest rates can add up to significant savings or value increases when compounded over time, and this is brought together with a simple, user-friendly interface and great customer service.
Trading 212 has shown consistent improvement and growth. They’ve been proactive in addressing platform issues and continuously strive to offer the best rates in the market.
This commitment to improvement is evident in their regular release of new features, all while maintaining a focus on cost-effectiveness and ease of use.
An important point to consider is Trading 212’s profitability as a business. This financial stability suggests that they’re less likely to significantly increase their fees in the future, providing some reassurance to long-term investors.
In conclusion, we believe that Trading 212 has a great combination of competitive offerings and user-friendly design, and their ongoing improvements make it a worthy consideration for many investors, particularly those favouring a passive investment strategy.
At the time of writing, Trading 212 is our number one pick for a Stocks & Shares ISA.
Disclaimer: we are an affiliate of Trading 212 and genuinely use their service when investing. We decided not to include affiliate links or our promo code in this review. Our opinions are never impacted by affiliate referrals – brokers offer far bigger commissions than Trading 212 do. Read our advertising disclosure for more information.
Financial Interest was founded by Damien Talks Money (220,000 YouTube subscribers) to teach the personal finance lessons he wished he'd been taught at school.