Freetrade vs eToro – which is better for investing and trading?

Table of Contents

Freetrade vs eToro: Expert Summary

By Alex King, Chartered Accountant and Founder of Generation Money

eToro is our winner. It has more innovative features (e.g. CopyTrader) and is cheaper for investing in US & European shares and ETFs. eToro also allows you to invest in cryptocurrencies and trade CFDs.

Freetrade is still a good option if you want to open a Stocks and Shares ISA or a SIPP, though. Plus, get a free share worth up to £100 using our link.

eToro is a multi-asset investment platform. The value of your investments may go up or down. Capital at risk if you invest. FSCS protected.

For this investment platform comparison we’ll be looking at Freetrade vs eToro.  

eToro is best known as a trading platform with commission-free share investing. Freetrade is an app-only investment platform for long term investing, offering an investment ISA and a SIPP.

We’ll be comparing eToro and Freetrade against a number of metrics to see which comes out on top. This includes investment options, features, their respective apps, products and, of course, fees.

Whether you’re a trader or investing for the long term, expensive fees can eat into your returns over time. With more than 30 years combined experience as investors and finance pros, we know how important it is to balance costs against returns!

Freetrade vs eToro by Generation Money

Read on for our full Freetrade vs eToro comparison, or use the contents to jump straight to a particular section.

Table of Contents

Freetrade vs eToro: At A Glance

Here’s our overview of eToro vs Freetrade in case you don’t want to read the whole comparison. 

The table below looks at the key features compared against each other.

FreetradeeToro
Fees / Platform ChargesMonthly subscription fees:
Basic plan: Free
Standard plan: 5.99 per month or £59.88 per year
Plus plan: £11.99 per month or £119.88 per year

FX fees on non-GBP instruments:
Basic plan: 0.99%
Standard plan: 0.59%
Plus plan: 0.39%
No subscriptions fees, custody fees or commission. Instead, following fees apply:
FX conversion fee on all non-US dollar withdrawals & deposits. This fee is in pips and depends on the method of transaction, e.g. bank transfer is 0.50% mark up on the spot FX rate

Daily financing fees on all CFD trades kept open overnight (inc. weekends), exact fee depends on asset being tradedSpread on CFD trades, varies by instrument

Withdrawal fee of $5 on all withdrawals (deposits are free)Inactivity fee of $10 per month if no login after 12 months
Minimum Investment£50 minimum deposit
£25 minimum direct debit
£1 minimum to invest
Minimum first time deposit of $50
Minimum deposit after this is $10
Minimum investment of $500 for Smart Portfolios
Products / AccountsGeneral Investment Account (GIA)
Stocks & Shares ISA
SIPP (Pension)
Trading Account
Pro Account
eToro Money Account
Demo Account
eToro does not offer ISAs or SIPPs
Ready-Made PortfoliosNone65+ Smart Portfolios based on different themes
Ready-Made Portfolio FeesN/ANo additional fees for Smart Portfolios
Ethical Portfolios/FundsAccess to ESG ETFsESG-Leaders fund & ESG ETFs
Other Investing OptionsNoneCopyTrader
DIY PortfolioYesYes
Investment OptionsOver 6,000 UK, US & European shares, ETFs & Investment Trusts
UK Treasury Bills
Shares
ETFs
Cryptocurrencies
Commodities
FX
CFDs on shares, ETFs, Commodities & currencies
FSCS ProtectionYesYes
Trustpilot reviews4.04.3

eToro is our overall winner. Read on for all the details on why it’s our pick.

eToro

eToro is our top-rated investment app, it’s easy to use, has lots of innovative features and allows you to trade commission-free.

Capital at risk if you invest.

What is eToro?

Founded in 2007 in Israel, eToro has become one of the most popular trading platforms in the world.

It now has over 20 million users across the globe and is popular with full-time traders. eToro was one of the pioneers of commission-free trading and app-based trading. 

eToro is also well-known for its CopyTrading service, where you can copy the trades of popular traders through the eToro community. 

What is Freetrade?

Freetrade is an app-only investing platform which was founded in 2016 in London. It was set up to rival the more traditional stockbrokers by charging lower fees and offering an easy-to-use app. 

As of 2024, Freetrade has 1.4 million users and offers over 6,000 stocks and ETFs to invest in.

Freetrade vs eToro: Fees

Let’s look in more detail at the all-important costs for eToro vs Freetrade.

eToro does not charge subscription or platform fees. Instead it charges a range of transaction fees. 

By contrast, Freetrade has a tiered fee structure based on the features/products you want access to. This is often referred to as a ‘freemium’ model – the basic features are free for all users but you have to pay to access additional features and benefits.

FreetradeeToro
Platform FeesMonthly subscription fees:

Basic plan: Free
Standard plan: £5.99 per month or £59.88 per year
Plus plan: £11.99 per month or £119.88 per year
No subscription fees or platform charges for holding investments

FX conversion fee on all non-US dollar withdrawals & deposits. This fee depends on the method of transaction:
Bank Transfer: 50 pips mark up on the GBP/USD exchange rate, or 0.50%
Online Banking: 150 pips / 1.50%
Debit/Credit Card: 150 pips / 1.50%

Withdrawal fee of $5 on all withdrawals (deposits are free other than the above FX charges – see how to avoid them below)

$10 monthly inactivity fee if no login after 12 months
Actively Managed Portfolio Management FeesN/ANo additional charge for investing in ready-made Smart Portfolios
Individual Stocks & Shares / Share DealingFX fees apply per transaction on non-GBP instruments:

Basic plan: 0.99%
Standard plan: 0.59%
Plus plan: 0.39%
None (no additional FX fees either)
CFD TradingN/ABroker spread applies on CFD trades, varies by asset

Daily financing fees on all CFD trades kept open overnight (inc. weekends), exact fee depends on instrument being traded

Neither eToro or Freetrade charges commission on share dealing (including on ETFs). 

As you can see from the table above, though, neither platform is totally free from charges. 

Below we’ll take you through the fees applied by each platform.

Deposit & Withdrawal Fees

Before you can trade or invest, you have to fund your account. eToro accounts are always denominated in US dollars.

As a UK user, this means when you deposit pounds (GBP) into your account, they’ll be converted to US dollars. 

Freetrade does not charge for funding your account and you can deposit money via Apple Pay, bank transfer or Direct Debit.

eToro Deposits & Withdrawals

There’s an FX conversion fee whenever you deposit into or withdraw funds from your eToro account using a currency other than US Dollars. 

This is because all eToro investment accounts are denominated in US Dollars no matter your location. The rates for depositing in GBP are outlined below:

  • Bank Transfer: 50 pips mark up on the GBP/USD exchange rate, or 0.50%
  • Online Banking: 150 pips / 1.50%
  • Debit/Credit Card: 150 pips / 1.50% 
How to avoid eToro deposit fees via Revolut

There are two ways to minimise these fees. First, you can open an account with Revolut, the digital finance app. Revolut allows you to open a US Dollar account for free and charges no conversion fees when exchanging currency between your own accounts.

So you can open a GBP account with Revolut, then open a USD account. Fund your Revolut account for free in GBP and then convert it to USD for free. 

You can then fund your eToro account by bank transfer. You can find your USD bank details in your Revolut account. 

Or can you use your Revolut virtual card to pay into your eToro account directly in USD. Go to your Revolut virtual card details in the app, then go to settings and choose to ‘spend from’ your USD balance.

How to avoid eToro deposit fees via eToro Money

Alternatively, you can open an eToro Money account. This is eToro’s version of a digital payments and banking service.

All deposits via eToro Money into your eToro investment account in GBP are free. Holding an eToro Money account is currently also free, but this may change in 2024 as eToro is planning to bring in monthly fees, much like you see with Revolut and Monzo accounts.

It should also be noted that money held in an eToro Money account does not fall under FSCS protection, but it is held in a segregated and protected bank account.

eToro money customers can also directly purchase GBP denominated shares using their eToro money GBP balance without incurring FX fees.

eToro withdrawal fee

There is a fixed $5 withdrawal fee on all withdrawals from your eToro investment account. This is in addition to any FX conversion fees if withdrawing in a currency other than USD.

If you intend to make more frequent withdrawals from your account – which is not optimal for long term growth – then these fees can add up. 

There’s a minimum withdrawal amount of $30. So, the lower the amount of your withdrawal the higher the fixed fee becomes in percentage terms.

The withdrawal fee applies even into an eToro Money account. 

Winner: Freetrade

Freetrade – Free share worth up to £100

Click our link below, open a Freetrade account, fill in the W-8BEN form and fund your account with at least £50 and your £10 to £100 free share will be revealed within 7-10 days.

Freetrade is regulated by the FCA and has FSCS protection.

Platform charges

eToro does not charge any ongoing platform fees. So, no monthly subscription fees and no annual custody fees based on the size of your portfolio. 

Freetrade has 3 types of subscription plan with different prices and associated features:

  • Basic plan: Free
  • Standard plan: £5.99 per month or £59.88 per year
  • Plus plan: £11.99 per month or £119.88 per year

We cover the products and features with each plan in more detail later. But, with a Basic plan you only get a General Investment Account (GIA). With a Standard plan you can open a Stocks and Shares ISA and with a Plus plan you can also open a Self-Invested Personal Pension (SIPP).

Winner: eToro

Trading / Dealing Fees

Once you’ve funded your account, eToro charges no commission, dealing fees or FX charges when directly buying or selling shares and ETFs. Note that CFD trading does come with additional charges – more on this below.

Freetrade also doesn’t charge commission or dealing fees. But, it does charge FX fees on any non-GBP investments. So, if you want to buy Tesla shares, for example, you’ll be charged an FX fee.

The fee depends on which Freetrade plan you subscribe to and is applied to the GBP value of your market order.

Freetrade’s FX fees:

  • Basic plan: 0.99%
  • Standard plan: 0.59%
  • Plus plan: 0.39%

If you want to frequently trade in US (or other non-GBP) stocks, these fees can add up quickly. Especially on Freetrade’s Basic plan.

Remember, if you follow our steps above for avoiding eToro’s FX fees on deposits then you can avoid FX charges with them. This makes it much cheaper to invest in US and international shares with eToro than it is with Freetrade.

Winner: eToro

eToro CFD Fees

With eToro you can trade Contracts for Difference (CFDs) which are leveraged instruments. 

Over to Talal, our CFA qualified former institutional investment advisor, to explain how CFDs work. 

CFDs Explained

A Contract For Difference (CFD) is an agreement entered into by you and your broker centred around the price of an underlying asset.

By entering a CFD trade, you and your broker each agree to pay each other the difference between the opening and closing price of an underlying asset without either of you owning it. Because the underlying asset isn’t actually involved, CFDs are considered derivative financial instruments (they derive their value from an underlying asset).

If you enter a BUY trade and the underlying asset goes up in price, your broker pays you. If the asset goes down in price, you pay your broker.

Because the underlying asset isn’t directly being traded, CFDs can be traded in multiples of the underlying asset’s price. This is where leverage comes in. Brokers will lend you several times the value of the underlying asset to amplify the trade.

For example, 1:5 leverage on a stock worth £100 means that you can enter a CFD trade worth 5 shares (5 x £100) and only need to put up £100 of your own money. Your profit or loss on the trade is also amplified by 5 times.

There are two main fees associated with CFD trading on eToro – spread and overnight fees.

CFD Spread

You will be charged a spread set by eToro in addition to the market spread.

Broker spread is effectively a mark up on the market-quoted buy and sell price of an asset. Brokers add their own spread to make money instead of charging dealing fees.

eToro’s spread varies by asset or instrument traded and can fluctuate depending on market conditions and liquidity.

We checked the spread on a sample of assets (6th May 2024) on eToro and we outline these below:

CFD AsseteToro Spread
Gold (1:20)45 pips
AAPL Stock (1:5)57 cents
GBP/USD (1:30)1.7 pips

Note: we have recalculated some of the spreads above for like-for-like comparisons, e.g. from percentage to cents

CFD Overnight Fees

When trading CFDs you will be charged daily financing costs for every trade kept open overnight. This is, essentially, interest on the leveraged financing that eToro is providing to you. 

CFD brokers have lending facilities with institutional banks (think of a very large overdraft) and they use this credit from the bank to lend you the money so that you can trade using leverage.

The interest charged to you on your overnight positions is a mark-up on the interest rate the broker is charged by their bank. eToro is transparent about this. At the time of writing, eToro’s overnight fee on BUY orders for stocks is 6.4% + the benchmark rate. 

In the UK, SONIA is widely used as the reference rate for interbank lending, and the 1 month SONIA rate is used by eToro to price GBP CFD transactions. At the time of writing, the 1M SONIA rate is 5.20%, which means eToro is currently charging 11.60% annual interest on long UK stock CFD positions.

This is cheaper than most other CFD trading platforms we’ve reviewed, including XTB, Trading 212 and Plus500. For more on how these platforms compare to eToro, read our eToro vs XTB, eToro vs Trading 212 and eToro vs Plus500 guides.

For example, for a BUY Gold order eToro’s annualised interest works out to 154%. For XTB it’s a whopping 209% but this is still cheaper than Trading 212’s 290%!

Ready-Made Portfolios

eToro provides a range of what it calls ‘Smart Portfolios’. These are ready-made portfolios based around specific themes. More on how these work later in this article.

There are no ongoing management or fund charges for holding Smart Portfolios. Instead you will pay market spread on the trades required to build the portfolio you choose.

Freetrade does not offer ready-made portfolios.

Winner: eToro

Freetrade vs eToro: Products & Accounts

This is where the differences between Freetrade and eToro become more apparent.

Freetrade offers a Stocks and Shares ISA for Standard plan subscribers and a Self-Invested Personal Pension (SIPP) for Plus subscribers. ISAs and SIPPs are tax-efficient investment accounts for long term saving and investing.

Table of Freetrade's account options and subscription plans
Freetrade’s account options vary based on your subscription plan

Our top-rated Stocks and Shares ISA provider is Interactive Investor – read more in our guide to the best Stocks and Shares ISA provider. If you’re interested in investing through your pension, read more in our guide to the best SIPP provider.

With Freetrade’s ISA and SIPP options it’s set up to cater to long term investors.

Currently, Freetrade doesn’t feature in our top Investment ISA or SIPP guides – although this may change as they roll out more features and investments.

Remember, Freetrade’s Standard plan is £5.99 per month (or £59.88 per year) and their Plus plan is £11.99 per month (or £119.88 per year). ‘Plus’ subscribers get access to both an ISA and a SIPP.

Freetrade’s ‘freemium’ model also means that to get full access to all features and products you have to be on a paid plan. 

eToro does not offer an ISA or a SIPP – only a Trading Account. But, there are no subscription fees with eToro’s account and all investment options and features are accessible with it. 

More recently, eToro launched eToro Money which is its version of a digital banking style service. You can get an eToro Money debit card to spend with and make international payments. 

We also outlined above how you can avoid a lot of the withdrawal and FX conversion charges with an eToro Money Account.

Winner: Freetrade

Freetrade vs eToro: Investment Options & Services

So, how do Freetrade and eToro compare on investment options and features?

First take a look at how the number of tradable assets compares with each platform before we go on to compare other services and features. 

Asset / InstrumentFreetradeeToro
Shares, ETFs & Investment Trusts6,000+3,600+
Stocks & Shares CFDsNone3,600+
UK Treasury BillsYesNo
CryptocurrenciesNone74
CommoditiesVia ETFs only32
CurrenciesNone52
IndicesVia ETFs only20
Ready-Made PortfoliosNone86+ Smart Portfolios
CopyTrader Verified TradersN/A24,000+

At the time of writing (May 2024), eToro offers over 5,000 instruments to trade and Freetrade offers over 6,000.

But, eToro offers a much wider choice of trading options through its CFD instruments. Freetrarde does not offer CFDs.

Despite not offering CFDs, Freetrade does offer leveraged ETFs. These are still considered complex financial instruments due to the amplified profits or losses compared to unleveraged investing.

A major difference that Crypto fans will be interested in is that eToro offers over 70 cryptocurrencies to invest in. Freetade does not currently offer cryptocurrencies so if you want to trade or invest in cryptocurrencies then eToro is the clear winner. 

Freetrade now also offers UK Treasury Bills as it seeks to compete with the investment options at more traditional brokers. Essentially, these are UK government bonds.

The bigger, more traditional investment platforms such as Interactive Investor and Hargreaves Lansdown offer hundreds of government and corporate bonds to invest in. Read more on how eToro compares to Hargreaves Lansdown in our eToro vs Hargreaves Lansdown guide.

Both platforms offer all the major US shares as well as smaller listed companies such as Manchester United shares.

Overall, eToro offers the greater variety in the instruments it provides and is the better platform for traders.

Winner: eToro

eToro

eToro is our top-rated investment app, it’s easy to use, has lots of innovative features and allows you to trade commission-free.

Capital at risk if you invest.

eToro CopyTrader

eToro is ahead of Freetrade when it comes to social community features, including its famous CopyTrader feature. 

CopyTrader allows you to automatically copy the trades of another verified user on eToro’s platform. Copy trading in general has seen a huge rise in popularity in recent years, with some seeing it as a way of accessing the markets without having to learn to trade themselves.

eToro's CopyTrader
You can copy the trades of eToro’s top traders

However, CopyTrader is a high-risk proposition as very few traders will come from a professional background with a solid track record. You should always check the record and credentials of a trader before deciding to copy their trades.

As part of its CopyTrader feature, you can become a Popular Investor and receive payment from eToro based on the amount of money invested by other users in your copy trades. 

So if you’re a successful trader and want to earn additional income without much extra effort then eToro’s Popular Investor programme is worth considering. You will have to meet their minimum criteria which can be viewed on the eToro website.

Freetrade has no copy trade feature.

Winner: eToro

Freetrade vs eToro: Social Communities

Aside from its CopyTrader feature, eToro also has a highly active community. This works much like a social media platform, where users can post their thoughts on a feed or leave comments under specific stocks and assets. 

eToro’s home screen looks a little like a social media feed:

eToro's community feed on the app
You’ll see eToro’s social media-like community features

Occasionally we found some useful discussions going on when we’ve read through eToro’s community. But we would advise you to use caution when reading other people’s market opinions and investment decisions. 

There’s a lot of posturing in the trading world so make sure to do your own research before listening to advice posted on the community forums.

Freetrade doesn’t offer anything that can compare with the social media aspect of eToro.

Winner: eToro

Freetrade vs eToro: Fractional Investing

Fractional shares are an increasingly common feature seen in trading and investing apps. 

As the name suggests, you’re able to purchase a fraction of a single share rather than a whole share. This has become more popular among younger investors who have less capital to invest but want to invest in big-name stocks that have high share prices.

Well-known names such as Microsoft, Amazon and Meta (Facebook) all have triple-digit share prices. For those with smaller amounts to invest, owning single shares of each could take up an entire portfolio.

As a fractional shareholder, you’ll still get voting rights and dividends in proportion to your fractional shareholding.

Both Freetrade and eToro offer fractional shares.

Freetrade vs eToro: Ready-made Portfolios

Ready-made portfolios have become a popular way for passive and beginner investors to quickly get invested. This works by allocating your money to an existing investment portfolio that’s setup and managed by someone else, such as an expert investor.

The most popular examples of these are with robo-advisors, but many other investment platforms now offer ready-made portfolios.

eToro’s are called Smart Portfolios and they’re highly innovative compared to robo-advisors. Some are built around specific industries or sectors, while others are designed to copy the investments of well-known investors such as Warren Buffett and Carl Icahn.

A few of eToro’s Smart Portfolios are created by professionals who claim to use proprietary strategies and technology to manage their portfolios.

However, Smart Portfolios come with risk and you should be comfortable with all of the details surrounding the portfolio before committing your money. You should also regularly monitor performance and make your own adjustments where you see fit. 

The minimum investment for eToro’s Smart Portfolios is $500. There are no additional fees for investing in them.

Freetrade doesn’t currently offer anything comparable. 

Winner: eToro

eToro vs XTB: Interest On Uninvested Cash

Cash held in your Freetrade account will receive interest. 

The interest rate will depend on which Freetrade plan you’re subscribed to as follows:

Basic planStandard planPlus plan
Interest paid on balances up to£1,000£2,000£3,000
Interest rate1%3%5%

Correct as of 13th May 2024

Plus plan subscribers can get 5% interest paid on balances up to £3,000 which is competitive compared to savings accounts.

However, it’s not as competitive as XTB which pays 5.2% on GBP geld in your investment account – with no balance limits. As XTB is an FCA regulated platform, you also get FSCS protection on your cash. This provides regulator protection on up to £85,000 of cash held with XTB.

So, if you have spare cash sitting in your portfolio, it’s nice to know it’s earning something. eToro does not pay interest on uninvested cash so if you tend to have cash in your portfolio then you may prefer Freetrade (or XTB).

Winner: Freetrade

Freetrade vs eToro: Which Has The Better App?

Apple App Store ratings:
Freetrade:
4.3 from over 13,000 ratings
eToro: 3.9 from over 9,000 ratings

Freetrade is an app-only investment platform – although its web version is under development. So it may be no surprise that it has a higher app rating on the Apple store compared to eToro, although eToro has the higher Trustpilot rating.

Freetrade and eToro both have comprehensive investing apps with lots of features and tools.

However, eToro’s really stands out due to its social community features. When you log into the app you’ll be presented with a home tab that looks very similar to a social media homepage:

eToro's home page in the eToro app
eToro’s home page feed

When you switch over to eToro’s Discover tab and choose an instrument to trade, you can choose how you want to trade it. For example with leverage or without leverage, or to buy or sell.

Using the eToro app is easy, everything is laid out clearly and neatly. 

Freetrade’s app is closer in appearance to the apps of the established, traditional platforms – although it still looks nicer than theirs.

Freetrade’s app is less social. It’s still great to use, though, and nobody will have difficulties navigating around. 

Your home screen will show you your accounts and their current portfolio breakdowns between investments and cash. 

The discover tab is nicely presented and groups investments by theme, type, geography and more.

Freetrade's Discover tab in the Freetrade app
Freetrade’s Discover tab in its app

Overall, it’s hard to separate the apps as they do cater to slightly different types of investors. eToro’s app is big on social community features and fees and geared towards trading. Freetrade’s is a little more traditional and provides solid functionality. 

It’s hard to state that one app is clearly better than the other, but we give the edge to eToro for its in-built social features.

eToro also has a sophisticated web platform. 

Winner: eToro

Fretrade vs eToro: Which Has The Better Customer Service?

Solid customer support is important for any platform where you commit your money.

When contacting customer support with both Freetrade and eToro, you’re directed in the first instance to their help centres and in-app chat services. We’ve been through both platform’s help centres and they cover a huge range of frequently asked questions and guides. 

We also tested trying to speak to a live customer agent in both apps.

With a Freetrade Basic plan the average response time is 2 days (at the time of writing) which is disappointing.

With a Plus plan you get access to ‘priority’ customer service, although it was initially unclear what this means.

We asked Freetrade’s chat bot and a customer service agent replied around 24 hours later:

Chat with a Freetrade customer support agent
We recieved a response around 24hrs after we asked a question

With eToro, customer support in the first instance is also a chatbot. If it can’t answer your question it will either connect you to an agent or raise a help ticket. Tickets are resolved via email. 

eToro isn’t clear on its human agent support hours but we were able to connect to a live agent at various times of the day on weekdays. However, during one attempt we were told there are no live agents available and we were directed to raise a ticket instead. 

You’re also able to speak to an account manager at eToro, including via calls. They can give guidance on how to use your account and the various methods of investing and trading. Freetrade has no phone contact or support at all.

Winner: eToro

Freetrade vs eToro: Customer reviews

We always check the opinion on popular review sites of the platforms we review. 

On Trustpilot, one of the best-known review sites, eToro has a rating of 4.2 out of 5 from over 23,000 reviews (at the time of writing). Many reviews praise eToro’s customer service, in particular the ability to speak to an account manager, as well as its platform features.

Some reviewers mention that the ID verification can take longer than they’d like. But this is increasingly common among investment platforms in the UK with the FCA ordering stronger ID and money laundering checks.

Also on Trustpilot, Freetrade is rated at 4.0 from over 3,000 reviews. Many reviews praise freetrade’s app and low pricing compared to traditional investment brokers.

Some critical reviews concern how long it takes to transfer in or out of Freetrade. In some cases, customers claim they are left waiting more than 2 months for the transfer to complete.

Winner: eToro

Freetrade vs eToro: Is My Money Safe?

Both eToro and Freetrade are regulated by the Financial Conduct Authority (FCA) and have Financial Services Compensation Scheme (FSCS) protection.

This means that if either company were to go bust, your money would be protected up to the value of £85,000 by the regulator. 

Furthermore, as eToro and Freetrade are FCA-regulated entities you are able to complain to the Financial Ombudsman Service (FOS) if you cannot resolve a dispute directly with them. They must comply with rulings by the FOS. 

Freetrade and eToro also segregate client money from their own funds using custodian accounts held with secure 3rd parties. These also fall under FSCS protection and standard practice in the industry.

It should be noted that any money held in an eToro Money account does not fall under the FSCS. 

Trading CFDs comes with a high level of risk and below is the FCA-mandated CFD trading disclosure of eToro.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% 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.

Cryptocurrencies markets are unregulated services which are not governed by any specific European regulatory framework (including MiFID). Therefore, when using eToro’s Cryptocurrencies Trading Service, you will not benefit from the protections available to clients receiving MiFID regulated investment services, such as access to the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service for dispute resolution.

Freetrade vs eToro: Pros & Cons

To summarise our eToro vs Freetrade comparison, we’ve outlined below the main pros and cons of each investment platform.

Freetrade Pros & Cons

Pros

  • Over 6,000 US, UK and European shares, ETFs and investment trusts
  • Invest in UK Treasury bills
  • Basic plan is free (FX fees apply on non-GBP shares)
  • Stocks and Shares ISA and SIPP available on paid plans
  • Commission-free shares and ETFs
  • Low minimum investment of £1
  • Fractional shares
  • Interest on uninvested cash
  • FCA regulated and FSCS protection

Cons

  • Must pay for access to all products and features
  • FX fees apply on non-GBP transactions
  • No web platform (app-only)
  • No CFD trading
  • Does not offer a Lifetime ISA or Junior ISA

eToro Pros & Cons

Pros

  • Over 5,000 instruments to trade
  • Wide range of assets to trade, including shares, commodities, FX, ETFs and cryptocurrencies
  • Commission-free when buying shares and ETFs
  • No monthly subscription costs or annual fees
  • Trade using leverage with CFDs, but comes with much greater risk
  • Fractional shares
  • CopyTrader service allows you to automatically copy the trades of other eToro traders
  • Over 65 Smart Portfolios which allow you to invest in ready made funds
  • Huge range of chart tools and analysis 
  • User friendly app packed with features and in-app analysis
  • Sophisticated web platform as well as app
  • FCA regulated and FSCS protection

Cons

  • No ISA or pension products
  • Transactions fees can add up if regularly depositing and withdrawing money
  • Minimum investment of $500 for Smart Portfolios
  • Does not pay interest on uninvested cash

Freetrade vs eToro: Final Verdict

eToro is our winner in our Feetrade vs eToro comparison. It’s also our top pick for best investment app in the UK.

eToro has the edge due to having more innovative features, such as CopyTrader and Smart Portfolios, no subscription fees and for supporting cryptocurrencies and CFD trading. 

You can also avoid most FX fees with eToro by following the steps we outlined above. 

eToro

eToro is our top-rated investment app, it’s easy to use, has lots of innovative features and allows you to trade commission-free.

Capital at risk if you invest.

But, it’s a close call. eToro charges a fixed $5 withdrawal fee on all withdrawals and its FX conversion fees can add up if you don’t follow our guide to avoid them. Both eToro and Freetrade offer commission-free share dealing.

Freetrade is still a great investment app, though. It pays you interest on uninvested cash unlike eToro. It also offers a Stocks and Shares ISA and a SIPP if you subscribe to a paid plan, both of which are tax-efficient products for long term investing.

However, Freetrade lacks a web platform (although this is in development) and charges FX fees on all non-GBP transactions. So, frequently trading US shares can get expensive. But overall it’s still one of the better investment platforms.

Freetrade – Free share worth up to £100

Click our link below, open a Freetrade account, fill in the W-8BEN form and fund your account with at least £50 and your £10 to £100 free share will be revealed within 7-10 days.

Freetrade is regulated by the FCA and has FSCS protection.

eToro is our winner

eToro’s social community features, CopyTrader, Smart Portfolios and lack of subscription fees make it our winner.
Capital at risk if you invest. FSCS protected.

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Get £200 cashback with Interactive Investor

Get £200 cashback when you invest or transfer a SIPP to Interactive Investor. Terms apply.

Capital at risk if you invest. Interactive Investor is regulated by the FCA and has FSCS protection.

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