Individual savings accounts (Isas) are a powerful way to invest because every penny of income and profit you earn inside these shelters is tax-free. Now, a special offer from the fintech broker Trading 212 could help you create even more value. First, if you open a new Isa account with the firm before 30 April, it will give you 1% cashback on every deposit you make in the Isa during the 2024-25 tax year. And, as an extra bonus, Money Week readers will get up to £100 worth of free shares when signing up to the platform and depositing money on it.
Commission-free trading
Trading 212 has been working with investors worldwide for more than a decade with an innovative business model charging no commissions. More than 15 million investors have downloaded its mobile app so far – the app has been the number one trading app in the UK since 2016.
Most brokers take a percentage of your money each time you want to buy or sell an investment, which acts as a drag on the returns you earn; at Trading 212, by contrast, trading is completely free from commission. Instead, you only pay to invest if you want to convert your money from one currency to another, or if you place a trade in a different currency.
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5% interest on cash
The broker is also renowned for the top-of-the-market rates it pays on cash deposits in its accounts, including in its Isas. When investors have cash in their accounts, Trading 212, currently pays 5% interest on sterling deposits, with interest paid daily. If you hold your money in dollars or euros, you’ll earn market-beating rates of 5.1% and 4.2% respectively.
As for the rest of your portfolio, Trading 212 enables you to invest in a wide range of shares, exchange-traded funds, foreign exchange instruments, commodities and other assets. You can hold money – and trade – in 12 different currencies, with a currency conversion fee of only 0.15% if you need to convert your funds.
Investment innovation
Trading 212 has also pioneered several other investment innovations. For example, it was the first broker in the UK and Europe to offer trading in fractional shares. This enables investors to buy just a proportion of a share in a company – rather than a whole share – which can make it easier to invest in companies with very high share prices. Shares in many US companies, for example, are priced at hundreds or even thousands of dollars.
Fractional shares also make it much more straightforward for investors to build diversified portfolios of investments. The goal is to reduce risk by spreading your bets rather than putting all your eggs in one basket.
To help investors with this process, Trading 212 offers several valuable diversification tools. Its “Pies” feature allows you to visualise your portfolio as a pie divided into multiple slices – all the different assets you hold. You can adjust the proportions of your slices as you see fit, rebalancing your portfolio automatically in order to manage risk and return in a way that suits you.
Similarly, Trading 212’s AutoInvest feature enables you to deposit funds, place investments and reinvest dividends automatically. Saving regularly in this way provides investment discipline, but also unlocks an effect known as pound-cost-averaging, smoothing out returns over time. When prices fall, your regular investment goes further, helping returns as assets recover.
Special offers
To qualify for Trading 212’s 1% cashback offer on Isas, you’ll need to be opening an account with the broker for the first time, to have an active Trading 212 Invest account, and to open the Isa before the end of April. You’ll then qualify for a 1% cashback payment on each new deposit you make into your Isa during the 2024-25 tax year, beginning on 6 April.
Money Week readers taking part in the promotion will also receive a random free share worth up to £100. You can hold the share alongside the rest of your investments – including any money you hold in Trading 212’s high-interest money market funds.
To find out more and to claim your free shares, check out this link.
This promotional feature does not represent financial advice. When investing, your capital is at risk. Investments can rise and fall and you may get back less than you invested. Past performance is no guarantee of future results. Other fees may apply.
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