A trading account sometimes goes by other names like a “share dealing” or “brokerage” account, but it all means the same thing. It’s a platform that lets you buy and sell company shares (stocks) from your phone, computer or tablet.
Opening a trading account isn’t as complex as you might think. We’ll detail the steps involved when joining a platform, and tips to help you find the right provider.
While “broker” and “share trading platform” technically have slightly different definitions, they’re pretty much used interchangeably. The share trading platforms we’ve reviewed on our site are all online brokers. So you can buy, sell, and hold shares – all right at your fingertips.
The term “investment platform” is a broad term for all platforms that let you invest, so they would also refer to robo-advisors, which are platforms that let you invest in ready-made portfolios.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
There are some key things that you ought to know about share trading.
The exact process for opening a share trading account varies depending on the trading platform you select. However, you’ll generally need to complete the following steps when signing up:
Trading shares online offers a secure and simple way to manage your investments. You can place trades at a time and place convenient to you, and keep tabs on your portfolio with ease.
It’s important to understand the difference between trading and investing. Buying shares online to hold as an investment is something we encourage. Trading complex instruments like derivatives using leverage (borrowed money) is something we don’t advocate because, unlike regular investing, you could end up losing more than you invest.
It’s important to make sure you’re aware of the risks before you start trading. As a beginner, you’d generally want to steer clear of short-term trading until you’ve got more experience as an investor.
You’ll need to carefully consider what you need before deciding on the right online trading platform, think about:
A stocks and shares ISA is a tax wrapper for investments. This means it’s a tax-efficient account that shields your investments from UK dividend or capital gains tax. You can invest up to your full £20,000 ISA allowance each tax year. This allowance could change in future so it’s worth making the most of.
It’s a generous allowance, and it’s unlikely that a casual investor is going to exceed it. Our research found that the average adult stocks and shares ISA has £9,331 in it.
If your investments aren’t in an ISA, you’d have to pay capital gains tax on your profits over a yearly allowance of £3,000. Or, pay dividend tax on any income over £1,000. Of course, you might not even make profits that high each year, but this will become more important as your portfolio grows over the years.
To find out about all the top options, check out our guide covering the best stocks and shares ISAs available to UK investors.
Opening a share trading account can be straightforward, and it’s the first step to investing in stocks and shares to make your savings work a little harder. It’s worth taking the time to read up on the basics, such as how to buy shares and how to invest in dividend stocks, or take a look at our investing for beginners hub.
If you’re not quite sure that you want to be in control of choosing specific investments just yet, a lot of people start with a robo-advisor. These invest on your behalf with a ready-made portfolio that’s managed for you. It’s a nice way of getting your feet wet if you’re not quite ready to open a share trading account and pick your own stocks.
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I am looking to buy shares in Carnival Cruise Line to get benefits while cruising. What is the cheapest and simplest way to buy shares?
Hi Roger. We have a page about Carnival shares, with information about the latest developments, the share price, platforms selling the stock, and fees. Your capital is at risk when buying any shares, of course.
If I want to invest with a broker that is not from my bank, can I do it from my bank account or I would have to transfer my money? How could he get access to my account?
Hi Lucas,
Thanks for getting in touch with Finder. I hope all is well with you. :)
Yes, it is possible that you use your own bank account to invest with a broker that is not from your existing bank. However, this would depend on the broker that you choose. For this reason, it would be a good idea to directly as your broker and check your available options.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua