Hargreaves Lansdown to refund £100 in share trading fees to clients – is the deal worth taking?

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DIY investment giant Hargreaves Lansdown is offering investors £100 in share trading fees.

Hargreaves Lansdown* has launched £100 online trading fee refund For new and existing clients, buy or sell shares, investment trusts, ETFs, bonds or gilts from today until June 21.

But while Hargreaves Lansdown offers free share trading, its standard share trading fee of £11.95 is higher than many rivals, so is this a good deal? We take a look.

Stock Trading: How Much Does It Cost?

Trading shares, investment trusts, corporate bonds and ETFs costs £11.95 per trade at Hargreaves Lansdown. If you trade more than 10 times a month, share trading costs are reduced to £8.95 and again to £5.95 if you trade more than 20 times a month.

The trading fee refund offer will help you recover a good amount of money, but it is worth noting that AJ Bell*has £5 dealing charges and Interactive investor*charges £3.99, while some app-based platforms such as Trade 212* They don’t charge anything at all, although they may not offer investment funds.

Interactive Investor has a £100 free trading offer*but that’s only if you open a new Isa before 19 May 2024.

Higher share trading charges make Hargreaves Lansdown one of the most expensive investment platforms for investing in shares, investment trusts and ETFs if you make multiple trades per month.

The flip side is that rivals including Interactive Investor and AJ Bell charge for trading mutual funds at £3.99 and £1.50 per trade respectively, something Hargreaves Lansdown offers for free.

HL’s fee structure can keep overall costs down for those who primarily buy and hold listed investments on the stock market by capping its annual account charge fee from 0.45 per cent to £45 for them.

Regular monthly investment in shares and some investment trusts is £1.50 with Hargreaves Lansdown, while dividend reinvestment is 1 per cent, with a minimum charge of £1 and a maximum of £10.

Investors pay an account fee of 0.45 per cent on their total fund investments up to £250,000, 0.25 per cent up to £1 million, 0.1 per cent up to £2 million sterling and nothing more.

See below for a more detailed breakdown and comparison of investment account fees.

Hargreaves Lansdown said that trading fee refund offer* is aimed at early bird investors.

Early Isa investors can earn higher returns. This is because they can earn up to an entire year of dividends and potential market growth sooner than those who leave until the end of the fiscal year to invest.

Someone who invested their entire Isa allowance into a global tracker on the first day of the tax year over the last decade would have seen their investments grow to £360,500, compared to £322,500 if they had left it until the last day.

If you spread your investment evenly over the year using regular investments, you would have £343,500, according to Hargreaves Lansdown’s numerical calculations.

Ruchir Rodrigues, commercial and client director at Hargreaves Lansdown, said: “Our share offering encourages investors to use the benefits of being an early riser to their advantage and help those who want to invest for a better future.”

‘Early investment is incredibly sensible. The start of the tax year is by far the best time to take advantage of your new Isa and Sipp allowances, either as a lump sum or by setting up a regular investment, via direct debit, to take advantage of compound growth.

‘Your savings and investments will be protected from tax immediately and for up to a year longer than if you left them until the end of the tax year.

‘Tax-free allowances on dividends and capital gains were reduced on 6 April to £500 and £3,000 respectively, making it even more important to act early in the tax year. ‘