AJ Bell to slash investing fees and boost savings interest from 1 April – how does it compare to its rivals?

Products featured in this article 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.

AJ Bell will cut dealing charges on its platform and increase the interest it pays on cash balances from April.

Customers will pay a £5 dealing charge for shares, ETFs, investment trusts, gilts and bonds from 1 April, instead of the current £9.95 charge.

Frequent share dealing, for 10 or more share deals in the past month, will cost £3 instead of the current £4.95 charge, while the charge for dealing over the phone will drop to £25 from £29.95.

The charge will remain at £1.50 per trade for buying or selling funds. AJ Bell customers pay a 0.25 per cent account charge a year.

Charges cut: AJ Bell is lowering its dealing charges for shares, investment trusts and ETFs from 1 April 2024

AJ Bell said the changes are due to ‘our commitment to providing our customers with a low-cost and easy-to-use investment platform […] to ensure we continue to deliver great value.’

The stockbroker has also announced changes to the interest it pays on cash balances.

The interest paid on cash balances in Sipps and Junior Sipps will remain at 3.2 per cent for balances up to £10,000. 

Balances between £10,000 and £100,000 will receive 3.7 per cent interest and balances above £100,000 will get 3.95 per cent.

AJ Bell customers with Sipps in drawdown wlll now receive 3.45 per cent interest on cash balances up to £10,000, 3.95 per cent on balances between £10,000 and £100,000 and 4.45 per cent on balances above £100,000.

Customers with AJ Bell stocks and shares Isas, Lifetime Isas and Junior Isas will receive 1.95 per cent on balances

How does it stack up to other platform charges?

Hargreaves Lansdown

The changes make AJ Bell cheaper than rival Hargreaves Lansdown for buying and selling shares, ETFs, investment trusts, bonds and gilts.

Hargreaves Lansdown charges £11.95 for less than 10 deals in the previous months, £8.95 if you had between 10 to 19 deals in the previous month and £5.95 if you had 20 or more deals in the previous month.

Investors pay a 0.45 per cent fee on their total fund investments up to £250,000, 0.25 per cent to £1million, 0.1 per cent to £2million and nothing above that. Shares and investment trusts also incur a 0.45 per cent charge on the entire holding, capped at £45.

Interactive Investor

Interactive Investor customers pay £3.99 to buy and sell funds, investment trusts and UK and US shares. This is on top of a monthly fee plan. 

These start with the £4.99 per month Investor Essentials offer for those with portfolios of less than £50,000.

Above that level, fees are £11.99 and £19.99 per month for the Investor and Super Investor plans, respectively.

Trading in other international shares has a £9.99 fee, except for the Super Investor plan where this is £5.99. Dividend reinvestment is just 99p for all plans and regular investment is free.

Fidelity

Fidelity Share dealing has a flat £7.50 fee and this charge also applies to investment trusts and ETFs. There are no fund dealing charges for buying and selling.

Holding investment funds comes with a 0.35 per cent charge up to £250,000 and 0.20 per cent above that, falling to 0 per cent above £1million.

However, if you are investing small amounts the charging structure is slightly different. 

Fidelity charges £7.50 per month (£90 a year) for portfolios up to £25,000, or the 0.35 per cent rate applies if you have a regular savings scheme set up.

Annual charges are capped at £45 for holding shares, trusts and ETFs.

Freetrade*

Freetrade has fee-free share dealing and offes a wide range of UK and US shares. It has some ETFs and some investment trusts, but nowhere near the range of the bigger platforms.

Freetrade’s Basic plan for a general investment account has no charges, while its Standard plan for those who want an Isa and full range of stocks has a £4.99 per month fee and its Plus account is £9.99 per month, which investors need if they want a Sipp.

Some stocks, including many smaller companies, are only available on Freetrade Standard and above plans.

The Standard Plan gets customers 1 per cent interest on up to £2,000 of cash while the Plus plan gets them 3 per cent interest on up to £4,000. A foreign currency charge of 0.45 per cent applies for overseas stocks.

Trading 212

Trading 212 customers also do not pay any charge for share dealing or holding stocks in a stocks and shares Isa.

There is a 0.15 per cent charge for trades in a different currency to the account. Trading 212 also offers an Isa with no fee but does not offer a Sipp in addition to an Isa.

It offers more than 10,000 global stocks and ETFs, including UK stock market-listed firms.

This post first appeared on Dailymail.co.uk