An online brokerage account is the basic requirement for private investors who want to trade stocks and other securities on the stock exchange in the UK. Compare the best providers 2020 in the online broker UK comparison by TradeBase.pro.
You can find out the weighting of the evaluation criteria using the mouseover function above the product grade. The product sequence is created exclusively by the evaluation algorithm. It can also be adjusted at your own discretion using the filter selection. The products are graded in close cooperation with the experts in the finance department of TradeBase.pro.
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What is a securities account in UK?
A custody account in the United Kingdom, also known as a securities account or a stock account, is a bank account. Private investors need this in order to trade shares or other securities on the stock exchange. The account holder’s securities are posted to the custody account and purchases and sales of securities are processed. Nowadays, custody accounts are mostly digital, which also applies to trading in securities.
How does the depot comparison work?
Acquiring and managing securities costs money and reduces returns. If you do not want to pay unnecessary costs and costs for your custody account, you’ve got to compare the offers from banks, direct banks and online forex brokers. The securities are held in custody as special assets in a custodian bank – separate from the assets of this bank. Our portfolio comparison offers you the chance to pick a securities portfolio supported your personal preferences.
Step 1: Quick check
In the quick check, you simply enter the average volume of an order and therefore the number of order orders per annum. You can also specify whether you simply want offers which will be ordered directly online or whether you also want to consider other products. You’ll get the result by clicking on “Find the best offer with bonus”.
Step 2: Prioritize conditions
You can also use the slider under “Show more criteria” and choose for yourself how heavily the prices and the service should be weighted. Use the possibility of further filter options, because this guarantees you the best possible transparency and therefore the certainty that you have found the proper depot for you personally in our comparison.
Step 4: Inform about conditions
“Details” will take you to the overview page of the chosen product. Here you’ll find all information about the services and conditions.
Step 5: Apply for an online broker
When you have selected an offer, you’ll click on “To the provider” to go to the provider’s website, where you can conveniently apply for the deposit.
What distinguishes a good custody account?
A cheap deposit account is characterized by the actual fact that there are as few additional costs as possible – in any case, you want to extend your money. this implies that the bank shouldn’t charge any fees for custody account management. Also, to be considered are the costs incurred if you would like to invest larger sums or invest multiple times: The order fees shouldn’t be too high because investors have to earn all additional costs with their own investments.
Low investment sums
In addition, it should be possible to save smaller amounts in monthly instalments. Not everyone has the chance to invest large sums of money. Again, the fees shouldn’t be above average.
Free sample deposit
A good custodian bank should provide investors with a model portfolio with which they will practice risk-free.
A large selection on stock exchanges and funds
With a custody account with a good online broker, investors are flexible: additionally, to UK trading venues, investors should therefore also have access to international stock exchanges and therefore the selection of funds should be as broad as possible. Whether bond or assets, ETFs or index funds – investors have access to various funds through good online brokers.
Are there any risks with custody accounts?
Should the bank go bankrupt, the securities portfolio of the investors isn’t affected. Therefore, securities aren’t subject to the deposit protection of the banks.
In order to carry out the orders and credit the proceeds from the sale of a security, investors also need a clearing account – usually a current account.
By the way: the only three requirements for participation in the securities business are the total legal capacity of the investor, a custody account – and in fact money that can be invested.
Which custody account is best for me?
The custodian bank with which the account is to be kept depends on the investor’s personal preferences. Should the prices be as low as possible or do you want to keep a summary with the assistance of a private advisor?
If you value a private contact, you’re best off with a branch bank or savings bank. If you already have an account there, the activation of a depot is typically done quickly. This service is incredibly practical – it costs a lot over an online broker. You should also keep in mind that the order fees at many banks increase significantly as soon as you want to invest larger sums.
If you wish to organize your securities transactions anonymously online or by telephone and without a fixed contact person via direct trading. You’ll usually find the less expensive deposit with an online or direct bank. additionally, when investing larger sums, there’s often the advantage that order fees don’t increase with the investment volume, as they’re calculated as a flat rate per order for several offers.
In addition, online brokers usually have in-depth knowledge in specialist areas and may provide particularly extensive information in this area.
The fund custody account may be a special case: it can only be opened with a fund company and only contains the funds of this company.
What are the fees for a custody account?
The kind of costs for a depot are identical everywhere. However, the level of fees charged varies.
Custody fees are the prices for the safekeeping of the securities in the custody account – therefore also referred to as a custody fee. They accrue monthly, quarterly or annually and are independent of online trading site activity. those that do little should pay particular attention to low custody fees when choosing their custodian bank. At direct banks, custody accounts are often kept free of charge. in the case of branch banks, the costs are usually higher, as personal support from an advisor generates costs.
Order or transaction fee
This fee is incurred when buying and selling and is charged by the depository provider in several amounts. If you trade tons, you ought to look particularly carefully when choosing your deposit account. Attention: Order fees calculated as a percentage are more expensive than a fixed price for frequent orders or a higher volume. A flat rate is worthwhile for traders who trade a lot.
The exchange fee includes the broker’s commission and therefore the costs for using the trading venue for every order.
Chargeable additional services
Limit orders are an example of additional services that may be charged. If a trade order is specified with a maximum price at which an order is to be executed, the consideration of the limit costs a fee at some banks. this should be taken under consideration when comparing deposits.
If you would like a true market overview and therefore the best depot offer for you, you would like an individually adaptable and detailed depot comparison. Here you enter your personal preference for service intensity and costs, the amount of planned orders per annum, the average investment amount and other attributes so as to obtain the best securities account for you.
How do I open a custody account?
A deposit application is typically filled out at a branch bank. The bank advisor will help. But the online deposit is also very easy to open – either via the focus deposit comparison, which results in the documents for opening the deposit with a mouse click – or via the homepage of the respective online banks and brokers on which the deposit agreement is found.
Your name, address, place and date of birth, email address and phone number must be entered. Additionally, the applicant is asked about their experience with securities transactions. This self-assessment helps the bank to spot the risk classes in which the investor can invest. for instance, those that are trading bonds, stocks or funds for several years can also be activated for riskier transactions such as futures.
The deposit application form is printed out, signed and sent to the depositary bank by post – it checks the private details.
Branch bank customers can determine from their advisor whether the deposit application has been approved. Anyone with a direct bank or online broker will receive documents for online activation by post. The access number comes with a separate delivery. Video legitimation is even faster: every applicant can enter and verify data from their own PC via webcam. The opening only takes a couple of minutes.
How do I earn money with my deposit account?
The most common method is to buy shares in companies. Shareholders own a small part of the company and generate profit through annual dividend payments. While these payments aren’t compulsory, most companies give their shareholders a share of their profits this manner. Shareholders also make a profit through price gains by selling the securities after the share price has risen.
In addition, investors trade foreign currencies on the stock exchange: In contracts for difference, shareholders rely on the rising or falling price of currencies because of political or economic events.
It is important that your broker informs you of the risks before going public. Because any kind of speculation can produce profits or losses.
How do I cancel my deposit account?
The safest way to cancel is in writing, combined with the request to verify receipt of the cancellation. There are templates for this on the internet. Each bank regulates itself whether notice periods – and which ones – must be adhered to. you’ll read about them in the contractual conditions. If a clearing account has been opened especially for the deposit account, this is usually also deleted in the course of termination. Any credit are going to be transferred to a different bank account; if you change to another bank, the securities will be transferred.
How do i change my depot?
Changing a portfolio is easy: First, you open a portfolio with your newly selected portfolio provider. Banks usually offer a moving service. To use this service you’ve got to fill out a form that authorizes the new bank to transfer your securities to the new custody account.
You can only select individual funds or securities for a transition, or you can have the old custody account closed completely. The court of Justice prescribes: The deposit change must be free of charge.
Nowadays, a depot change can often be done online. Online forms are available for this, during which you’ve got to enter your data and securities account number. Before investors submit the appliance , they need to seal it with a digital signature.
8 tips for online broker comparison
- Investment Objectives
Define your investment goals. This shows which depot is true for you. Only then does a cost ranking make sense.
Reputable custodian banks have a transparent statement of costs. Usually also a model portfolio with which investors can practice their stock exchange transactions risk-free.
Those who don’t fill out the self-assessment when opening a securities account are usually assigned a lower risk class of securities with which they’re allowed to trade.
- Special promotions
Take advantage of special promotions from direct banks and online brokers to save money. Promotions with reduced custody fees, free trades or free buys aren’t uncommon.
Test seals and customer ratings are helpful for evaluating custodian banks. The main target depot comparison also takes them into account.
Choose a bank / broker that’s registered in an EU country. This ensures you European investor protection.
Investors who are often on the go need an app.
- Customer service
Customer service should at least contains an e-mail address and a customer hotline.