Trading 212 Invest vs ISA Account: which one is better?

Trading 212 is an online trading platform that gives the opportunity to its users to invest in CFDs and Stocks.

The Trading 212 Invest and the ISA accounts are offered only for stocks. The 2 accounts offer the same minimum deposit, same fees and almost same stocks and shares.

So what is the difference between a Trading 212 Invest vs ISA account?

 

Trading 212 Invest Account

The broker Trading 212 gives the opportunity to invest in stocks with an Invest Account. What makes the account unique is:

• Trading 212 Minimum deposit of $1
• 000+ available shares
• Shares fractions
• Commission free
• Autoinvest and Pies

The possibility to start investing with only $1 is a unique offer that only Trading 212 has.

For the Invest account there are more than 10.000 stocks and shares available to invest in. There are all the major companies in the world listed. To mention some, there is Google (Alphabet), Amazon, Facebook, Tesla, Ferrero, Gucci, etc.

You can find companies belonging to many different sectors: technology, fashion, telecommunication, transports, etc.

Depending on the amount of money available in the account, it is possible to buy a whole stock of a company, or a fraction of it. This might be the case, when a stock is worth more than the total money in the account.

It is very important to mention that once you buy a stock, you don’t own it. It is given to you by the broker as ETF, which stands for Exchange Traded Fund.

This type of account is also commission free. This means that you won’t pay and commission for your trades, deposit and for a currency exchange.

Finally, on this account you can also create an investing portfolio. This is a mix of different stocks, or fractions of them, all into the same big portfolio. Once you have created your portfolio, you can decide the return-risk ratio for it, the timeframe you want to invest for and the future deposits and withdrawals.

 

Trading 212 ISA Account

A Trading 212 ISA account is very similar to the Invest Account, with only one important difference: it is tax-free.

To have a full overview of the ISA account, here its main features:

• Trading 212 ISA Minimum deposit $1
• 000+ available shares
• Shares fractions
• Commission free
• Autoinvest and Pies
• ISA Tax-free

As mentioned above, also for the ISA account, it’s possible to start investing with only $1. Once you sign up for Trading 212, you can decide what type of account you want: Trading 212 Invest vs ISA vs CFDs.

For all Trading 212 accounts, you can deposit only $1. What you need to know is that what you have deposited into one type of account, ISA for example, can not be used to invest into another one.

The stocks and shares available are exactly the same between two accounts. Also the fact to invest in fractions, rather than a whole stocks is still available. Also in this case, all major companies such as google, Tesla, Amazon, Facebook are available. You can also sort the companies by sector or Country. For Instance the American companies are the majority of the ones in the list, but if you live in UK, you can also invest in some local banks, pharmaceutic companies or Travel Companies.

The ISA account is also commission free. This means that for every investment you do, there won’t be any commission charged. This applies also for deposits and withdrawals.

The Trading 212 ISA account has also the Autoinvest tool. With the autoinvest tool, it is possible first to create an investing portfolio and then let the system automatically invest it for you.

You can create as many investment pies as you want. For each of them you can buy as many stocks as you want, from different countries and sectors, until the money you deposited let’s you do it.

Once you have created a Pie, you can then see the forecasted return of it. If you are sure about your investment and start it, the system will take change and carry on with it. You can deposit more money into the pie, plan you new deposits, and also withdraw some money whenever you want. If you do so, the system will calculate automatically the new total into the pie and proceed with the investment plan you made.

Finally, what makes this account unique, it’s that it is tax-free.

ISA stands for Individual Savings Account. This means that it offers tax-free interest payments, meaning that you could get more for your investments.

There is a limit on the ISA tax free allowance, which is different from country to country. For the UK it is £20.000, for Europe depends on the individual Country.

Taking the example of the UK, it means that you won’t pay taxes for interests on your investments up to £20.000.

The calculation for this regime is done every year, and it counts the interests from the 1^st of January to the 31^st of December.

Finally, it’s very important to mention that a person can have only 1 active ISA account a year, and not more than one.

 

Trading 212 Invest vs ISA account: which one is better?

At the end of our analysis, we can say that the main difference between the 2 Trading 212 accounts is on taxes.

If you are planning to invest in stocks and shares with an amount of money below £20.000, you would probably consider to open an ISA account. This allows you to keep the entire of you interests without paying any taxes.

If you already have an ISA account with another company, you are planning to invest more than £20.000 or even open multiple accounts, you would probably consider a Trading 212 Invest account.

The stocks available are the same as the ISA account, and also the Investment Pies feature is always available.

 

If you want to know more about the Trading 212 platform, its regulations, minimum deposit and demo account, you can read our review

Finally, you you are considering investing in CFDs, you can check out our comparison of Plus500 vs Trading 212