eToro vs Freetrade: which offers better value to its customers?

3 min Read Published: 24 Jun 2022

eToro vs FreetradeA growing trend in trading, whether in stocks and shares or cryptocurrencies, has led to investment platforms like eToro and Freetrade* also gaining in popularity. In this article we compare the two options, looking at their similarities and differences to help you decide which is the better option for you.

We also show you how to get a free share worth up to £200* with our reader offer with Freetrade (capital is at risk).

eToro vs Freetrade - which is better?

eToro Freetrade
Services Investing in shares, ETFs, commodities, currencies, CFDs and cryptocurrencies

CopyTrader

CopyPortfolios

Virtual portfolios

Fractional shares

eToro Academy

Investing in shares, ETFs and investment trusts

Fractional shares

User forum

Products No ISA or SIPP accounts available

eToro CFD trading account

eToro Money account

ISA, General Investment Account, SIPP
Minimum investment $10 USD £1
Fees Buying and selling - free

Currency conversion fee - 0.50% for every deposit

Inactivity fee - $10 USD per month after 1 year of inactivity

Withdrawal fee - $5 USD per withdrawal (minimum $30)

Basic account buying and selling - free

Freetrade Plus - £9.99 per month

ISA with basic account - £3 per month

ISA with Freetrade Plus - free

SIPP - £9.99 per month

Customer reviews (Trustpilot) 4.2/5.0 4.3/5.0
Money to the Masses offer n/a Receive a free share worth up to £200* when you sign up for a basic account.

eToro vs Freetrade - services

Both eToro and Freetrade offer low-cost ways to trade in shares, ETFs and investment trusts. eToro also allows investors to access commodities, currency and cryptocurrencies, as well as CFDs. While Freetrade has a useful user forum, eToro has its eToro Academy, which provides education and guidance, which is appropriate considering the riskier nature of some of the asset classes it offers. It also has CopyTrader and CopyPortfolio options, which, in effect, let you mimic the choices made by experienced and successful investors. These popular features are particularly good for beginners, who may be overwhelmed by the level of choice available.

eToro vs Freetrade - products

If you are looking for a tax-efficient way to manage your investments, Freetrade has the upper hand over eToro as it offers both ISA and SIPP wrappers. Meanwhile, eToro only offers a standard account, or upgrades that offer CFD trading or a Money account to make withdrawals from. There has been no suggestion to date that eToro plans to include ISAs or SIPPs within its range in the foreseeable future.

The ISA and SIPP from Freetrade do come at a cost, with a £3 monthly fee for the ISA and £9.99 monthly fee for the SIPP. The charge for the ISA is waived, however, if you upgrade to a Freetrade Plus account, which costs £9.99 per month.

eToro vs Freetrade - minimum investment

While Freetrade allows investors to open an account with as little as £1, eToro requires an initial minimum deposit of $10 USD. It is also worth noting that while Freetrade doesn't charge a withdrawal fee, eToro has a fee of $5 USD for each withdrawal, with a minimum withdrawal of $30 USD.

eToro vs Freetrade - fees

Freetrade and eToro have both designed their business models around the concept that they provide commission-free buying and selling, keeping costs to a minimum for investors. However, in addition to eToro making money from the spread between the offer and bid price on assets, each also makes money in other ways. For eToro that is through additional charges, such as inactivity fees and withdrawal fees, while for Freetrade it's through its charges for ISAs and SIPPs and the fee to upgrade to Freetrade Plus.

eToro vs Freetrade - customer reviews

According to customer review site Trustpilot, eToro is ranked "great" overall by its 16,000 reviewers, while Freetrade is "excellent" based on its 2,600 reviews. Many of the positive reviews of eToro centred on the fact users are assigned an account manager and this helps with navigating the available features and resolving any problems. Freetrade, meanwhile, was praised for its low cost and usability.

Summary: eToro vs Freetrade

eToro has become a popular option for those looking to invest in "alternative" asset classes, such as cryptocurrencies and CFDs, who like the extra support they get from the eToro Academy and, crucially, from the feature that allows them to copy other investors' portfolios. A large proportion of that audience is perhaps willing to overlook the lack of an ISA or SIPP and the fact there are additional fees, including $5 USD to make a withdrawal.

While Freetrade* doesn't have as much investment choice available, it does have both an ISA and a SIPP, which makes interest and dividends tax free. While both the ISA and SIPP do attract a fee (although this can be avoided with the SIPP if you upgrade to Freetrade Plus), there aren't the additional charges for withdrawals or currency conversions as there are with eToro.

For more details on both platforms read our Freetrade review and eToro review.

 

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