Best Investment Apps U.K.

Disclaimer: The products or services discussed in this article may not be offered by Taurex and may only be listed here for educational purposes.

Determining the best investment app in the United Kingdom (U.K.) can be challenging. People have different reasons, preferences and experiences with investment apps that have worked for them.

In fact, as of 2021, over 130 million people have used investment apps to make their money work for them. The sheer volume of transactions resulted in a $22.8 billion revenue that year.

The investment app trend is expected to rise, especially with the predominance of smartphone users estimated to be over 6 billion worldwide in 2028. 

So, what is the best investment app in the U.K.? 

Let’s discover the best apps, learn more about investing, investment apps, and how to use these computer programs, and dive into apps and the world of investing. 

Types of Money Apps for Investing: How to Use an App to Grow Your Savings

People may say that investing apps are easy to use. Still, there’s a learning curve that beginner investors must overcome. So, before we learn how to use an investment app, let’s first understand the two main types of investing software online. 

Expert-Managed Investment Apps

When you’re a beginner, having someone to guide you or give you financial advice while trading is best. Using an expert-managed investment app allows you to decide how much to spend and where to invest with the guidance of an experienced investor.

Expert-managed investments can help you in fund management, advise you on different investment options and, most importantly, provide investment advice when making crucial decisions. 

Self-Managed Investment Apps

Self-managed investment apps are suitable for people already familiar with investing and who want more control over their investments. Through these apps, you can customise your financial plans from start to finish. 

Here are the investment apps you can choose from if you plan to start investing. 

The list shows apps trusted by thousands of people living in the United Kingdom to manage their investment portfolios. 

• Wealthify: This app lets you create a personalised investment plan, allowing you to decide where to invest and have experts do the rest. Wealthify’s slogan is to make your money work harder. 
• eToro: This popular and commission-free investing and trading platform advertises useful features. eToro has a vibrant community of traders worldwide, which you can join. 
• Freetrade: An appealing, low-cost trading platform for ETFs (exchange-traded funds) and shares. Basic plan accounts do not have a platform fee. Meanwhile, all accounts do not charge a commission on share trading. 

ETFs allow you to purchase a “basket” of securities.

• Nutmeg: One of the largest digital investment managers that provides Junior ISA (individual savings account), stocks, and shares. It also offers ISA management to over 200,000 clients in the United Kingdom. 
• Moneyfarm: This app is a digital wealth investment manager that allows users to get into trading quickly and investing. Clients get help from experts who will take care of everything for them. Moneyfarm offers low fees and provides support as you start your trading career. 
• Fidelity: This popular investing app offers commission-free trading with no account fees or minimum deposits for brokerage accounts.  
• Moneybox: A savings app that allows you to use your “spare change” to invest in options like stocks, pensions, and a junior or lifetime ISA. 
• Interactive Investor: This app provides an easy way to create an ISA, GIA (general investment account), or SIPP (self-invested personal pension). This investment platform is popular among U.K. investors, with over 400,000 users to date.
• Hargreaves Lansdown: This company is a well-known investment options provider in the U.K. Hargreaves Lansdown is often recommended for beginners because of its educational resources and investment options. 

Reviewers say that the company atmosphere is similar to a bank. However, the improved service means higher fees than other mainstream investing apps. 

• Plum: A low-cost, automatic investment app that uses robo-advisor technology to help clients manage their portfolios automatically. 

Robo-advisors are digital platforms that offer automated financial planning and investment using algorithm-driven technology. Apps with robo-advisor management features require little to no human supervision. 

It’s crucial to know the types of investment accounts you can open. Here are three of the most common investment accounts:

• General investment account (GIA): A share dealing account that lets you invest in ETFs, shares, and other assets a broker offers.
• Self-invested personal pension (SIPP): A SIPP account allows you to manage your investments to prepare you for retirement. However, it costs more than a GIA because it provides tax efficiency.
• Individual savings account (ISA): An ISA is a tax-efficient investment account that allows you to take advantage of available tax benefits.  

Are Investment Apps Worth It?

A service’s worth always depends on its value to the client. Some people may not be inclined to use investment apps because they prefer traditional trading and investing methods, like hiring a stockbroker or financial adviser to handle all their financial matters. 

For modern investors, mobile apps are known for their functionality and handiness, especially for those who want more independence, mobility, and portability when trading. 

Apps are designed for people who are on the go. However, there are always two sides to a coin. Investment apps, despite their convincing advertisements, have their pros and cons. 

Pros and Cons of Investment Apps

Here are some pros and cons of using investment apps that you should consider:

The Pros:

• Offer an easy way to keep track of portfolio performance.
• Allow an easy way for money deposits and trading transactions.
• Provide a “small screen format” for improved communications.
• Give beginner and seasoned clients a user-friendly experience.

The Cons:

• Easy trading may lead to quick yet less thought-out decisions, resulting in people getting tied up with high-risk investments instead of finding more secure options. 
• Portability may increase instances where critical decisions are made while a person is doing other activities. Distractions can be a real problem with investment apps, leading to costly mistakes.

Consider Cost Too

Aside from user-friendliness, the cost of using these investment apps must also be considered. Added expenses may come from the following:

• Services that you don’t need: You must be wary of any service included in the app that you don’t need but which you may accidentally purchase.
• Services you thought were free but aren’t: One example of a hidden fee is investment advice from expert traders. You might be unaware that these small personalised services may have monthly fees and other charges. 
• Management fees or expense ratios: You may need to calculate how much you’ll pay for the app’s stock trading services. These trading fees may seem small but can be costly in the long run. 

Are Investment Apps Safe?

Apps, especially those mentioned in this article, are peer-reviewed and have exemplary past performances. However, it doesn’t mean that all of these apps fit your personal finance status or trading preferences or styles. 

However, all recommended investment apps go through the regulations outlined by the Financial Conduct Authority or FCA. 

The FCA is a body that regulates financial markets and financial service firms in the United Kingdom. You can check if an app abides by the regulations of the FCA before using it.  

What Is an Investment App?

Let’s now learn the definition of an investment app, how it works, its security, and its effectiveness.

An investment app is a program you can install on your iPhone or Android gadget, allowing you to trade and invest in different securities like stocks, shares, ETFs, and investment trusts. 

Investment apps provide services you usually get from real-life stockbrokers or financial advisers. 

Why Use Investment Apps?

Similar to other technological advantages, using investment apps provides the following benefits:

• Investment apps require low fees compared to traditional brokers who ask for commissions. 
• Unlike traditional brokers who often require minimum investments, such apps have a low barrier to entry. Some investment apps allow buying fractional shares, making it possible to invest in stocks or ETFs with as little as £1 to £5 (or any preferred currency). 
• Investment apps provide other helpful resources, like financial news, real-time information on the stock market, and other crucial data needed for critical money decisions. 
• Investment apps are designed to be as beginner-friendly as possible to encourage people to try out investing.

Investment Apps as a Source of Passive Income

You can only get passive income if your invested asset pays dividends. Not all investments offer dividends. 

Some stocks, like cryptocurrency, don’t pay dividends to investors. If you want passive income, find stocks that pay dividends. 

Examples of stocks that pay dividends in the U.K. are British American Tobacco, Imperial Brands, and HSBC (The Hong Kong and Shanghai Banking Corporation Limited).

Rise of Apps

The popularity of mobile devices has also ushered in the rise of investment apps. As such, more trading opportunities have opened to the public. Gone are the days when you solely rely on stock brokers to access the stock market. 

These apps target millennials or people born in the 80s and early 90s who are actively looking for side hustles and sources of passive income. 

Trading Costs

Trading apps have become mainstream nowadays. Ads advertising the next “hot” trading or investment app randomly pop up on social media and online streaming sites. Most of these apps highlight their low fees to attract potential investors. 

However, aside from the fees you pay when you use investment apps, you’ll need to deal with taxes and other miscellaneous expenses after you’ve profited. 

Beware of ‘Indiscriminate’ Trading

Experts in trading and investing caution people using investing apps to refrain from indiscriminate trading. 

Indiscriminate trading is buying or selling stocks without researching and understanding the factors affecting the rise and fall of stock prices.

Typically, indiscriminate selling happens when there’s market panic and investors susceptible to peer pressure sell off their stocks just because others are doing so. Always research before making drastic decisions about your investments. 

Do Investment Apps Really Work?

To understand investment apps and how they work, we must first understand the fundamentals behind this technology. 

How Do Investment Apps Work?

Investment apps or mobile investing apps are software applications you can install on your Apple iOS, Android, or Microsoft devices. 

A trading or investment app offers a portable way to monitor the stock market and transact without even setting foot on the trading floor of a stock exchange. Typically, these apps connect via the internet, providing real-time market updates. 

These apps are used by professional and amateur traders or investors who want quick access to financial information needed for trading and investing. 

You can buy and sell, deposit funds, or withdraw money on one device through these investment mobile apps. Such apps have indeed revolutionised the world of investing. 

Picking the Perfect Investing App for You: What to Consider

Here’s a list of things you might want to answer first before choosing an investment app: 

• What is the level of your trading or investing experience? Are you a beginner, intermediate, or expert trader?
• What are the types of investments you plan to make?
• How much are you willing to spend on fees?
• Do you rely on customer service, or are you the do-it-yourself (DIY) kind of person?
• What account types do you plan to open?

Getting Started: What Is Investing?

To determine the best investment app, you should learn about investing. 

Investing is placing your money on something you believe will increase in value and give you returns through capital gains or income payments. 

In other words, it’s spending money on things you believe will provide you with a source of income down the road. 

Investing also means buying securities, like shares, valuable items, and real estate, or providing capital to a business you believe will grow.  

What Types of Investments Are There?

Investing involves a lot of jargon and numbers, but you shouldn’t fret. 

Let’s start with the basics of investing so you’ll have an idea of the type of investment you can make. When investing online, there are two investment types you may encounter:  

Stocks and Shares

Some people use these two terms interchangeably. Stock pertains to the company that issues the shares, while a share is a unit you invest in a company. 

For example, you want to invest in ABC company. The company is the stock you’re investing in, and you invest by buying their shares. 

ETFs

Another way to invest is through ETFs or exchange-traded funds. An ETF is a kind of investment fund allowing you to purchase a “basket” of individual, government, and corporate stocks and bonds. 

An ETF is like a grocery bundle, with a selection of goods you buy as a single item. ETFs are similar in principle as they represent a basket of stocks where you can invest in more than one security. 

How Do I Invest Money?

Anyone can journey into investing, provided that you understand the benefits and risk levels of this money-making opportunity. However, you must first decide what kind of investment you want to make. 

There are two primary types of investments: long-term and short-term investments. Here are the pros and cons you must consider before investing your hard-earned money: 

• Short-term investment: You hold this type of investment for up to one year. You can profit from volatility and near-term gains. 

If handled correctly, a short-term investment can result in quick returns, which you can reinvest. However, because of the volatility of most short-term investments, there’s a high risk of losing money.

Examples of short-term investments include stocks, options, and ETFs. Note that an option is a contract that gives the buyer the right but not the obligation to buy or sell an underlying asset at a specific price on an agreed-upon date.  

• Long-term investment: You should choose this type of investment if you want to build portfolios and accomplish long-term goals. 

This type of investment has relatively lower risks compared to short-term investments. Gains may not be at the same level as market-timed investments, but you’ll pay less in taxes. 

Examples of long-term investments include:

• Mutual funds
• 401(k) or an employee’s retirement fund
• College funds
• Life savings account

How Much Should a Beginner Invest?

You can find many recommendations online on how much you should invest as a beginner investor. 

Many online investment sites and applications allow you to start investing with as little as £1. However, it doesn’t mean you should do so without any prior thought. 

Aside from looking at how much to invest, here are other tips when investing: 

1. Ensure you don’t have any outstanding debts before you invest, and start investing only when you’ve paid all of your debt.
2. Invest when you’ve set aside enough money. There are many things that you need to cover to maintain your lifestyle. Ensure you have enough money for basic needs, utilities, and emergencies. 
3. You should invest only when you have enough savings. There are things you may want to buy or plan to do in the future that you can’t afford today. You may be faced with choices like saving up for your next car or using your savings to invest. 

However, it’s advisable that you start investing if you have money that is not tied up with other obligations or plans. Once you invest, whether short-term or long-term, you won’t be able to use your money for a specific period. So, plan your move carefully. 

However, if you want to learn how much you need to invest, the answer depends on your broker or the application you plan to use.

Investment brokers and apps require you to place a specific amount of money as an initial investment. However, you can start an investment with as little as one pound or dollar. 

What Are the Golden Rules of Investing?

Though no hardline rules are set in stone for investing, the following are considered best practices: 

1. Never invest more than you can afford and trade only what you can afford to lose.
2. Do your research and understand how an investment works.
3. Significant returns often involve significant risks.
4. You can win some and lose some in investing.
5. Diversify your investment, and don’t spend all your money on one particular asset.
6. Learn to be patient because investing is a waiting game. 
7. Review your investment portfolio regularly and make necessary changes. 

Investments Can Go Down As Well as Up

Always remember that investing is more than an alternative to a savings account. It’s a money-making scheme where you can earn a profit or lose everything instantly, especially if you’re investing in high-volatility stocks. 

As the saying goes, don’t count your chickens before they hatch. Never assume that everything will always go according to your plan because investing is always risky. 

Trading Probably Won’t Make You Money

Trading and investing are not get-rich-quick programs. Investing is a slow, gradual process that involves planning and sound decision-making to succeed. 

Some use investments to plan for the future or have a source of passive income. However, in most cases, you won’t instantly make the amount of money you dream of. 

Is It Really That Easy to Invest?

With today’s technology, investing is easy. All you need is a bank account, an investment app, and a steady internet connection. However, ensuring that your investment succeeds takes work.

Frequently Asked Questions

• What is a ready-made portfolio?

A ready-made portfolio combines different types of investments grouped into one fund. These portfolios make investment decisions easier for clients as these clients don’t have to invest individually in each item within the portfolio. 

Portfolio providers may offer you options like a ready-made portfolio that focuses on maximum returns or assures investors of the security or safety of their funds.

• What makes stocks and shares important?

Stocks and shares are building blocks of the stock market. Owning these financial instruments may help you build your savings, safeguard your money from taxes and possible inflation, and maximise the income and value of your investment. 

However, always remember that investing entails risk. There’s no guarantee that you’ll always succeed. 

• Can I make passive income through investing?

It depends on the type of investment you have made. You can have a passive income through investments if you’ve invested in securities that pay dividends. However, there are investment options that don’t pay dividends. 

• What is ethical investing?

Ethical investing involves using ethical principles to dictate or filter the selection of securities you plan to invest in. 

This practice depends entirely on the investor’s principles. On the other hand, socially conscious investing happens when an investor’s decision is based on what society deems ethical. 

• How can I invest sensibly?

Sensible investing is simply being smart and placing your money on relatively low-risk investments that can result in proportional gains. It involves passive and evidence-based investing. 

Sensible investing may lead you to invest in pension funds and stop you from making short-term investments.

Suppose you’re ambitious, daring, and adventurous in your investments. In that case, intelligent decisions may be deprioritised compared to opportunity-seeking choices, where the chance of making big money outweighs the sensible risks they involve. 

• What is peer-to-peer investing?

Peer-to-peer or P2P investing is lending your money to individuals or businesses needing a loan. P2P investing cuts out the middleman, allowing the lender to earn more interest than they would on a savings account. 

• What should a beginner invest in?

A beginner should always invest in securities that they know the most. Experts advise beginners to focus on secure investments like pensions or retirement funds. 

Some recommend placing one’s money on high-yield investments, while others suggest investing in ETFs or mutual funds. 

However, you should first have a basic grasp of the benefits and risks of each investment option before you invest your money. 

• What’s the difference between a GIA and ISA?

An ISA is an individual savings account that allows you to invest or save money because of tax efficiency. On the other hand, a GIA is a general investment account that offers a simple way of investing once you’ve maxed out your yearly ISA allowance. 

• How much money should a beginner invest for the first time?

Always remember to invest only the amount you’re willing to lose. Investing and trading are risky ways to make money. 

An initial investment through digital investment apps may cost £1 or £100. Still, the bottom line is that you should know the risks for every amount you invest. 

A quick Google search of the “Best investment apps UK” may give you an extensive list. Still, the best investment app is the app that works for you. 

This article merely provides a list of apps you can choose from. It all depends on your investing preference, style, and financial capability. So, invest wisely so you can thrive in the world of financial investments.

Disclaimer: The information provided in this article is for general informational purposes only and does not constitute financial advice. It is not intended to be a recommendation to buy or sell any financial instrument or engage in any investment activity.

While we strive to provide accurate and up-to-date information, we do not guarantee its completeness or accuracy. We rely on various sources for the information presented, and we cannot guarantee the reliability or accuracy of these sources.

The information provided here does not necessarily reflect the products or services offered by our company. Any mention of financial products or services is for informational purposes only and should not be considered an endorsement.

All investments involve risk, including the potential for loss of principal.

This information should not be considered as financial advice. You should always seek professional financial advice from a qualified advisor before making any investment decisions.

References

1. What Is Investing? How Can You Start Investing?https://www.forbes.com/advisor/investing/what-is-investing/ 
2. Shares vs Stocks: What’s the Difference? https://www.sofi.com/learn/content/shares-vs-stocks/ 
3. Robo-Advisor https://www.investopedia.com/terms/r/roboadvisor-roboadviser.asp 
4. Ethical Investing: Overview and How To Do It https://www.investopedia.com/terms/e/ethical-investing.asp