There's no single cheapest investing platform that suits everyone — the true cost depends heavily on how much you're investing and how often you trade, since platforms charge in different ways that favour different types of investor. Comparing headline fees without factoring this in can easily lead you to the wrong conclusion about which platform will actually cost you the least.
1. Percentage fees vs flat fees
Platforms generally charge in one of two broad ways for holding your investments:
- A percentage-based custody fee, calculated as a proportion of your total portfolio value, often tiered so the rate falls as your balance grows, or capped at a maximum monthly amount on some platforms.
- A flat monthly or annual fee, charged regardless of your portfolio size.
For a smaller portfolio, a percentage fee often works out cheaper in cash terms, since a small percentage of a small amount is a small number. As your portfolio grows, a flat fee frequently becomes the cheaper option, since it doesn't increase alongside your balance. Working out roughly where your portfolio sits, and where you expect it to be in a few years, is the single most useful step in finding your genuinely cheapest option.
2. Trading fees add up too
Beyond the ongoing custody fee, check the cost of actually buying and selling investments. If you plan to invest a lump sum and leave it largely untouched, trading fees matter less. If you plan to invest smaller amounts regularly, or trade individual shares frequently, the per-trade fee can end up being a bigger factor than the custody fee itself. Many platforms offer a discounted regular investing plan for fund and ETF purchases, which can meaningfully reduce costs if you're contributing monthly.
3. Other charges to watch for
- Foreign exchange fees, charged when buying or selling investments priced in a currency other than pounds, which can add up if you invest heavily in international shares or funds.
- Exit fees, charged by some platforms if you transfer your investments elsewhere — worth checking before you commit long-term, even if it's not a concern on day one.
- Account inactivity fees, applied by a small number of platforms if you don't trade for an extended period, though these are less common than they once were.
4. Cheapest doesn't mean best value
A platform with the lowest headline fee isn't necessarily the best choice if it doesn't offer the account type or investment range you actually need. If you specifically want a Stocks and Shares ISA or SIPP, make sure the cheapest option you're considering actually supports it, rather than comparing costs across platforms that aren't offering you the same thing.
5. Working out your own cheapest option
A useful exercise is to estimate your portfolio size a year or two from now, roughly how often you expect to trade, and whether you'll be investing a lump sum or contributing regularly. Compare a percentage-fee platform and a flat-fee platform against these assumptions rather than relying purely on marketing claims of being "the cheapest", since that claim often only holds true for a specific portfolio size or trading pattern.
6. Frequently asked questions
Is a flat fee always cheaper than a percentage fee?
Not always — it depends on your portfolio size. Flat fees tend to become cheaper as your balance grows, while percentage fees can work out cheaper for smaller portfolios.
Do all platforms charge for buying and selling investments?
Most do, though the amount varies significantly, and some offer discounted or free dealing for regular investing plans into funds and ETFs specifically.
Should I choose the cheapest platform even if it has a smaller investment range?
Not necessarily. If the cheapest platform doesn't offer the specific investments or account type you want, it isn't genuinely the best value option for your needs, whatever its headline fee suggests.
Are there hidden fees I should watch out for?
Check for foreign exchange charges on international investments, exit fees if you later want to transfer elsewhere, and any account inactivity fees, since these aren't always obvious from a platform's headline pricing.
7. Conclusion
The cheapest investing platform genuinely depends on your own portfolio size, trading habits and the specific account type you need — not a single universal answer. Work out your own usage pattern first, then compare the platforms on this site against it, rather than assuming the platform with the lowest advertised fee will automatically be the cheapest for you.
