Freetrade Plus: is it worth it?

Freetrade

Freetrade has always mentioned that they plan to have a freemium structure to their business with a free account and a premium version with added perks. Initially, these accounts were known as the Basic, ISA and Alpha accounts.

The premium version known as the Alpha account was expected to be around £9.99 a month that would give a discounted fee for instant trades for its Alpha subscribers, which was around £1 per instant trade. Last year Freetrade announced they would no longer be charging for instant trades, and at this point, we believe that its Alpha plan went back to the drawing board.

How it stacks up to other platforms

There is a lot of competition in the UK space for commission free breakage apps and with the recent announcement of Robinhood scraping its UK launch to focus on its home market. Free Tiers on other platforms still stack up well to Freetrade Plus, and it’s £9.99 a month fee.

In July 2020 Freetrade revealed its premium account offering renaming its Alpha account to Freetrade plus for £9.99 a month launched in October 2020. Which offers additional features to the basic and ISA accounts.

Features

Freetrade Plus offers several additions over the standard basic account for a monthly fee of £9.99 a month.

Does it add value?

It really matters how invested you are already in the Freetrade ecosystem and if you’re willing to shell out for the monthly fee.

If you’re already subscribed to their ISA account, then upgrading to the Freetrade plus is an additional 6.99 a month to the £3 ISA fee. This could soften the blow if you are considering upgrading.

You really have to ask yourself the question, do these additional features add value to your investing strategy? In our situation they don’t, We think some of these features such as limit orders and stop losses should be free and remain competitive against other platforms which we will go into later on.

Stocks behind a paywall

We don’t like that some stocks will be behind a paywall. As in the long run, this will affect the platform and users will look to move to other platforms like Trading 212 or Stake. However, we think what they should have done is perhaps add some exclusivity to any new stocks on Freetrade by giving plus subscribers 1-week early access to any new stocks or IPOs on the platform before the non plus account holders.

Alternative Platforms

Stake

Stake is a platform that focuses on offering only Stocks and ETFs on the US market, essentially a direct competitor to Robinhood. This platform has 3 tiers; free, unlimited and Black but does not offer an ISA account at present. The unlimited tier costs $9 a month, you can read the full Stake review.

(When you invest, your capital is at risk)

Trading 212

Trading 212 is the largest broker of commission-free investing apps in the UK, it offers the most features. This platform offers 2 accounts types, the first is its Invest account essentially a GIA (General investment account) which is comparable to the Basic and Freetrade plus accounts from Freetrade.

Trading 212 ISA is the other account they offer. What makes this stand out over the Freetrade version is they charge zero fees. The ISA offered by Trading 212 is completely free and allows you to include REITs in the ISA account, at the time of writing this Freetrade does not allow REITs to be included in its ISA accounts.

The premium features offered by Freetrade plus such as limit orders and stop losses are included as standard on Trading 212.

Conclusion

It really depends on how invested you are already in the Freetrade platform if you already pay for the ISA and have a sizeable amount in those accounts potentially it might be worth considering.

In our view, it’s too pricey and doesn’t make much sense for us. lets say you have £10,000 invested and your annual return is 3% (£300). The annual fee for the plus account would eat up almost 50% of those returns annually and doesn’t make much sense. However, the free basic account is of great value and a great platform to get started, in the world of investing. You can always start with the free offering on Freetrade and upgrade to Plus once you have a sizeable portfolio. You can use our link below and simply deposit just £1 into your account and get a free share worth up to £200. What do you think of Freetrade Plus? Leave a comment letting us know your thoughts on Freetrade plus!

Freetrade Sign-up Offer