Jasmine Birtles
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How to buy shares with zero commission
Karl
6th Dec 2022
This is a sponsored post on behalf of eToro
If you want to invest, it’s now possible to buy shares without having to pay a commission.
So how can you buy shares at 0% commission? And what should investors look out for? Keep on reading for all the details or click on a link to head straight to a section…
What is zero commission?
If you want to buy shares, some brokers will charge you a share dealing fee. This is sometimes known as a ‘dealing commission.’
While some brokers may offer a discount if you make multiple trades in a month, having to pay any sort of fee for individual share purchases can soon add up – especially if you’re an active trader!
If you’d rather avoid having to pay these fees – who wouldn’t? – then we have some good news….
Thanks to old-fashioned competition, there’s now a growing number of investment brokers offering ‘zero commission’ trading. This means that every time you buy a share, you’ll pay zero, zilch… nothing! However, there may be other fees that apply.
0% commission with etoro
eToro – the sponsor of this article – is one broker that charges 0% commission (excluding on short or leverage positions i.e CFDs). Other fees apply.
So when you buy shares through eToro, you won’t pay management, rollover, or ticket fees. Opening an account is also free.
While eToro is paying for this article, here are Money Magpie we’re big fans of online brokers challenging the investing norms by getting rid of expensive fees.
Not only can zero commission brokers make investing cheaper, but low cost investing can be a huge positive for those without lots of investing capital, such as newbie investors. That’s because 0% commission can make investing more worthwhile for low capital investors, as it avoids the need to say goodbye to a large chunk of capital for the purpose of servicing fees.
how can you buy 0% commission shares with eToro?
eToro is a multi-asset investment platform. One of its unique selling points is that it charges 0% commission on stocks.
If you’re keen to buy shares through eToro, then here are the five steps that you’ll need to follow:
1. create your account
To buy shares, you’ll need to visit the eToro website and click ‘sign up.’ Once complete, you’ll then be invited to create your account.
If you want to save time on this step then you can use an existing Facebook or Google login.
2. complete your profile
Once you’ve signed up, you can then complete your profile. To do this you’ll need to fill in your name, address and phone number. You’ll also need to give some information about your income and tax residency.
3. share your experience
In order for eToro to work out your investing style, you’ll be asked to share how you plan to invest, plus your investing experience.
For more on this, see our article that explains how to set your investing strategy in 5 simple steps.
4. Deposit funds
Once you’ve satisfied the above, you’ll then be invited to deposit funds. It’s worth knowing that eToro is denominated in US dollars only. So if you deposit in pounds the platform will convert your currency into dollars using its own exchange rate.
5. buy shares
Once you’ve completed the above steps you’ll have the ability to buy shares. The easiest way to do this is to use the search bar at the top of the eToro investing page.
For example, search for ‘Amazon’ and you’ll see the current price of Amazon (AMZN) shares. A big green ‘Invest’ button will also be displayed. Click on this, set your order, and you’re done!
What Do investors need to know?
While 0% commission investing can hugely lower the cost of buying shares, other fees may apply.
Fees charged can differ massively between investing platforms. In the case of eToro, you’ll face FX conversion fees as all trades are conducted in dollars. A $5 fee for US dollar withdrawals also applies.
However, if you want to minimise these charges, it would be possible to transfer your pounds to dollars through a platform that doesn’t charge FX fees like ‘eToro Money’ which removes the FX fees when used to make deposits to eToro in pounds.
On top of FX fees, eToro also charges a $10 monthly inactivity fee. However, you’ll only have to pay this if you go 12 months without any trading activity.
It’s also worth knowing that eToro’s 0% commission only applies to shares. If you wish to use the platform to buy other assets, such as cryptoassets, then you’ll have to pay a commission. In the case of crypto, a 1% fee applies on trades. Buying assets with leverage (CFDs) are also subject to fees.
See the eToro website for more information on fees.
try etoro before investing
eToro offers a risk-free demo account which gives $100,000 of virtual funds to learn with. So if you want to practice and get comfortable with the platform, it could be a good way to learn the ropes.
Is eToro safe?
eToro is regulated in the UK and you can find the full details here.
Always keep in mind that when it comes to investing your capital is at risk.To learn more about investing, sign up for our fortnightly MoneyMagpie Investing Newsletter.
Disclaimer: Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment, and you should not expect to be protected if something goes wrong. Take 2 minutes to learn more.
MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. Capital at risk.
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Zero commission means that no broker fee will be charged when opening or closing the position and does not apply to short or leveraged positions. Other fees apply including FX fees on non-USD deposits and withdrawals. Your capital is at risk. For more information, visit etoro.com/trading/fees.
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