A share-dealing account could help you to add value to your portfolio whether you are a new or experienced trader.
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Compare share-dealing accounts
Use our comparison table to find and compare online share-dealing accounts. Evaluate features and costs to find the best account for you.
Open a share-dealing account
Once you've chosen the share-dealing account you want, open it and transfer in the money you plan to use for trading.
Start trading shares
Choose the shares you want and buy them through your account. You're now ready to start trading your shares in response to moves in the market.
Your investments are not guaranteed: shares can fall in value as well as rise, and you may not get back the full amount you put in.
Share dealing is the process of buying and selling shares in publicly listed companies or investment funds. You can use share dealing to build your own investment portfolio.
A share is a unit of ownership in a particular company. Share dealing allows you to buy stock in companies, such Apple, Facebook or Google, and then sell that stock for a profit if its price rises.
A broker acts as an intermediary between you and the stock market. They buy and sell stocks and shares on your behalf to maximise your returns.
There are three types of share-dealing brokers:
These brokers follow your instructions to buy shares - and sell them - without giving you any advice.
These brokers advise you on the best shares to buy and sell but leave the final decision to you.
These brokers take complete control of buying stocks and shares for you based on their expertise.
If you're interested in buying shares online, you need to choose an online share-dealing platform. When you're deciding which platform to buy shares on ask yourself these questions:
How often do you want to trade?
How experienced are you?
How much money do you want to invest?
It's important to think about your own personal needs and goals when choosing a share-dealing platform.
You'll use your trading platform to buy and sell stocks and shares.
Set up the trade: choose the number of shares you want to sell. This could be based on quantity or value. If you want to sell a lot of shares in a company, you have to sell them in blocks - for instance, a thousand shares at a time
Complete the trade: make the order to sell. Once you have done that the transaction is complete and the money from the sale will appear in your trading account
Note that the price you get may be lower than the original price.
Before you open a share-dealing account and start investigating how to buy stock, you need to think about costs.
Charge per trade
Each time you buy or sell a stock, you have to pay a charge-per-trade fee. The amount varies depending on your account provider.
This is a discounted charge-per-trade fee that is triggered after you make a certain amount of trades. It's worth looking for if you trade a lot.
Charge made for moving money in or out of your account. Some accounts don't have platform fees but have higher per-trade fees instead.
When you're buying and selling shares, you need to think carefully about what you choose to invest in based on:
How much do you want to invest?
This is the amount of money you've set aside for investing. You should never invest more than you can afford to lose.
How long do you want to invest?
This is the amount of time you're willing to leave your money invested between buying and selling stock.
How much risk do you want?
Risk is the uncertainty you face when making an investment. It's the size of potential gain versus the potential loss.
If you're looking for help on which companies or stocks to invest in, it's a good idea to get the advice of a financial adviser or broker.
You will not need to pay tax on your profit or purchases if your shares are held in an ISA. If they are not, you may need to pay two forms of taxes.
Stamp Duty Reserve Tax (SDRT). This charges 0.5% of the trade's value if you buy UK shares that are settled through CREST (the UK electronic settlement system).
Capital Gains Tax (CGT). When you sell your shares and make a profit, you are required to pay tax on the gains you made. The rate at which CGT is charged depends on which income tax bracket you are in and how much money you make from the sale.
In the 2021/22 tax year ...
Basic rate taxpayers pay 10 %
Higher and additional rate taxpayers pay 20%
However, for every tax year you receive a capital gains tax-free allowance. For the 2021/22 tax year the capital gains tax-free allowance is £12,300¹.
Your gains would need to exceed this in order for you to be required to pay capital gains tax on your profits from any trades you make.
There are a couple of ways you can earn money by share dealing.
Growth. That's when the shares you own increase in value and you can sell them at a profit.
Dividends. These are paid out a few times a year, based on company performance. Remember that not all shares offer dividends. If yours do, the amount they'll pay out is based on how many shares you own.
When it comes to investing in shares, patience is a virtue. Keep your emotions in check and avoid making snap decisions. Do your research and and execute your plan, and if it doesn't go your way, look at things objectively and reassess. If you're unsure seek the help of an independent financial advisor.”Salman Haqqi, Personal Finance Editor
Think long term
Unless you're seasoned trader, you should typically invest for at least five years. This protects you from any fluctuations in the market that might see you lose your money. If you think you'll need to access your money in that time frame, investing in stocks may not be a feasible option for you.
Don't put all your eggs in one basket
It's always wise to spread your investments across a variety of different companies and industries. That way your returns aren't dependant on the performance if a single stock or commodity.
Don't worry about market dips
The stock market can dip drastically at times due to a number of external factors. But that's not a reason to panic and sell because everyone one else is. When investing in shares, patience is a useful virtue.
There's no one best share dealing account that you can opt for. Different accounts offer different feature and you should choose one that's best for your specific circumstances and investing goals.
A share dealing account is one that you use to buy and sell shares. Different accounts offer different features have different costs, so pick one that suits your needs and your investment goals.
Yes you can buy one share of stock. These days it's also becoming more common for people to buy fractions of shares i.e. a piece of a single share.
Yes, but only if the company offers a mobile app. You still need to open an account online and add money before you can make any trades on the app.
Yes, but you are usually charged for transferring shares from each company, e.g. if you own shares from two companies, you pay two lots of charges.
The thrills and spills of the stock market can be exciting and lucrative, but sometimes it can be hard to know where to start with investments. Ask yourself these 7 questions to work out how and where to invest your money.Read more about questions to ask before investing
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¹According to information on gov.uk
Last updated: 28 June 2022