Beginner investors looking for an easy way to get started without breaking the bank may be considering investing via a flexible, hybrid platform such as InvestEngine, or an app-based platform such as Freetrade*. Both offer a relatively low-cost way to invest and can simplify the process for beginners wanting an easy route into investing. They may also be attractive for some more experienced investors who want to take advantage of introductory offers or try a new platform. In this article we weigh up the key features of both InvestEngine and Freetrade to help you pick the best option.
InvestEngine vs Freetrade - which is better?
| InvestEngine | Freetrade* | |
| Services | 10 Managed growth portfolios (Note: Growth Portfolios are temporarily unavailable. InvestEngine is making improvements to its portfolio-building questionnaire)
Free DIY investing service with access to more than 830 ETFs Auto-invest savings plan |
Accessed through a smartphone app
Stock performance information 6,500+ Global equities, ETFs, and investment trusts 28 Vanguard mutual funds (Standard and Plus plans only) |
| Products | ISA, GIA (General Investment Account), SIPP | ISA, GIA, SIPP |
| Minimum investment | £100 (Minimum investment of £10 per week for auto-invest savings plan) | No Minimum |
| Platform fees | 0.25% per annum managed platform platform charge (DIY is free)
0.15% - 0.25% ETF annual charge (the average ETF charge is 0.12% pa within growth portfolio according to InvestEngine) 0.07% market spread (InvestEngine estimate) |
Basic account - Free - FX fees 0.99%
Freetrade Standard - £5.99 per month - FX fees 0.59% Freetrade Plus (Includes ISA & SIPP) - £11.99 per month - FX fees 0.39% All plans include access to an ISA & SIPP |
| Customer reviews (Trustpilot) | 4.7 out of 5.0 | 4.3 out of 5.0 |
| Money to the Masses Offer | N/A | Receive a free share worth between £10 and £100* when you sign up for a basic account and deposit a minimum of £50 (Terms and conditions apply. Capital at risk). |
InvestEngine vs Freetrade - services
InvestEngine is both a robo-advice service and a DIY investment platform. Much like with competitors J.P. Morgan Personal Investing and Moneyfarm*, users can choose from 10 low-cost, diversified managed ETF portfolios (although its managed service is currently closed to new investors). Additionally, InvestEngine gives users the option to take a more active role by picking their own investment funds, combining the managed portfolio of robo platforms with some of the DIY investment options offered by the likes of Interactive Investor*. It is a low-cost DIY platform, though this is reflected in the relatively limited investment range.
Freetrade* also offers a relatively low-cost way to invest, but its key platform selling point is the ability to do so through its app. It claims to simplify the investing process through a stripped-back platform that does away with the calculators, guides or research on offer from bigger names. The Freetrade platform is designed solely for buying and selling shares, ETFs and bonds, so it doesn't offer as many extra services as its rivals, though there are still information and tools for users to find shares, see limited performance data, buy and sell, and monitor their portfolio performance – all through the app. The Freetrade range is wider than other app-based platforms such as AJ Bell Dodl*, offering access to over 6,500 stocks and ETFs on its 'Basic', 'Standard' and 'Plus' plans.
InvestEngine vs Freetrade - products
While both InvestEngine and Freetrade* offer stocks and shares ISAs, General Investment Accounts and SIPPs, the additional wrappers available are limited. Though they have the main products you would expect from an investment platform, the absence of a Lifetime ISA and Junior ISA may mean some investors will be tempted to look at competitors that offer a wider product range, such as Interactive Investor*.
It is worth noting that the Freetrade 'Basic' plan now includes access to its popular Stocks and Shares ISA and SIPP. Investors previously had to upgrade to its Standard or Plus subscription plans costing £5.99 or £11.99 per month.
InvestEngine vs Freetrade - minimum investment
Freetrade's* credentials as a top option for beginners are boosted by the fact that there is no minimum investment. The minimum investment if you want to put in a lump sum is £100 with InvestEngine or at least £10 per week for its auto-invest savings plan.
InvestEngine vs Freetrade - fees
The InvestEngine platform fee of 0.25% per annum only applies to its managed portfolios, though there is an ETF annual charge and a market spread (the difference between an ETF buy and sell price). InvestEngine claims the average ETF charge is 0.12% per annum within its 'growth' portfolio and estimates the market spread to be 0.07% per annum on its ETFs. This brings the total cost of an InvestEngine growth portfolio to approximately 0.44% per annum, which compares favourably to competitors such as J.P. Morgan Personal Investing or Moneyfarm*.
InvestEngine's DIY investment portfolios within a Stocks and Shares ISA or General Investment Account do not have a platform fee, however, investors will still pay ETF charges and a market spread totalling an average of 0.19%.
Freetrade* fees are structured differently to most other investment platforms, including InvestEngine. As the name implies, buying and selling shares is free with its basic account. FX fees are charged at 0.99% and you can earn 1% interest on up to £1,000 of uninvested cash. However, the cost comes in the form of a monthly subscription, should you upgrade to a Freetrade Standard account (£5.99 per month) or to a Freetrade Plus account (£11.99 per month). Upgrading to the 'Standard' account will mean you can get 2.5% interest on up to £2,000 of uninvested cash and you'll be rewarded with lower FX fees, charged at 0.59%. Upgrading to a 'Plus' account means you can earn 3.5% interest on up to £3,000 and FX fees drop to 0.39%.
InvestEngine vs Freetrade - customer reviews
InvestEngine has a Trustpilot score of 4.7 out of 5 based on over 2,500 reviews. Around 83% of reviewers rated it five stars, while 4% rated it with one star. Happy customers mentioned the ease of use and simplicity of the platform. The negative reviews focused on poor customer service experiences.
Freetrade* is some way behind according to Trustpilot, though still rated mostly positively by customers. It is currently at an average of 4.3 out of 5.0 based on just over 7,100 reviews. Of those, 69% gave Freetrade five stars and 13% gave only one star. The good reviews mentioned the ease-of-use and low-cost nature of the platform, while customers leaving poor reviews complained of poor communication and slow transfer times.
Which is best, InvestEngine or Freetrade?
InvestEngine and Freetrade* are both attractive options for beginner investors looking for a low-cost platform that is easy to manage. Both are missing the wide range of products and services that competitors can offer, but they do cover the basics. When it comes to cost, both platforms provide a free DIY investing service. Freetrade does however offer more investment choice with access to over 6,500 global equities, ETFs, and investment trusts, compared to the limited choice of 830+ ETFs with InvestEngine. Freetrade also pays interest on the uninvested cash sitting in your investment account.
For more detailed explanations of each of the platforms, read our InvestEngine review and Freetrade review.
When investing, your capital is at risk and you may get back less than invested. Past performance doesn’t guarantee future results.
If a link has an * beside it this means that it is an affiliated link. If you go via the link Money to the Masses may receive a small fee which helps keep Money to the Masses free to use. But as you can clearly see this has in no way influenced this independent and balanced review of the product. The following link can be used if you do not wish to help Money to the Masses or take advantage of any exclusive offers - Freetrade, Interactive Investor, Moneyfarm, AJ Bell Dodl
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