How to choose the best (and cheapest) DIY investing Isa (2024)

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Investment accounts and stocks and shares Isas

The rise of online brokers and DIY investing delivered a revolution in buying shares, investment trusts and funds - offering investors huge savings compared to the old days of using their stockbroker, financial adviser, or going straight to a fund manager.

Online investment accounts - and now app-based investing services - have pushed down the cost of buying and holding shares, funds and trusts, with some even now offering fee-free trading and no-charge basic accounts.

Almost all offer stocks and shares Isas, a tax-free wrapper around investments that shelters them from capital gains tax on profits and dividend tax on income.

A DIY investing platform makes it easyto invest in a stocks and shares Isa, self invested personal pension, or standard trading account online and start putting your money to work. Some will even pay you to switch, with Hargreaves Lansdown and Interactive Investor currently offering up to £5,000 cashback.

We explain how to decide on a DIY investment platform to invest in the full range of options: from shares, funds and investment trusts, to ETFs and direct retail corporate bonds - and why a stocks and shares Isa is essential for growing your wealth.

Check the table below for the brief details on price and features and read our full look at each investment platform and who they could be good for below.

Investing platform and stocks and shares Isa costs

How we review investment accounts

We have focused on two vital aspects, cost and quality. This is not a collection of all of the absolute cheapest DIY investing platforms, or an exhaustive list - these are some we think stand out for their service and that also compete keenly on price.

Investment account pricing can be chiefly be split into two camps: some charge a flat administration charge, while others charge a percentage of investors' holdings.

The former tend to always charge for buying and selling investment funds, while the latter may bundle this cost in and offer free fund dealing.

Almost all charge for buying and selling shares, investment trusts, ETFs and any other products that are not funds, but the dealing fees vary from as low as £4.95 to about £12. Some of the investing apps offer fee-free share, trust and ETF dealing.

If you plan on buying and selling regularly watch our for dealing charges, as these can also add up substantially. Lower charges for regular monthly investing can substantially cut costs.

Why does a stocks and shares Isa matter?

The right Isa wrapper or investing account has the power to boost your investments, helping you to build a portfolio and limiting howyour hard-won returns are eaten into by fees.

DIY investing platforms act as a place to buy, sell and hold all your investments and a tax-efficient wrapper around them if you choose to invest in a stocks and shares Isa.

For the sake of your long-term wealth, it pays to hold investments in a stocks and shares Isa and not lose a chunk of profits and dividends to tax - and then see the potential effect of that compound over the years.

This has become even more important, as at the start of the new tax year on 6 April 2023, the capital gains tax-free allowance will be slashed from £12,300 to £6,000 and the dividend tax-free allowance will be cut from £2,000 to £1,000.

There is even worse news a year down the line when the capital gains tax allowance dives again to £3,000 and the dividend allowance falls to just £500.

Fortunately, investing through a stocks and shares Isa allows you to shelter investments from capital gains and dividend tax. Every tax year, all adults get a £20,000 annual Isa allowance but remember it is a use it or lose it affair and any of this amount not paid in by the end of the tax year is lost.

Our pick of the best investment accounts

This list is in no particular order

Hargreaves Lansdown*

Hargreaves Lansdown is the big gun of DIY investing. The website is packed with information from its advisers and analysts, the shares and fund data is comprehensive and there is a very handy app.

Investors pay a 0.45 per cent fee on their total fund investments up to £250,000; 0.25 per cent to £1m, 0.1 per cent to £2m and nothing above that. Shares and investment trusts also incur a 0.45 per cent charge on the entire holding, capped at £45.

Hargreaves has negotiated some reduced annual management charges from fund managers.

Fund dealing is free. Share, investment trust, corporate bond and ETF dealing costs £11.95 per trade. If you trade more than 10 times per month share-dealing costs step down. Regular monthly share and some investment trust investing is £1.50, dividend reinvesting is 1 per cent, with a £1 minimum charge and £10 maximum.

Hargreaves has its very influential Wealth 50,a range of Master Portfolios, and its Portfolio+ service to make investing progressively easier and more hands off

Hargreaves Lansdown recently announced it would remove exit fees and cut a number of its costs.

Standard non-Isa dealing: Hargreaves' non-Isa Vantage account carries the same charges except for removing the fee for holding shares and trusts.

Who is it good for? Those looking for an advice-rich service that is price-competitive but not the cheapest around. It does come with lots of bells and whistles, including a very good app and portfolios for easy investing.

Our tests found Hargreaves platform easy and intuitive to use and its newly revised app is good.

It offers a proven popular service weighted towards funds but with access to investment trusts, ETFs, shares and the corporate bond market under one roof. [More details on Hargeaves Lansdown*]

Interactive Investor*

Interactive Investor has monthly fee plans. These start with the£4.99 per month Investor Essentials offer for those with portfolios of less than £50,000.

Above that level fees are £11.99 and £19.99 per month, for the Investor and Super Investor plans.

A £12.99 per month Pension Builder option is only available to those just holding a Sipp, otherwise the standard Investor and Super Investor charges plus £10 per month to add a Sipp apply. A Pensions Essentials plan is available for Sipps with under £50,000 in, costing £5.99 per month.

Trades in UK shares, funds and investment trusts and US shares are charged at £3.99 each.

Investors get £3.99 of trading credit per month, which lasts for 30 days. This does not apply for Investor Essentials customers.

Trading in other international shares is £9.99, except for the Super Investor plan where they are £5.99. Dividend reinvestment is just 99p for all plans and regular investment is free.

Who is it good for?Choose the standard Investor option under Interactive Investor's charging structure and you will pay £143.88 per year and get back £47.88 in trading credits – but you must spend each one within a month.

The cost of buying and selling UK investments at £3.99 has been cut from its previous £3.99 and isn't bad, although fund investing costs more than some rivals. Free regular investing is a winner.

Investor Essentials is an interesting idea, cutting the cost of flat fee investing for those starting out or with small portfolios. But investors considering this should remember they don't that free monthly trade, which when taken into account brings the real cost of the standard £11.99 per month plan down to £8. That said, if they use the regular investing service or don't buy often, the Investor Essentials plan makes sense.

In This is Money’s view, Interactive Investor’s charging plan makes it a top contender among investing platforms. Service is good and the fees are keen.

Interactive Investor is a good option for those with larger portfolios who would find percentage-based charges elsewhere mounting up. Someone with £100,000 in funds at Interactive Investor would pay £143.88 per year. At Hargreaves Lansdown, with a 0.45 per cent annual fee, they would pay £450.

Our tests show II to be easy to use, with useful functions such as excel portfolio downloads, and an app that has improved greatly in recent times.

[More details on Interactive Investor*]

Fidelity*

Fidelity is one of the big investing names and has a platform packed with useful information, guides, market commentary and videos.

Share dealing has a flat £7.50 fee and this charge also applies toinvestment trusts and ETFs.There are no fund dealing charges for buying and selling.

Holding investment funds carries a 0.35 per cent charge up to £250,000 and 0.20 per cent above that and 0 per cent above £1million.

However, if you are investing small amounts the charging structure is slightly different. Fidelity charges £7.50 per month (£90 a year) for portfolios up to £25,000, or the 0.35 per cent rate applies if you have a regular savings scheme set up.

Annual charges are capped at £45 for holding shares, trusts and ETFs.

Who is it good for? Fidelity offers very useful service. It is one of the big guns, has model portfolios, tools to help you decide how to invest and a wealth of information on offer.

Our tests found the main site easy to read and navigate, with lots of helpful information.[More details on Fidelity*]

AJ Bell*

AJ Bell has a 0.25 per cent annual administration charge.For non-fund holdings in Isas, such as investment trusts, shares and ETFs, this is capped at £3.50 per month. In a Sipp the cap is £10 per quarter.

For fund holdings it steps down to 0.1 per cent from £250,000 to £500,000 and then nothing above that.

Fund dealing costs £1.50. Share, ETF and investment trust dealing is £9.95 - but this will be cut to £5 from 1 April 2024.

Regular investing costs £1.50 into funds, FTSE 350 shares and a limited range of investment trusts.

Who is it good for? AJ Bell scores with a low percentage admin charge that is also capped for shares, trusts and ETFs. It does have fund dealing charges, but at just £1.50 these are competitive. Share dealing charges are soon to be cut to £5, which is good news.

There is cost effective regular monthly investing in funds, shares and selected investment trusts. There is no cheap dividend reinvestment.

Our tests show AJ Bell to be simple to use and while it may not look as flashy as some rivals, it competes well on cost.

[More details on AJ Bell*]

iWeb - Self Select Stocks and Shares Isa

iWeb run by Halifax sharedealing offers a competitively priced service. Its stocks and shares Isa offers the chance to invest across shares, investment trusts, funds and ETFs, with a £100 one-off set-up charge but then no admin charge beyond that. The £100 fee is currently being waived until the end of 2023.

It costs just £5 to buy or sell funds, shares, investment trusts or ETFs. Dividend reinvestment is 2% with a £5 maximum charge.

Standard non-Isa dealing: Charges are the same

Who is it good for?iWeb is keenly priced for those looking to regularly buy investment trusts, shares or ETFs thanks to its low £5 dealing fee but the set-up fee of £100 may put people off - the good news is that this is waived until the end of 2023. Bear in mind that you do need to pay for fund-dealing here.[More details on iWeb]

BestInvest*

Bestinvest relaunched with a revived website and update of its offering - including free financial coaching sessions.

Isa and standard investors pay annual charge of 0.40 per cent a year on their portfolios up to £250,000, and 0.2 per cent to £500,000, then 0.1 per cent above that to £1million. No extra charges are added above £1m.

Those investing in its ready made portfolios pay a lower 0.2 per cent and then 0.1 per cent fee.

Bestinvest has no dealing charges for funds, while standard share and investment trust dealing is decent value £4.95.

There are no reduced regular monthly investing charges for shares and trusts, nor is there cheap dividend reinvesting.

One standout element is that Bestinvest offers free financial coaching from its qualified financial planners. Even non-customers can take advantage of this with one free session, while customers get unlimited free financial coaching booked at a time that suits then and done either online or over the phone.

Financial coaching is different to financial advice, with planners unable to recommend specific products, but customers can pay a one-off fee for bite-sized advice. An Investing for your goals session costs £295 and a full portfolio health check is £495.

The site also now features an online risk assessment questionnaire and digital goal planning tools are being introduced, with the first a retirement planner.

Standard non-Isa dealing: Charges are the same.

Who is it good for? BestInvest's relaunch has given it a fresh look, bringing lots of useful information and help to the forefront. The thing that makes it stand out from the crowd is free financial coaching and the bite-sized advice options.

Those buying shares, investment trusts and ETFs benefit from a £4.95 dealing fee, which is lower than most. The ready-made portfolios offer an easy hands-off route into investing at a reasonable cost. [More details on BestInvest*].

Charles Stanley Direct*

The broker's online platform Charles Stanley Direct platform has a 0.35 per cent annual charge on fund holdings, above £250,000 of fund holdings charges begin to step down.

There is also a 0.25 per cent charge on investment trust or share holdings, with a minimum of £24 and maximum of £240 per year. This is removed monthly if you trade at least once in that month.

A Sipp costs £100 plus VAT per year but this fee is removed if you have more than £30,000 across all the broker's online platform services.

Fund dealing is free, but investment trust and share dealing will cost £11.50 and there is no regular investing option for this.

Investors holding individual bonds and overseas shares must pay £30 per year per holding.

Who is it good for? Active fund investors get a good deal at Charles Stanley with a low annual fee and no buying or selling charges. This is also a decent Sipp option for those with more than £30,000, who can then avoid the extra fee for pensions.

Those buying and holding investment trusts and shares can also do well if they trade each month and lose the platform fee, but that needs to be weighed up against £11.50 dealing charges adding up and the lack of a cut-price regular monthly investing option.[More details on Charles Stanley Direct*]

Vanguard

US giant Vanguard has set up a UK investing platform but you can only buy its funds.

It is cheap with a 0.15% per year fee and has no costs for buying and selling. You can use this to buy Vanguard's simple and cheap passive funds, its active range, or its all in one LifeStrategy funds that invest in shares and bonds around the world.

Who is it good for? If you are looking for a simple and low cost investment platform, Vanguard is a good choice. You only get its funds but the firm's trackers and ETFs are among the best in the business - this is a particularly good option for those looking to start out with LifeStrategy funds.

Before you pick an investment platform

Before you make a final decision, think about the points above on picking the best platform, what you want to invest in: funds, ETFs, investment trusts etc, and how you want to do so: lump sum, buy-and-hold, regular investing or trading.

Don't forget that there is a delicate balancing act between administration fees and dealing charges.

Do your own research, sit down and work out how the DIY investing platforms you favour compare against each other. This homework will be worth it in the long run.