Fundamentally, Interactive Investor is a fixed fee platform. This means that regardless of whether your portfolio is large or small, you’ll end up paying the same amount per year to use the service. For this reason, fixed fee broker charges favour larger investments, usually above £30,000.
Also, there are other nuances to consider, such as how often you trade and what you buy and sell. This means one size does not fit all and a single comparison does not work for all investors.
Laid out below are the charges for the ‘Investor’ plan, including a few scenarios for comparison.
- £9.99 a month service plan fee gives you access to a Stocks & Shares ISA, Junior ISA and a general Trading Account
- Add a SIPP for £10 a month extra
- One free trade per month, after this it’s £7.99 per trade
- No trading fees using the regular investing service
You can upgrade the Investor plan to two other tiers; Funds Fan & Super Investor. These offer additional discounts for more frequent traders.
This depends on how you plan to invest. The table below shows the raw platform fees using different size investment portfolios. However, if you buy frequently, then you need to review the buying and selling costs for your chosen investment. Use this table as a guideline only.
The table shows that which platform will be cheapest based purely on platform fees. It also makes some broad sweeping assumptions. If you regularly invest once per month and in one stock or fund, then this table should hold true.
However, it doesn’t take in to account trading frequency. If you are a more frequent trader, then please review each platforms’ dealing fees.
In general, Interactive Investor is going to be cheaper as your portfolio pushes above the £30,000 mark. There are always exceptions though. If you only trade Vanguard funds, then the Vanguard Investor platform doesn’t get beaten until around £80,000.
You get one free trade per month with Interactive Investor, which can be used for funds or individual stocks. If you trade more often than this, things get a little trickier to work out.
If you want to invest in different individual stocks each month, then most platforms charge a fee. For example, Hargreaves Lansdown charges £11.95 for dealing UK and overseas shares, investment trusts, exchange-traded funds (EFTs), gilts and bonds. By contrast, there is no fee for buying or selling funds.
After using up your free trade per month, Interactive Investor charges £7.99 per trade for all transaction types.
Regular investing is slightly different with Hargreaves Lansdown charging £1.50 per stock per month and Interactive Investor leveraging no charge.
So, if you want to choose your investments each month and you plan to buy or sell at least one share per month, then Interactive Investor should work out cheaper.
Furthremore, if you regularly invest each month, then remember to tag another £18 onto your Hargreaves charges above (12 x £1.50). If you are in this situation and have over £23,000 invested, then Interactive Investor should again be cheaper.
In summary, these nuances are all good reasons as to why it’s important to know how you plan to use the platform.