Share dealing

Investing in stocks and shares has become increasingly popular in recent years, as low interest rates have meant that returns from most savings accounts fail to keep up with the rising cost of living.

Stocks and shares, or equities as they are otherwise known, offer the potential for higher returns, but investing in individual shares is not for the faint-hearted as stock markets can be volatile.

When you own shares, you are basically buying part of a certain company or organisation. If that company performs well, then your shares will increase in value, but if it does badly, your shares could become worthless. The fewer the number of companies you invest in, the bigger the risks.

Those who are prepared to accept the risks involved will need to sell and buy their shares through a stockbroker or share-dealing service. Costs can vary widely, so it’s important to make sure you don’t end up paying more than you need to.

Different share-dealing charges

Remember that the best value option will usually depend on exactly which investments you want to hold, how much you're investing and how frequently you'll trade.

There are usually several costs you need to be aware of. For example, there is likely to be a quarterly or monthly administration charge, as well as a flat fee of per transaction for buying shares or funds. You may be able to reduce this charge if you set up a direct debit for online monthly dealing. There may also be additional charges for dividend reinvestment, whereby you reinvest any cash dividends you receive by buying additional shares, and some share-dealing services impose dividend collection fees, which could prove expensive for dividend investors.

You may also be charged an ‘inactivity fee’, so that if you only trade very infrequently, it might cost you more. Some share-dealing services don’t impose an inactivity fee but might have higher trading charges.

If you want to hold your shares in an individual savings account (ISA), where returns are free of income tax and capital gains tax, or a self-invested personal pension (SIPP) then you will need to check whether there is any charge for this. There may be different charges involved depending on whether or not you plan to hold your investments in one of these wrappers.

Additional services

Many share-dealing services also offer useful research and information to investors, with some offering broker share tips. However, often you pay more for services which offer a level of advice.

There may also be guidance as to which investments are more risky than others, so that investors can ensure that they choose shares which are appropriate for their needs, so it’s worth visiting several share-dealing website to see the sorts of services on offer.

Compare trading accounts

If you’re looking for a trading account for shares, it’s vital to compare the different available options so you can find the best solution for you. Services vary widely depending on which provider you go to, so think carefully about your requirements and weight up the costs involved to ensure you find the best share-dealing account to suit your individual needs.

How to sell shares
How to buy shares
Alternative Investments top level
Alternative Investments
Alternative Investments
Stocks & Shares ISA
Self Select ISAs

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