Drip feeding an ISA to buy iShares - no commission

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
9 replies 5.8K views
sav_csav_c Forumite
42 Posts
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
Hi All,

Don't know if I'm teaching everyone to suck eggs but here goes anyway.

If you open an ISA (Mini or Maxi) with comdirect.co.uk you can put money into it on a monthly basis e.g. £100 and then use that money to buy iShares (Exchange Traded Funds that track a market e.g. FTSE 100, but are traded as shares) with no commission or stamp duty to pay out. This is great because the commission on a trade of £100 would be £12.50 + stamp duty of 0.5%. Obviously not economically viable.

This is much better than buying an expensive tracker policy from a provider with high upfront charges and huge spreads built in to relieve you of your hard earned money!

In the comdirect account they charge you £25 a year for the management fee of the ISA but that's it until you sell up. This is about the lowest management charge I could find.

I've been doing this for a while and have saved quite a fair bit on the commissions and invested the money instead.

iShares are explained on https://www.ishares.net

If anyone is interested in opening an account send me a Private Message with your email address and I'll send you a link where we both get £50.

Comdirect will pay up to £300 in transfer fees if moving from a different provider.
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Replies

  • Very interested in this

    How do I get your Private email address??...I'm new to the forum

    regards

    Oddjob
    Old Faithful we roam the range together,
    Old Faithful in any kind of weather,
    When the round up days are over,
    And the Boulevard’s white with clover,
    For you old faithful pal of mine.
    Giddy up old fella cos the moon is yellow tonight,
    Giddy up old fella cos the moon is mellow and bright,
    There’s a coyote crying at the moon above,
    Carry me back to the one I love,
    And you old faithful pal of mine.
  • dunstonhdunstonh Forumite
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    These can be useful for those with larger amounts. However, for smaller contriubtions, this can be more expensive than utilising a low cost ISA provider and tracker.

    There is also a limited number of areas to choose to invest although there are new areas coming out every few months.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • I would disagree that this is not for people wishing to put in small amounts. I have set this up for my wife, she pays in £100 per month on a standing order, I log in when the money has cleared and buy up about 20-25 FTSE100 iShares. This is the equivalent of paying £100 into a FTSE100 tracking fund - with the obvious exclusion of the fund manager and his sizeable cut.

    This is very viable since there are NO commission expenses and the spread (i.e. the difference between the price you can buy at and the price you can sell at) is not more than a penny or two. The spread on unit trusts is typically 6%.
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  • dunstonhdunstonh Forumite
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    This is very viable since there are NO commission expenses and the spread (i.e. the difference between the price you can buy at and the price you can sell at) is not more than a penny or two. The spread on unit trusts is typically 6%.

    It is typically 4-5%. 6% is the sort of spread you have when you buy from the banks. However, many online providers do not charge any spread at all.

    Take the fidelity moneybuilder uk index fund. Go with no initial charge and an annual management charge of 0.5%. With £1200 (ignoring monthly calculation for convenience) and you have an annual charge of £6 compared with the charge you mention of £25.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Hi,

    I would like to continue responding to this thread but have trouble finding it with so much (excellent) traffic. How can I flag to log straight back in for future? :-[
    Old Faithful we roam the range together,
    Old Faithful in any kind of weather,
    When the round up days are over,
    And the Boulevard’s white with clover,
    For you old faithful pal of mine.
    Giddy up old fella cos the moon is yellow tonight,
    Giddy up old fella cos the moon is mellow and bright,
    There’s a coyote crying at the moon above,
    Carry me back to the one I love,
    And you old faithful pal of mine.
  • dunstonhdunstonh Forumite
    106.7K Posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    ✭✭✭✭✭✭
    Hi,

    I would like to continue responding to this thread but have trouble finding it with so much (excellent) traffic. How can I flag to log straight back in for future? :-[

    Click the notify of replies button at the bottom of the thread and you will get an email when a new message is posted to it. You should click it on each visit as YABB doesnt seem to remember your setting.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Lennys_ShinpadLennys_Shinpad Forumite
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    Just bringing this thread back to the present.

    Does anybody know which is the most cost-efficient way of buying iShares through an ISA?

    p.s. I'll be looking at investing £200 pcm.

    Thanks.
    Save £6k in 2015 - Jan £500
  • SobraonSobraon Forumite
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    I use Interactive Investor (http://www.iii.co.uk/). The ISA is built on the Halifax 'Share builder system. So far this year I have only paid duty, as purchases have been commission free. But of course be sure to DYOR!
  • Sobraon wrote: »
    I use Interactive Investor (http://www.iii.co.uk/). The ISA is built on the Halifax 'Share builder system. So far this year I have only paid duty, as purchases have been commission free. But of course be sure to DYOR!

    Anyone else had any experiences (good or bad!) with Interactive Investor ISAs? I'm thinking of transferring to them because their site is easy to use and the charges are 1) obvious and 2) reasonable. Currently with Equiniti and if I were to say it 'sucks' I'd be being generous :D
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