interactive investor introduces free regular investing

We’re the first of the big investment platforms to scrap its regular investing fee, from 8 January 2020.

interactive investor, the UK’s second largest direct-to-consumer investment platform, is ringing in the new year by introducing free regular investing from 8 January 2020. It is the first of the big investment platforms to scrap its regular investing fee. 

In the spirit of interactive investor’s flat-fee charging model, which does not favour one type of investment over another, customers can invest for free regardless of whether they choose funds, investment trusts, ETFs or individual stocks – or they can mix and match. The minimum amount for regular investing is £25 per month.

Consigned to the past is interactive investor’s 99p fee for regular ‘monthly’ investing, leaving customers with just one easy-to-understand, pounds-and-pence monthly flat fee. 

Richard Wilson, Chief Executive, interactive investor says: “The removal of the regular investing fee means one less thing to get confused about and one less platform fee to add up. It’s about building confidence and knowing that’s all there is to it. It’s just free. That’s the value.

“Having permanently scrapped exit fees over a year ago and moved from a quarterly to a far more intuitive monthly flat fee last year, we are constantly exploring ways to simplify and add value. We want to do as much as we can to make investing simple. With no percentage fees, just a flat fee that stays the same as investors’ wealth grows, investors can keep more of their hard-earned cash, and keep control of their financial future.”

Regular investing: A look at the rest

Hargreaves Lansdown charges nothing for regular investing into funds but does charge £1.50 per qualifying investment trusts, ETFs and FTSE 350 shares. Fidelity Personal Investing also charges £1.50 for investment trusts, shares and ETFs. Halifax Share Dealing charges £2 for shares, funds, investment trusts and ETFs, and Barclays charges £1 for “all automated regular investments”. AJ Bell, meanwhile, charges a £1.50 regular investing fee for both shares, funds, investment trusts and ETFs.

Adding complexity, and adding up

Moira O’Neill, Head of Personal Finance, interactive investor, says: “Regular investing charges add complexity and add up – potentially to thousands of pounds over the long term. For those investing £25 per month into just one fund or trust, over 20 years, assuming an annual return of 5%, the removal of the 99p regular investing charge would make investors £400 better off. 

“Customers investing into three funds or trusts a month, each at £25 per fund/trust, would be £1,200 better off over 20 years – and more than £3,200 if they had a basket of eight funds that they pay into a month. These figures all assume a 5% annual return, which is not guaranteed and is for illustrative purposes, but does show how costs can eat into returns over time.  

“If you have a partner or children and you all have investment accounts, you will save even more. All too often investors look at their investment charges in isolation, but a family of investors may collectively be paying a small fortune in regular investing fees, adding up to thousands of pounds over the long term. There’s more savings to be had, too – while Junior ISAs are not a stand-alone interactive investor product, they come free with our accounts. You can have as many free Junior ISAs as you have children.”

Last year, interactive investor replaced its quarterly flat fee with a monthly flat fee. 

The removal of the regular investing charge comes just over a year after interactive investor permanently scrapped exit fees in November 2018, having waived the levy since December 2017.