How to start share dealing

Choose a broker

A broker gives you a platform to buy and sell shares, but the cost of share dealing can be affected by the following:

• How often you buy and sell shares

• How much you spend on shares

• If you want to transfer shares to a new broker

You can choose a broker by how much they charge you for making a trade by using our comparison.

Did you know?

All UK share dealing brokers are legally required to be FCA regulated.

Find a share dealing broker here

Trading costs

You pay a charge for each trade you make, but the number of trades you made in the previous month can affect the price for the following month, for example:

Some brokers charge a percentage fee for each trade instead of a fixed fee. This usually comes with a minimum charge, such as £8.

For example, if the charge is 1% per trade and you buy £200 worth of shares, you pay £8 rather than £2 (1% of £200) for the trade.

Frequent trader

There is usually a fee to pay if you choose a frequent trader account, but it means you can fix the cost of each trade.

Some brokers charge this fee every three months (quarterly), and it costs around £20 plus VAT.

What is a frequent trader account?

Most brokers offer this type of account which is designed to make multiple trades more cost effective.

They do this by charging you a fee, such as £200 a year, then fix the cost per trade to a lower amount compared to their standard trade charges.

Monthly fees

Some brokers charge you a monthly or annual fee for using their share dealing platforms.

This could be a fixed fee such as £1.50 plus VAT per month, or a percentage of your portfolio value each year, such as 0.24%.

Automatic reinvestment

You can choose to reinvest any money you make from share dividends back into more of the same company's shares.

Brokers who offer this feature usually wait until the value of the dividends reaches a certain amount, such as £10, then reinvest it with a charge of around 1%.

Paper statements

If you like having statements sent to you in the post rather than online, there is a usually a cost for this.

The charge can vary by broker, but is usually a fixed fee such as £1 plus VAT for every statement sent to you.

Open an account

Register your details with your chosen broker to start buying and selling shares. You have to provide the following information:

• Full name

• Address (up to the last three years)

• Bank account details

• National Insurance number (if you want to open a stocks and shares ISA)

• Email address

If the chosen broker cannot verify you online, you may need to provide further identification, such as a copy of your passport or driving licence.

Once opened, you can add money to your account using your debit or credit card*.

* Credit card charges may apply.

Buy shares

Once you have money in your account you can search for companies using your broker's share dealing platform, and buy shares.

You can share deal as a day trader and make several trades a day, or buy shares for long term investment.

Transfer your shares

If you have shares held with another broker, and would prefer to have all of your shares with a new broker, you can transfer them.

• Transfer shares in: Most brokers do not charge for transferring shares to them. If they do, compare the cost of trading with them and decide if it is cost effective.

• Transfer shares out: Most brokers charge you for transferring your shares away from them. This fee varies by broker, but can cost you around £25.

Look at the cost of buying and selling shares between your existing and new broker and work out if it is cost effective to switch.

Withdraw your money

There are two ways you can withdraw money from a share dealing account:

Bank transfer

This is usually free and takes three to five working days to get to your account.

Most brokers also offer a same day transfer service for a fixed fee, such as £25.

Can you transfer to an overseas account?

Most brokers allow this, but often at a cost of around £50.

There may also be restrictions of which countries your broker will send money to, so read the terms and conditions of your account if you want to do this.

Cheque withdrawal

It can take three to five working days to get your cheque in the post.

This is followed by the length of time it takes your bank to clear the funds, for example, a further five working days.

Whose name will be on the cheque?

The cheque will be payable to the name on the share dealing account, and there is usually not an option to have it paid to another person.

Close your account

It is usually free to close your share dealing account, but you may need to pay a fee to close any active shares and any transfer costs that apply.

What happens to your account if you die?

The executor of your estate can arrange to close your account and have any shares sold and any remaining funds transferred to your estate.

Most brokers charge a set fee for administering a death on an account, for example £50.