Dealing in UK Shares
The IG account fees you will pay will differ based on a number of factors, so it’s wise to make sure that you do your research to ensure you are receiving the best rate. The first major difference in IG trading fees lies in whether you are dealing in shares or trading contracts for difference (CFDs).
In the case of the former, commission fees payable to IG are also different based on whether or not the shares being dealt are UK-based or international. For a UK-based share, IG will charge a commission of £5 per trade if more than ten trades were made in the previous month, and minimum charges are also in place – £5 for online and £40 for over the telephone.
- The more trades made in the previous month, the lower the fee
- Minimum charges are in place
- Lower IG fees are possible if CFD trades are made
- Fees for trades over £25,000 are based on negotiation
Those who make between zero and nine trades in the previous month will usually be charged £8 per trade with an online minimum of £8 and a phone minimum of £40. There are some caveats, however. Placing even an occasional CFD trade, for example, can sometimes be beneficial: if you do this once per month, your whole account will be assigned the (lower) CFD rate, even on your share dealing transactions.
Dealing in International Shares
The fee structure at IG differs further based on location, and rates are different for each country in which the shares you trade through IG are located. The commission per trade for USA-based shares, for example, rests at $0.02 per share, while the fees for countries like the Netherlands, Germany, Austria, Australia and more sits at 0.1%. The minimum charges also persist with international share trading: the minimum online charge for USA-based shares is $15, while the minimum online charge for shares based in European countries is usually 10 Euros.
- Commissions per trade in place for USA, Europe and Australia-based shares
- Precise amounts differ based on country
- Commission on USA-based shares currently at $0.02 per share
- Minimum online and phone charges for international trades too
For Australia, the minimum charge is 10 Australian dollars. It’s also important to remember that there are minimum charges for phone-based international share trades, too: the minimum for USA-based shares, for example, is $50, while investors in European shares will pay 50 Euros and investors in Australian shares will pay 50 Australian dollars. In terms of currency conversions, meanwhile, IG will charge 0.3% to turn your earnings into a base currency of your choice. The complexity of this fee structure means that it’s wise to spend some time familiarising yourself with the way commission is charged if you plan to invest in international stocks during your IG trading career to prevent any unexpected surprises.
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CFDs – or contracts for difference – are different to traditional shares in that the investor doesn’t own the actual share itself. Instead, the CFD represents the share and mirrors its movements – so if the value of the actual share rises, then you profit, and if the value goes down, then you may make a loss. This mode of trading is available through IG, but the fee structure is different to the one for the UK and international share dealing.
- CFDs available on the IG platform – although underlying share/asset not owned
- £5 commission fee per UK-based CFD trade
- One or more CFD trades or spread bets in the previous month required
- Deals of over £25,000 require a bespoke fee
To trade a UK-based CFD on IG, you will be required to pay a flat rate of £5 per trade in commission provided that you have made one or more CFD trades (or spread bets) in the previous month. As is also the case with the share dealing fee structure, IG trading charges on CFDs will also change if you end up trading values of more than £25,000, and these will need to be worked out via a negotiation process with IG rather than as a standard rate.
ISAs and SIPP Charges
In addition to its CFD and share dealing offers, IG also provides investors with the opportunity to take advantage of the ISA (individual savings account) scheme offered by the government. As part of this, every investor receives a £20,000 savings allowance per year, the interest on which is not taxed. When investing in an ISA with IG the fee will usually be the same as the standard IG share dealing account, and there’s also no set up fee or transfer costs if you create or move an ISA. IG also offers a SIPP or self-invested personal pension. This sort of pension is sometimes known as a “do it yourself pension” because the exact investment instruments can be specified by the pension holder.
With IG, SIPPs are actually operated by a third party firm called James Hay as part of the James Hay Modular iPlan. Investors will not need to pay a fee to IG for creating a SIPP, but the Modular iPlan comes with an annual cost of £195, and there will also be a range of ongoing fees including commission charges and an in-specie contribution amount of £250. If you opt for a SIPP you should analyse the fee structure of this plan in full to make sure you are getting a good deal.
In addition to the headline fees laid out here, though, there are also other fees which can be incurred depending on the exact nature of your use of the IG platform, so it’s wise to take note. When it comes to trading shares based in countries outside of the UK, for example, it’s likely that you will need to access live pricing information from a source such as an exchange, and you may be required to pay a monthly charge in order to receive this information.
- Extra fees may be incurred
- International pricing information may cost money
- Some services are free, like adding external SIPPs and ISAs to portfolio
- Transfer out of these items also free of charge
On the flip side, some additional services provided by IG come at no additional charge, so there are opportunities to save cash as well. If you’re planning to bring your stock portfolio all together into one place, for example, IG will not charge you if you insert any external UK-based stocks into your portfolio. The same applies for UK-based SIPPs and stocks and shares ISAs, too – and if you ever need to remove any of these items from your portfolio you again won’t be charged. There are also usually no IG withdrawal charges in place, so you can access your cash without paying a penalty.
When analysed in a standalone way, IG’s fees appear low. But in a competitive marketplace, it’s important to ensure that these fees are also low when placed in comparison to other providers of the same services. Luckily for IG investors and traders, the fees on this platform are indeed quite low in comparison to fees across the board. To take CFD fees as an example, the charges placed on the spread (the amount between the price of the item at purchase and the price of the item at sale) are ranked as highly competitive – meaning you save more of any profits you might make when trading with IG.
The spreads charged on currency pairs are often low, such as the 0.6 pip fee placed on the Euro/US dollar spread and the 0.7 pip fee on the US dollar/Japanese yen pair. The same applies to IG’s cryptocurrency offer: a highly competitive spread fee of 10 points, for example, is available on Bitcoin CFD trades. Although these fees apply in addition to the commission charged on CFD trades, they are still competitive rates – and, unlike some brokers, IG does not charge inactivity fees, so long-term intermittent trading is possible without any additional charge.
An Efficient Platform
As has been made clear so far in this guide, there are a number of fees to be paid on many aspects of the IG service. And while some of these fees may be competitive compared to the wider market, it’s definitely the case that they still eat into any returns you might make when using the IG platform. However, it’s also the case that you get what you pay for, and in return for the management and commission fees charged by IG, you are likely to receive an excellent service thanks to its efficient features and top customer service team.
The IG platform helps you cut down on the amount of time you spend managing your investment portfolio, for example by offering a full suite of trading apps with exclusive market data and 256-bit SSL encryption – and this saved time allows you to let go of administration tasks and helps you focus on profitable activities related to your portfolio, like market research or historic data analysis. What’s more, fixing any problems is simple thanks to the highly-rated IG customer service team, who are available via online chat 24 hours a day during the week as well as via other contact methods such as the telephone. As one review on community review website TrustPilot wrote: “The team is there always, knowledgeable and ready to help”.
IG: Our Verdict
IG is a favourite of many traders and investors, and after a quick broker comparison, it’s not hard to see why. Users of this system as a trading platform enjoy lots of benefits, and one of these is the relatively low IG fees they will need to pay. IG fees are not only low in themselves, they are also competitive when compared to the performance of the wider industry – especially in the realm of CFDs, where spread fees are highly beneficial to the trader across the whole range of products, such as forex pairs and cryptocurrencies.
IG does not charge any fees at all, meanwhile, on a range of products and services which other brokers may choose to charge for, such as account inactivity and transferring in external products created by other providers. And while it is the case that IG charges commission on many trades carried out on its platform, the low level of the other fees means that often it still remains cost-effective to use this platform. When combined with the top customer service offer and range of innovative, cross-device trading apps IG provides, the platform’s offer is clearly one of low cost and high value for money.