Latest news with #Trading212
Telegraph
08-06-2025
- Business
- Telegraph
Cash savers exposed to risky investments by popular Isa providers
Have you or a loved one lost money trading CFDs or other complex financial products? Get in touch at money@ to share your stories. Cash savers attracted by competitive interest rates are being exposed to high-risk investment products by popular Isa providers, experts have warned. Two popular Isa providers, Trading 212 and IG Group, offer a product that results – according to their own research – in the majority of investors losing money. Contract for differences, or CFDs, are complex and highly risky trading products that allow investors to speculate on the price movement of an underlying asset without actually owning it. Traders can also use leverage to boost their potential winnings, but this in turn raises the chances they will lose money. According to trading platform Trading 212, 77pc of its retail customers lose money when trading spread bets with CFDs. IG pegs its own figure at 71pc. Trading 212 is a popular savings and investment app, with its cash Isa and stocks and shares Isa promoted across personal finance websites including MoneySavingExpert and Which?. The app pays 4.35pc interest annually on uninvested cash in its stocks and shares Isa. This figure was 4.6pc until recently, just shy of the top-paying cash Isa at 4.85pc. Trading 212's cash Isa, meanwhile, pays just 4.1pc, meaning its customers are better off keeping their money uninvested in its stocks and shares Isa. Yet savers with a stocks and shares Isa who opt not to invest and solely earn interest on cash may be chided by the following notification: 'Keep your benefits active. We noticed you haven't traded for a while, yet you are still earning interest on your cash. 'We wanted to remind you that your Trading 212 account is primarily an investment account. It's designed for investing, rather than for holding cash as in a traditional savings account.' IG – another trading platform that primarily offers high-risk products such as CFDs – offers a stocks and shares Isa that pays interest of 4.25pc on uninvested cash. Savers that signed up in May could earn a market-busting 8.5pc, but they are forced to trade to earn the cash interest rate. Savers may also be unaware that interest paid on these savings is not necessarily earned in the traditional sense, and comes with fewer protections. Those who opt into earning interest on uninvested cash see their money – at least in part – invested in qualifying money market funds. While these funds are low-risk, cash held within them is not covered by the Financial Services Compensation Scheme, unlike the interest offered for cash Isa savers. Trading 212 customers with a cash or stocks and shares Isa will also frequently see the CFD section of the app when switching between their accounts, or accessing menu screens. Darius McDermott, managing director of Chelsea Financial Services, said: 'Trading 212 has built much of its platform on its cash [Isa] product. You get into the market with one competitive product and then transfer your customers to other kinds of products.' Since IG launched its stocks and shares Isa in 2014, it has seen a 175pc increase in active clients, according to analysis of its data by investment platform Lightyear. Holly Mackay, founder of independent financial platform Boring Money, said: 'Trading 212 [has] had success in attracting and engaging new investors – whether through cash Isas or just better apps and user experience than traditional players. 'This better digital experience combined with very low costs – in some cases no costs at all – has seen [these platforms] add huge numbers of new customers.' In line with Financial Conduct Authority (FCA) rules, if users opt to start trading CFDs in the Trading 212 app, they are warned that '77pc of retail investor accounts lose money when trading with this provider'. Before they can start trading CFDs, users must also answer just five multiple choice questions about the investment product, and disclose whether they have any experience in the area. But these steps can be breezed through quickly, and the platform carries out no other checks to verify whether a customer is a professional with trading experience or not. The FCA's Consumer Duty, which took effect in July 2023, states that firms should aim to continuously address issues that risk causing consumer harm, and must act to deliver good outcomes for retail customers. McDermott said: 'I do not believe that CFDs should be readily available to the majority of retail investors – you should be a professional trader with a high net worth to use them. People who are saving for medium and long-term goals shouldn't be exposed to CFDs.' Mackay added: 'I think we do need to reconsider the disclosures around CFDs and crypto, which are increasingly being offered up alongside much less spicy investment products, but have the potential to go very wrong, very fast.' 'CFDs have their roots in gambling' In April, IG Group completed its acquisition of Freetrade, a popular stocks and shares Isa and investment app, gaining access to the platform's 720,000 customers. Freetrade, like Trading212, is known for its low fees, and is a popular option for retail investors. Freetrade has not previously offered CFDs, and the platform has not hidden its disapproval of such high-risk products in the past. One blog post on the Freetrade website from 2017 warned customers that 'CFDs are hazardous to your wealth'. Another, from 2024, read: 'CFDs have their roots in the UK gambling sector and they are designed for people to take short-term, high-risk bets on price movements in the financial markets. 'Freetrade does not offer CFD margin trading accounts as we believe they do not provide value to investors or encourage the sort of investing habits that usually provide positive financial outcomes over the long term.' A spokesman for Trading 212 said: 'Each product that Trading 212 offers has its own specific target market, i.e. what type of customer we consider the product has been designed for, and how the product will deliver on the customer's expectations. 'In order to ensure those products reach the intended target market, we have created a clear separation between each product type via separate onboarding journeys and distinct accounts. 'Each onboarding journey incorporates specific hurdles, such as risk tolerance, investment objectives, experience, knowledge tests and vulnerability assessments to ensure the customer is aware of the product risks and sufficiently capable, both in knowledge and financial resilience, to accept those risks. 'If a prospective client does not meet the requisite thresholds, they will not be able to use the product. This is in line with the FCA's Consumer Duty.' A spokesman for the FCA said: 'All financial promotions must be fair, clear and not misleading. Trading platforms must make sure that their customers can make well-informed investment decisions by providing appropriate risk warnings.'
Daily Mail
27-05-2025
- Business
- Daily Mail
Boost your cash Isa rate with tweaks that won't cost you a penny: SYLVIA MORRIS
The cash Isa is now a better product for savers than it has been in its 26-year history – but few of us use them to their full advantage. Just a few simple tweaks in the way you save can seriously boost the interest you receive without having to put aside a penny more. For example, many don't take advantage of the flexibility that Isas now offer, which means you can withdraw cash and add it to your balance within the same tax year without it eating away from your allowance. That flexibility means you don't have to restrict yourself to depositing money that you are sure you won't need to access – you can even put in money that you are likely to need safe in the knowledge that you can withdraw and replace it again with ease. You can also have multiple Isas within the same tax year – so long as you don't exceed your overall allowance. But many savers do not take advantage and instead limit themselves to one Isa per year, which means they may not be getting the best rates overall. It's not surprising that many miss out. Only around half of the top Isa payers offer flexibility and often make it hard to find out whether they do – hiding it in pages of terms and conditions. Among those offering flexibility are Trading 212, Ford Money and Vida Savings. Providers that let you open more than one include Aldermore, Charter Savings Bank, Nationwide, Newcastle, Paragon, Vida Savings and Zopa. I'd urge you to enjoy the flexibility and freedoms that the current rules afford you while you can. After all, after years of simplifying the Isa to make it more user friendly, the Government seems intent on reversing progress and making them more restrictive once again. Chancellor Rachel Reeves looks set to cut the cash Isa allowance so that you can save just £4,000 of your £20,000 allowance in cash – with the remainder in shares. Banks, building societies and the Daily Mail's Hands Off Our Cash Isas campaign are fighting your corner to keep the allowance intact – but the Chancellor has failed to promise that cash Isas are safe. Eleven years ago on July 1, 2014, the Treasury said it was making the cash Isa 'a new simpler product'. It did this by giving us a single Isa allowance that we could split how we choose – putting it all into cash or shares or a combination of both. Before then you could only put half the allowance into cash and if you didn't want to invest in shares you just lost that part of the allowance. Flexibility and the ability to open multiple Isas has improved the product since. What a great shame that we're about to go into reverse. Nationwide to pay fresh £100 bonus Tomorrow, Nationwide reveals how it did in its last financial year to the end of March. Our largest building society is expected to have done well enough to announce another £100 Fairer Share payment for this year to eligible members. It comes on top of the £50 'thank you' payment that went out to 12 million members after its takeover of Virgin Money last October. We will also learn exactly who qualifies. Last year, many savers and mortgage holders missed out because they didn't have a current account with Nationwide. Virgin Money customers will miss out, even though they have been owned by Nationwide since the autumn, because they are not members of the society.
Daily Mail
27-05-2025
- Business
- Daily Mail
What is eToro - and is it a good option for UK investors?
eToro debuted on New York's Nasdaq stock exchange in May 2025 after raising a bumper $310 million in its initial public offering (IPO). The platform has been popular with British investors for some years and recently launched a full do-it-yourself stocks and shares Isa in the UK. Amid the buzz around eToro's roaring IPO and Nasdaq debut, we delve into whether the platform is a solid option for those who want to choose their own investments. eToro* and close rival Trading 212* both feature in our roundup of the best investing platforms. What is eToro? eToro* is a trading and investing platform, started in Tel Aviv, Israel, that landed in the UK in 2013. eToro made a name for itself as a platform for share investing and buying cryptocurrency. It experienced a surge in popularity in the UK after it introduced commission-free investing for stocks in 2019. It was also buoyed by market volatility during the coronavirus pandemic. It bills itself as a 'social trading network', with features such as the ability to copy other traders and a news feed that works much like a social media platform. This allows investors to follow certain traders and discuss specific investments. While eToro has switched focus to stocks in recent years, roughly 25 per cent of eToro's revenue in 2024 was still tied to cryptocurrency according to its CEO, Yoni Assia. This is Money says: eToro's social features are a selling point and can help novices learn from more experienced investors. But you should understand the risks of investing, researching the people you follow and their underlying investments carefully. Their investment goals, time horizon and risk tolerance may be very different to yours. What accounts does eToro offer? UK eToro users can open these accounts: eToro investment account: A standard account for buying and selling investments with no tax-efficient wrapper, meaning your investments are subject to dividend tax and capital gains tax. eToro Isa: Both managed and do-it-yourself options in a tax-free wrapper, offered in partnership with Moneyfarm*. eToro GBP Money account: An e-money account that sits alongside your investing account and allows you to deposit, hold and fund trades in your preferred currency. You can get an eToro debit card that allows you to spend money from your eToro account. eToro launched its do-it-yourself stocks and shares Isa in February 2025 in partnership with Moneyfarm, an online wealth manager. This gives eToro users the opportunity to pick their own investments and hold them within a tax-free wrapper. Prior to this eToro users who wanted to open an Isa could only choose a managed option, which is also powered by Moneyfarm. This is Money says: It's great that eToro now offers a DIY stocks and shares Isa, allowing those who like to pick their own investments to do so within a tax-efficient wrapper. But keep in mind this is powered by Moneyfarm, a separate provider. eToro also doesn't currently offer a pension. If you want to open your own DIY pension read our pick of the Best Sipp providers. What can you invest in through eToro? eToro initially became known as a platform for trading in CFDs and later cryptocurrencies. CFDs are very high risk and This is Money recommends investors avoid them as the vast majority lose money. Over the past five years or so, eToro pivoted towards offering more traditional investments, allowing investors to own stocks. Through eToro you can invest in these asset classes: eToro's standard account doesn't give you the ability to invest in investment funds, which are a fundamental part of many investment portfolios. But you can invest in funds through the eToro DIY stocks and shares Isa, because the account is powered by Moneyfarm, a separate provider. You should research eToro's available investment options carefully. For example, owning shares is relatively straightforward. You buy the underlying stock in your name, meaning you own part of the company and can potentially profit from its growth. eToro gives you the option to own shares in this way. However it also allows you to hold CFD stock positions. A CFD is a 'contract for difference' and doesn't give you ownership of the underlying asset. Instead, CFD trading allows you to bet on the stock's price movements and use leverage, which is basically a form of borrowing that can both increase returns and magnify losses. CFDs should be avoided. When it comes to cryptocurrencies the Financial Conduct Authority (FCA), the UK's financial regulator, believes them to be high risk. The asset class is largely unregulated and very volatile. eToro has lots of educational resources to help you get to grips with investing. These include guides, videos and podcasts, plus courses that are built around particular topics such as macroeconomics and building an investment portfolio. This is Money says: eToro states that 61 per cent of accounts lose money when trading CFDs on the platform and cryptocurrencies are high risk and volatile. In our opinion it's best to stick to the mantra to only invest in what you understand. Unless you're very experienced in the complex financial instruments and asset classes available on eToro, it's a good idea to avoid CFDs and stick to stocks and shares. What are eToro's fees? eToro is a cost-effective investment platform. There are no account opening or management fees and it doesn't cost you anything to withdraw money to another account. It doesn't charge commission when dealing stocks and there are no fees for holding your investments. There may be fees for other types of trading such as CFDs, cryptocurrencies and futures. But again consider avoiding these investments unless you're very experienced and understand how they work, due to the risks involved. There are no extra fees for using social features such as copy trading. You'll only pay fees if there are any involved in the investments made by the user you're replicating, as if you were investing in them manually. An eToro Money account allows you to deposit, hold and fund trades in both GBP and USD. There's a foreign exchange charge of 0.75 per cent when converting GBP to USD. This is Money says: eToro is a good option for investing at little cost – its fee-free structure rivals competitor Trading 212*. But its foreign exchange charge is relatively high at 0.75 per cent – in comparison, Trading 212 charges 0.15 per cent. Is eToro safe? eToro is regulated by the Financial Conduct Authority (FCA) in the UK. It's also registered with the FCA to offer cryptocurrency services under the UK's money laundering regulations. Crypto is not regulated in the UK, so carries no protection. eToro Money is an e-money account and this is also authorised and regulated by the FCA, but funds in eToro Money aren't protected by the Financial Services Compensation Scheme (FSCS). That being said, as with other e-money providers eToro holds your funds in a separate safeguarding account. This means if the firm went bust you should get your money back, minus the costs of sending it back to the UK – for example international transfer fees. In terms of cybersecurity, eToro says that client data is protected under SSL encryption. You should make sure you're doing all you can to protect your account including: using a strong, secure password that's unique to your eToro account switching on two-factor authentication (2FA), which gives you an extra level of security when logging in installing updates to your apps and operating systems as soon as they're available using antivirus software This is Money says: eToro is a well-established investment platform that's regulated in multiple countries, which means it should be safe to use. However this doesn't mean you won't lose money. You should always understand what you're investing in and be prepared for your investments to both rise and fall in value. Compare the best DIY investing platforms Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you. When it comes to choosing a DIY investing platform, stocks & shares Isa, self invested personal pension, or a general investing account, the range of options might seem overwhelming. > This is Money's full guide to the best investing platforms Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. When weighing up the right one for you, it's important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs. We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide to the best investment accounts. Platforms featured below are independently selected by This is Money's specialist journalists. If you open an account using links which have an asterisk, This is Money will earn an affiliate commission. We do not allow this to affect our editorial independence. Etoro* Free Stocks, investment trusts and ETFs. Limited Isa, no Sipp. Not available Free n/a n/a More details Fidelity * 0.35% on funds £7.50 per month up to £25,000 or 0.35% with regular savings plan. Free £7.50 Free funds £1.50 shares, trusts ETFs £1.50 More details Freetrade * Basic account free, Standard with Isa £5.99, Plus £11.99 Stocks, investment trusts and ETFs. No funds Free n/a n/a More details Interactive Investor* £4.99 per month under £50k, £11.99 above, £10 extra for Sipp Free trade worth £3.99 per month (does not apply to £4.99 plan) £3.99 £3.99 Free £0.99 More details InvestEngine * Free Only ETFs. Managed service is 0.25% Not available Free Free Free More details iWeb Free £5 £5 n/a 2%, max £5 More details Trading 212* Free Stocks, investment trusts and ETFs. Not available Free n/a Free More details
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The Independent
22-05-2025
- Business
- The Independent
Meet Trading 212's Ivan Ashminov, the entrepreneur disrupting the world of UK finance
SPONSORED BY TRADING 212 The Independent Money channel is brought to you by Trading 212. Ivan Ashminov has cause for celebration. His saving and investment platform Trading 212 has just passed a landmark £25bn worth of client assets under administration. Not that Ashminov, 45, the co-founder and chair, is in the mood to crack open the bubbly and take it easy – he is too determined and focused for that. The rise of his fintech company is remarkable. Trading 212 now serves 4.5 million customers globally, including 3 million in the UK – more than the long-established UK industry players combined. It is by some margin the fastest-growing such site in the UK, a genuine disruptor. By pioneering zero-commission and fractional share investing across the UK and Europe, Trading 212 has transformed access to the financial markets. Clients have been able to invest without facing the high fees that have historically acted as a deterrent. Accelerating current growth is the firm's high-interest cash ISA, which allows savers to maximise earnings on their savings through a tax-efficient and competitive rate. In addition to investment and savings products, the company has launched the Trading 212 Card, which offers 1 per cent cashback on all purchases and zero foreign exchange fees. 'People come to us because they pay absolute zero in trading commissions,' says Ashminov. The fees they do charge are small, typically three times below the usual industry rate. 'We make our money by charging small fees on high volumes,' he adds. On other figures, he is more guarded. 'I don't want to say too much because our competitors want to know – they are desperate to know how we're doing, to benchmark against us.' Unlike some fintech challengers, Trading 212 is registered in London and pays its taxes in the UK. 'We don't do offshore. The UK is our prime market; this is where we're headquartered.' A number seemed good and 212 was the area code for Manhattan, which signalled Wall Street It is 10 years since he brought his operation to the UK from Sofia, Bulgaria, where he grew up and started the business. 'Back then we were 100 people in total, now we're 650 with 130 in London, near the Bloomberg building.' The rest are based in his native country, developing software and handling customer services, and there are offices elsewhere in Europe – including Dusseldorf, Berlin and Cyprus – and in Australia. His success is down to a relentless fascination with technology and its ability to transform. Ashminov is a self-confessed computer geek, although he does not fit the stereotype with his wavy black hair, slim jeans, casual jacket and grey, laceless trainers. Neither, if you passed him on the street, would you for a second suppose he is responsible for shaking up one of the most staid and traditional of sectors. 'From the age of 12, I was hooked on computers,' he says. He would sit in his bedroom, even before the internet really took off, and examine dial-up modems and understand how they worked. 'I was looking for network computing even before we had it,' he says, smiling and shaking his head at the memory. 'Then, I spent years online, learning about coding. That was when not many people around me had computers. I was completely self-taught.' He studied computer science and maths at Sofia University, where he shone. 'During my second year, it was obvious I was progressing faster than the curriculum allowed. I became a technical assistant to the professor. I was an expert in JavaScript, but increasingly, there was not much for me left to learn on the academic side. What I did want to study was how it could be applied.' At the time, he regretted not being older. 'I wanted to get into dotcom but the first wave was passing me by, I was frustrated at reading about what was happening in the US.' He went into selling software development, creating websites and management systems. Then he struck up with Borislav Nedialkov, who became his business partner and Trading 212 fellow founder. Nedialkov worked in a small brokerage, serving CMC Markets in London. 'We saw CMC and wondered if we could create a trading platform for ourselves. I was searching for something to build and I wanted to make trading doable. It took six months before we were up and running. I was 24 to 25 years old, still in Bulgaria. Our beginnings were very humble.' But, he says, he knew he was onto something good from the very beginning. 'Trading platforms were usually very expensive to develop. They were complex and expensive to operate, especially for people who were not good with tech. I decided we would change it; we would enable people to simply click and load and use our site. To do that, we had to sacrifice some features, but we asked ourselves, why are we running platforms made for software professionals? Ours was to be accessible for the ordinary person.' They required an identity, so he looked at available domain names. 'I didn't want to spend much money. I thought it should be called 'trading and something'. A number seemed good and 212 was the area code for Manhattan, which signalled Wall Street. Plus, it was the name of my favourite eau de toilette by Carolina Herrera.' He pauses. 'We didn't exactly overthink it,' he says, laughing. He read the standard textbooks on corporate branding but did not want the name to determine the shape and future of the business. 'It had to be about what we offered, which was a simple, easy-to-use savings and investments platform. Our mission was and is to unlock wealth-building for everyone. We're committed to reshaping the future of personal finance by breaking down barriers and delivering market-leading tools for everyday investors or savers.' He sticks to two guiding principles. 'One, there is nothing you can't do, besides trying to be really good and not allowing yourself to be comfortable. You must always be on edge and demanding more. Two, don't waste time talking to everyone. We don't believe in hyping ourselves up and hoping to meet expectations, we don't shout about ourselves.' Trading 212 is continuing to expand, and he is exploring AI and its potential. 'I've gone back to coding for the first time in many years, seeing how AI can help customers make informed, verified decisions about their financial planning. We're testing features, building prototypes.' Despite the 212 phone prefix, he has no immediate plans to launch in the US. 'There is so much to do, here in the UK and in Europe and in Australia. To go there would be too distracting right now. It's also fiercely competitive.' Besides, he says: 'The US might be leading fintech but thanks to us and the developments we're making, our clients have no reason to envy the US.' He has three young children and when he is not with them or at work, he likes to walk. 'I go for intense walks. I think as I walk and I take photographs because I like the awareness they bring.' Trading 212 is surging, but he says: 'I'm not stopping. I'm very cautious, I'm not celebrating our success. I know how fragile it can be.' The champagne is for another day.
Scotsman
22-05-2025
- Business
- Scotsman
Trading 212 becomes UK's fastest-growing savings and investment platform
The fintech company has secured over £25 billion in client assets under administration | No Credit Trading 212 has officially become the UK's fastest-growing savings and investment platform. Sign up to our daily newsletter – Regular news stories and round-ups from around Scotland direct to your inbox Sign up Thank you for signing up! Did you know with a Digital Subscription to The Scotsman, you can get unlimited access to the website including our premium content, as well as benefiting from fewer ads, loyalty rewards and much more. Learn More Sorry, there seem to be some issues. Please try again later. Submitting... Described as a significant milestone, the fintech company has secured over £25 billion in client assets under administration and a thriving community of 4.5 million clients globally. By pioneering zero-commission and fractional share investing across the UK and Europe, Trading 212 has transformed access to the financial markets. Millions of people have been empowered to invest without facing the high fees that have historically been a barrier to entry. Further fueling this growth is the platform's high-interest Cash ISA, which enables savers to maximise earnings on their savings through a tax-efficient and competitive rate. In addition to investment and savings products, Trading 212 recently launched the Trading 212 Card, currently offering 1% cashback on all purchases and zero foreign exchange (FX) fees It makes it a powerful and cost-effective tool for everyday spending at home and abroad. 'Our mission has always been to unlock wealth building for everyone,' said Ivan Ashminov, co-founder and chairman of the board of Trading 212. 'Reaching this scale is a testament to the trust our clients place in us and to the value we bring through innovation, accessibility, and transparency.' With continued momentum, Trading 212 remains committed to reshaping the future of personal finance by breaking down barriers and delivering market-leading tools for everyday investors or savers. About Trading 212 Trading 212 is a fintech company on a mission to unlock wealth-building for everyone. Known for disrupting the industry with zero-commission investing, intuitive technology, and innovative financial products, the platform offers stocks, ETFs, savings accounts, and debit cards to millions of clients across the UK and Europe.
