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Interactive Investor review – how cheap can investing be?

In this Interactive Investor review, we show you why this multi-award-winning platform could save you thousands in fees.  If that’s not enough, it’s also one of the largest platforms in the UK. Interactive Investor is renowned for being the best ‘low-cost’ investing platform, but that doesn’t necessarily mean it’s for you.

While Interactive Investor can offer great value, as it’s a fixed fee broker, it may not be so cost-effective for all portfolios. We take a deeper dive, looking at exactly how cheap it can be and if Interactive Investor is right for you.

Who is Interactive Investor?

Interactive Investor is the second largest investment platform in the UK, after Hargreaves Lansdown. It’s been around for 25 years, has over 500,000 customers and holds in excess of £30 billion in assets.

Furthermore, Interactive Investor is renowned for low fees and a simple charging model. It’s also been gaining market share by acquiring other smaller platforms such as Shares PLC in 2020 and Alliance Trust Savings in 2019.

Plus, Interactive Investor is a fixed fee broker. This means no matter how much you invest, the platform fees are fixed. By contrast, Hargreaves Lansdown is a ‘percentage fee broker’, meaning it takes the platform fee as a percentage of the amount you have invested.

If you would like to learn more about the different types of platforms, then check out our guide on How to Choose an Investment Platform.

Unlike platforms such as Vanguard Investor which limits your investment choices, with the Interactive Investor platform you have access to a broad range of stocks and funds.

Heads up – We aim to produce honest and accurate content, however, we are not financial advisors. If you need financial advice, Unbiased can connect you with a suitable professional for free. Some of our links may earn us a small commission to help us run the site.

Interactive Investor products

As you might expect from one of the largest investing platforms, Interactive Investor offers a wide range of products:

Interactive Investor Stocks and Shares ISA

The Interactive Investor ISA allows you to stash up to £20,000 annually, tax-free. With Interactive Investor you can buy individual companies, funds, ETFs and investment trusts.

There is no minimum amount that customers must deposit into their accounts or invest with each month. If you choose to take advantage of the free regular investing service, there are no trading fees but you must invest a minimum of £25 per month.

Subscription fees start at £9.99 per month. If you have less than £30,000 and only trade once per month then Hargreaves Lansdown will usually be cheaper.

Learn more – The Ultimate Guide to ISAs.

You can open your Interactive Investor ISA here.

Interactive Investor Junior ISA (JISA)

A Junior ISA can help you save thousands in a tax-free wrapper for your child’s future. You can learn more about Junior ISAs here.

The great news is that if you already hold an Interactive Investor ISA account you can open a Junior ISA for free!

To open a Junior ISA, you must have parental responsibility. However, once the account is open, anyone can contribute. Just make sure you don’t exceed the current allowance of £9,000 per year.

The minimum investment is £25 per month.

However, there are some potential downsides to Junior ISAs. Check out Junior ISA – Do you trust your teen? to learn more.

You can open an Interactive Investor Junior ISA once you have opened your own ISA here.

Interactive Investor SIPP

A SIPP (Self Invested Personal Pension) can be a great way to save for retirement. If you want to learn more and figure out whether you need one, then check out What is a SIPP and do I need one?

If you already have an Interactive Investor ISA, then adding a SIPP costs £10 per month. And if you want a SIPP only, then you can opt for the Pension Builder Plan which costs £12.99 per month.

You can open an Interactive Investor SIPP here.

Interactive Investor platform review

The Interactive Investor platform is comprehensive and has everything you need as an investor. However, it feels a little less refined than its competitors. This may make the platform harder to use for those just starting out.

Furthermore, Interactive Investor has nearly 20,000 reviews on Trustpilot, with 80% rating them as ‘Excellent’. Some of the negative reviews point to issues transferring ISAs and SIPPs with customers being frustrated with the paperwork and processing time. While this may be frustrating, it is also a problem customers mention on other platform reviews.

Interactive Investor Review - TrustPilot scores 4.7 out of 5 stars

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Interactive Investor Review - mobile app

The mobile app certainly feels cleaner to use than the website. However, it still feels basic compared to its competitors. If you’re choosing a platform purely for usability, then many consider the Hargreaves Lansdown platform to look and feel much more intuitive.

However, for most casual investors, your mobile app is going to be used once or twice a month to check your portfolio. So while the mobile app may not be the best on the market, it certainly is functional for most users.

Reviews on the Google Play store are particularly negative, with a low rating of 1.8 out of 5. However, Apple users are clearly having a better time, rating it 4.4 out of 5.

Interactive Investor Mobile App

Interactive Investor fees and charges

Fundamentally, Interactive Investor is a fixed fee platform. This means that regardless of whether your portfolio is large or small, you’ll end up paying the same amount per year to use the service. For this reason, fixed fee broker charges favour larger investments, usually above £30,000.

Also, there are other nuances to consider, such as how often you trade and what you buy and sell. This means one size does not fit all and a single comparison does not work for all investors.

Laid out below are the charges for the ‘Investor’ plan, including a few scenarios for comparison.

  • £9.99 a month service plan fee gives you access to a Stocks & Shares ISA, Junior ISA and a General Trading Account (GIA).
  • Add a SIPP for £10 a month extra.
  • One free trade per month, after this it’s £7.99 per trade.
  • No trading fees using the regular investing service.

You can upgrade the Investor plan to two other tiers; Funds Fan & Super Investor. These offer additional discounts for more frequent traders.

Interactive Investor Plans

Here’s our table that should help you decide which plan is right for you.

Pension Builder* Investor Super Investor
Monthly subscription £12.99 £9.99 £19.99
Stocks and Shares ISA ✔ ✔
Trading Account ✔ ✔
Junior ISA ✔ ✔
SIPP (Self-Invested Personal Pension) ✔ +£10 per month +£10 per month
Platform services** ✔ ✔ ✔
Free monthly trade*** ✔ x 1 ✔ x 2
Free regular investing ✔ ✔ ✔
UK shares and funds, US shares £7.99 £7.99 £3.99
Other international shares £19.99 £19.99 £19.99
Dividend reinvestment £0.99 £0.99 £0.99

* The Pension Builder plan monthly cost includes: SIPP Admin Fee of £10 per month inc. VAT. The remaining £2.99 per month covers platform services. The Pension Builder plan is only available to customers who hold just a SIPP account.

** Platform services includes holding funds as nominee and disaggregating income from holdings.

*** In Investor and Super Investor plans we also give you a monthly credit worth £7.99 in return for your subscription. You can use this credit against trading fees in any of the accounts your plan covers, and it is available for 90 days.

Is Interactive Investor the cheapest?

This depends on how you plan to invest. The table below shows the raw platform fees using different size investment portfolios. However, if you buy frequently, then you need to review the buying and selling costs for your chosen investment. Use this table as a guideline only.

£5,000 £10,000 £20,000 £30,000 £50,000 £75,000 £100,000
Interactive Investor (Fixed) £120 £120 £120 £120 £120 £120 £120
Hargreaves Lansdown (0.45%) £22.50 £45 £90 £135 £225 £315 £450
Fidelity (0.35%) £45 (min) £35 £70 £105 £175 £262.50 £350
Vanguard Investor (0.15%) £7.50 £15 £30 £45 £75 £112.50 £150

The table above shows which platform will be the cheapest based on platform fees only. It also makes some broad sweeping assumptions. If you regularly invest once per month and in one stock or fund, then this table should hold true.

However, it doesn’t take into account trading frequency. If you are a more frequent trader, then please review each platforms’ dealing fees.

In general, Interactive Investor is going to be cheaper as your portfolio pushes above the £30,000 mark. There are always exceptions though. If you only trade Vanguard funds, then the Vanguard Investor platform doesn’t get beaten until around £80,000.

If you trade regularly

You get one free trade per month with Interactive Investor, which can be used for funds or individual stocks. If you trade more often than this, things get a little trickier to work out.

If you want to invest in different individual stocks each month, then most platforms charge a fee. For example,  Hargreaves Lansdown charges £11.95 for dealing UK and overseas shares, investment trusts, exchange-traded funds (EFTs), gilts and bonds. By contrast, there is no fee for buying or selling funds.

After using up your free trade per month, Interactive Investor charges £7.99 per trade for all transaction types.

Regular investing is slightly different with Hargreaves Lansdown, charging £1.50 per stock per month and Interactive Investor leveraging no charge.

So, if you want to choose your investments each month and you plan to buy or sell at least one share per month, then Interactive Investor should work out cheaper.

Furthermore, if you regularly invest each month, then remember to tag another £18 onto your Hargreaves charges above (12 x £1.50). If you are in this situation and have over £23,000 invested, then Interactive Investor should again be cheaper.

In summary, these nuances are all good reasons as to why it’s important to know how you plan to use the platform.

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Is my money safe with Interactive Investor?

With Interactive Investor, your money is protected by the Financial Services Compensation Scheme (FSCS) up to £85,000. To be clear, the FSCS does not protect your investments if the value goes down. What you invest in and the associated risks are your responsibility.

Additionally, access to your account is protected using two-factor authentication. This protects access to your account even if your username and password are compromised.

How your money is held and protected

Interactive Investor - what we like

  • Cost-effective – for portfolios above £30,000 it’s worth considering or reviewing against your current platform.
  • Simple pricing – straightforward monthly cost.
  • Ethical investing – award-winning ethical Investing options.

Interactive Investor - what we don't like

  • Platform – the look, feel and usability may be considered weaker compared to alternatives such as Hargreaves Lansdown.
  • Multi-tier charging – choosing your plan can be confusing if you are unsure how often you’ll trade.
  • Tricky for newbies – recommended for experienced investors who value cost over functionality and ease of use.

Interactive Investor vs Hargreaves Lansdown

Hargreaves Lansdown and Interactive Investor are considered the top two platforms in the UK. Both provide very similar services when it comes to products, range of investments and platform tools.

However, choosing between the two can be difficult. So we’ve created some decision criteria that should make your choice easier.

Plus, check out our Hargreaves Lansdown review.

Both providers offer DIY investing services. This means you have to pick your investments. For many, this might feel daunting. If this sounds like you then you should probably opt for a robo-advisor.

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Conclusion

While I have raised criticism over the Interactive Investor platform and mobile app, it has actually improved dramatically over the last few years. The platform itself is solid and perfectly functional for most investors.

However, platforms such as Hargreaves Lansdown are clearly ahead in terms of usability. I suspect this is currently a priority area for Interactive Investor to be focusing on.

Interactive Investor is great for those looking to lower their platform fees and trading costs. If your portfolio is over £30,000 or you buy at least one different stock per month, then it’s worth doing the calculations to see if Interactive Investor works out cheaper.

Lastly, Interactive Investor is often a cost-effective platform. In my opinion, it suits more seasoned investors with larger portfolios. It is a DIY platform which means you will need to choose your own investments. If this sounds scary then consider using a robo-advisor service that will help you pick your investments.

If you would like to learn more or open an Interactive Investor account click here.

If you still have questions, please come join our supportive UK Personal Finance club on Facebook. You will find other like-minded individuals. It’s a safe, private community where you can ask questions and learn more about making the most of your money. Best of all, it’s free! I’d love to see you there.

Here’s to your Financial Fitness

EatSleepMoney.co.uk does not offer financial advice and is intended for reference/information only. Remember, you should always carry out your own research and/or take specific professional advice before choosing any financial products or services or undertaking any business or financial venture. If you need financial advice Unbiased can connect you with a suitable professional for free. Investments may go up as well as down and you may get back less than you put in.

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