Trading 212 ISA 2023 – 5 Reasons to get one now

An Trading 212 ISA for 2023 could be a great choice for you. In this article I offer 5 reasons why an Trading 212 ISA might well suit you and your investing style. Trading 212 offer a general investing account, an ISA and the option to trade with CFD’s. This article is specific to their ISA offering only.

Before we go any further, nothing in this article should be considered financial advice! I am not a financial advisor, nor qualified to talk about it in any way. When you invest, your capital is at risk and you may end up getting back less that you put in.

Also, this is not a sponsored post! Trading 212 is a product I love and one I have used for years. While it’s not my current ISA I do have an ISA with Trading 212 from a couple of years ago that still has over £17,000 committed to it.

That said, if you find this post useful and you want to support the blog, I have a referral link! Using it will get both you and I free shares worth up to £100.

Portfolio Update Featuring Trading 212

For all the folks who are interested in flexible and cheap investing, this one is for you.

Trading 212 has certainly gathered pace again, after they closed their doors to new customers for about a year. So it’s about time to find out exactly what Trading 212 has to offer for your ISA in 2023. So here are the 5 reasons you choose Trading 212 for your ISA in 2023.

1. A Trading 212 ISA has lots of flexibility

Trading 212 offers a vast range of assets

A Trading 212 ISA has a huge range of assets available to invest in. Whether you are interested in some of the biggest companies in the world like Tesla, Google and Amazon or some of the best known UK stocks like Unilever or Tesco. Maybe you want to buy index trackers, or other types of ETFs, you can do that too.

An ETF is an Exchange Traded Fund – for now think of it as a collection of stocks all lumped together for some reason. It might be a particular index, like the top 100 companies in the UK, or they could be grouped by a sector like property or clean energy. An ETF is then bought and sold as a single entity. Investopedia has a nice article explaining this is more detail.

So rather than trying to pick individual stocks, which can be incredibly volatile, Trading 212 can easily be used for diversified long term investing – rather than fast and furious trading like their name implies!

Personally, I have a mix of ETFs and individual holdings in my Trading 212 ISA. Some doing better than others!

Trading212 ISA holdings
Trading 212 ISA at January 2023

Fractional Shares for your Trading 212 ISA

Trading 212 offers fractional shares. What this means is you don’t have to have enough money to buy a full share of something in order to invest. Let me demonstrate by example.

Imagine one unit of VUSA (Vanguard’s offering for the S&P 500) costs £100. It doesn’t, by the way, but it makes for a simple example!
One unit costs £100, but you only have £50. In this case, you can buy 0.5 shares of VUSA with Trading 212.

Trading212 fractional shares
Fractional Shares are available in a Trading 212 ISA

This makes investing with a Trading 212 ISA very flexible as you can invest as little or as much as you want to in order to to maximise your funds.

As an aside – Vanguard do not offer fractional shares on their platform, so if you wanted to buy Vanguard products on Vanguard’s platform you have to buy in full units. That means, in this example, you couldn’t invest in VUSA unless you had at least £100. It’s restrictive, but Trading 212 have taken away the problem by allowing fractional investing.

Proper regulation here in the UK

Trading 212 is regulated by the FCA here in the UK. What this mean is that Trading 212 is required to comply with the FCA’s rules and regulations, which in turn are designed to protect consumers and promote fair and transparent financial practices.

Accounts with Trading 212 are covered by the Financial Services Compensation Scheme (FSCS). The FSCS is a UK government-backed compensation scheme that provides protection for consumers of financial services in the event that a financial services firm becomes insolvent or is unable to meet its obligations.

It’s important to note that the FSCS is a compensation scheme and is not a guarantee of the performance or security of any investment. It’s always a good idea to do your own research and carefully consider the investment options and services offered by any financial services company before making any investment decisions. It’s also a good idea to seek professional financial advice if you have any questions or are unsure about any aspect of your investments.

Investments can go up or down and you could get back less than you put in – don’t forget that!

2. A Trading 212 ISA lets you keep more money and pay less tax

InvestEngine ISA could save you money
Trading 212 ISA costs:

Investing within a Trading 212 ISA allows you to invest up to £20,000 for 2023/24 and while it remains invested, any profits remain free from tax here in the UK. So whether that’s from dividends or just plain old growth through your investments going up in value, you won’t have to pay a penny in tax.

When you consider consistent investments with Trading 212 in solid shares and sensible ETFs, and how these investments could compound over time, then these tax free benefits are really quite significant.

If you invest outside an ISA then every penny you make from your investing could be liable for tax depending on how much you make and under what category that profit comes under. Simplify the whole investing game by maximising your ISA allowance.

3. An ISA with Trading 212 is incredibly cheap

Trading 212 is an extremely low cost option for an ISA. Here is a screenshot of the associated fees for a Trading 212 ISA.

Trading212 ISA fees
Associated fees for a Trading 212 ISA

So the only fees you have to pay are if you want to deposit by credit/debit cards beyond £2000, or if you are buying foreign shares. Buying foreign shares will incur a 0.15% commission fee for currency conversion and this is extremely competitive.

Comparing these charges to Freetrade for example and you can see Trading 212 is much better value.

Freetrade charge a minimum of £4.99 per month for their ISA and have foreign exchange fees of 0.45%.

Further, these fees are going up on 11th April 2023.

Freetrade fees captured from their website
Trading 212 competitor fees are much higher

As you can see, other competitors are higher still.

At this point there is just no need to pay this, I don’t understand why people do.

If you are interested in starting with Trading 212 then I have a referral link for you! Using it will get both you and I free shares worth up to £100. Just remember investing is volatile – investments can go up or down, and you may get back less than you put in. Your capital is at risk whatever investment you choose.

You are on your own with Trading 212

Part of the reason Trading 212 is so cheap for an ISA, is that they can make a lot of money from CFD trading. We aren’t interested in this of course, but another reason is that Trading 212 don’t offer a managed portfolio. Any investing you do with Trading 212 is going to be the result of decisions made by you and only you. There are no fund managers who are ready to manage a portfolio for you. There is nobody at Trading 212 who is going to help you formulate a plan.

So, if you have no idea what your goals are or what you want to invest in, Trading 212 might not be the right app for you.

There are plenty of other providers who can provide a managed service for you, that will let you just deposit money and forget about how that is invested. It’s important to know that Trading 212 is not that sort of service.

If you have any doubts on investing it is worth talking to a professional financial advisor to talk about your financial goals and whether investing is right for you.

4. Trading 212 offer lots of education material

Trading 212 are keen to educate their customers on what’s going on with the platform and investing in general. They have a nice community which is updated with commentary on what’s going on in the world of finance and they have material to help you get started and with investing in general.

5. Trading 212 offer excellent customer experience

Trading 212 offer a full desktop app along with a mobile app. The app is mostly what I use because it’s convenient, but I do find that information is easier to digest on the desktop version, simply because there is more screen real estate.

To be honest, long term investing means you don’t have to be checking your portfolio every few minutes on your phone, so it might be something to avoid installing if you find it gets addictive checking it.

You wouldn’t check the value of your house every day so why do the same with your stocks and shares!

Customer service is very responsive. The few times I had questions or needed an explanation for something, the customer service agent who responded was polite, knowledgable and succinct.

Trading212 ISA support
Trading 212 ISA support is excellent

One criticism levelled at Trading 212 is that they are very young. A relatively new platform and trust has to be earned. However, with all the right regulation in place and my personal experience being very good over the last three years or so, I’m happy with everything Trading 212 has to offer new and existing customers.

Bonus Reasons!

Trading 212 has a very low barrier to entry. You can get started with just £1 and top up any amount after that. Commission-free investing whether you want to contribute regularly or just add more to your investments as and when it suits.

3 thoughts on “Trading 212 ISA 2023 – 5 Reasons to get one now”

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