Halifax Sharebuilder Account - Anyone have one ?

Jazzmaster

I have been reading about the Halifax Sharebuilder accounts (where it costs £1.50 to trade, but where it seems you are only buying part of a share, not the real thing).

I am a novice and have been following my own 'fantasy shares' for a couple of months and would like to try the real thing, but I only have a small amount to invest (max. a grand over the year) so am not yet ready to spend £10 - £15 a trade.

Has anyone used this account ?

Is it a good deal ? ie. good way for a beginer to learn ?
Does it pay dividends or do you only earn when you sell ?
It seems to be encouraging buying and selling regularly rather than buying and holding.

What are peoples opinions ?

It looks good, but is it just a bank scam to get my money ??

cheerfulcat

Hi, Jazzmaster,

Has anyone used this account ?

I haven't used the account but I can tell you a bit about it. It is a sharedealing account - you are buying real shares, not parts of shares. The difference between the Sharebuilder and normal stockbrokers' accounts is that the Halifax one pools the investors' money and buys shares on certain days. This means that you have no control over the price at which you buy the shares.

Is it a good deal ? ie. good way for a beginer to learn ?

It is an excellent way to start buying shares because it makes it possible to deal in very small amounts.

Does it pay dividends or do you only earn when you sell ?

No dividends unless the shares you buy pay dividends.

What are peoples opinions ?

It looks good, but is it just a bank scam to get my money ??

I think that it's a good way to start building up a share portfolio. It's not a scam :-)

HTH

Cheerfulcat

saintstreaky

I have one, no problems with it. You get dividends (assuming the shares you've bought pay out of course) which can either be reinvested (no charge) or are left in your account to withdraw or buy other shares with.

There's no real catch, it's all kosher. However, you should be sure you understand how it works.

As Cheerfulcat says, you can only buy on certain days, allocated by Halifax in advance. However, for most people that's not a major issue.

I disagree about them encouraging you to sell often. I hope you've noticed that the £1.50 charge is only for buying - to sell costs more, off the top of my head I think it's £5, though this may increase for high-value trades. This can be done in real time, not just on set days. This is fine if you're thinking long-term and will keep adding more shares in the same company over time, but if you're into 'wheeling and dealing' it may affect you.

One other thing is that you can't always buy shares in every listed company. FTSE 100 and other popular shares, no problem, but obscure shares may not be available. I think this is because not enough people using Sharebuilder are interested, so they can't buy in bulk.

I've tended to spread mine over about half a dozen different companies, in different sectors ('as part of a balanced portfolio' - this is just a bit of fun, really), deciding each month which I fancy some more of.

So in summary, there's no catch - but make sure you understand exactly how it works.

basill

An alternative is http://www.share.com/ their buying fee is 1%, min £2.50.
Like the Halifax you buy shares in batches but you can buy 4 times a day, your deal will go into the next available batch.
If you wish to buy immediately you can choose to deal in real time for which the charge is a minimum £7.50.
I have found them to be very helpful and my initial request for info and a couple other email queries were fully answered extremely fast.



B

Jazzmaster

Thanks all,

I suppose I have nothing to lose ! If I go in with the knowledge that I could lose money anyway.

Just one more question (to Saintstreaky or anyone who has one)- do I have to buy something every month ?

Could I set up a portfolio at the begining, but then buy more after 3 months, then more a month later, then nothing for 5 months, for example ?

Their website seems to imply one lump sum at the begining OR monthly - can this be mixed ?

david78

There is no need to buy monthly if you don't want too. You can invest an initial lump sum, then invest another lump sum later.

You can invest occasional lump sums and mix these with monthly savings if you want.

On application they want to know if you want to invest monthly so they can set up the Direct Debit. But you can just apply to invest a lump sum, and then set up any monthly savings later.

Good luck.

BWZN93

Hi

Im interested in this account but I have a question i cant find the answer to - are you taxed on the dividends or profits you make (as you would be with a savings account that isnt an ISA??)

Jo xx

saintstreaky

First, to Jo, sorry I'm not an expert on tax. But yes, dividends are taxed - I think at 10%. If you're a higher rate tax payer, you have to pay the extra tax yourself I believe - not an issue for me sadly!

Jazzmaster, no, you don't have to invest every month (although the system is designed to encourage it). If you're investing relatively small amounts, you may decide to save up and invest more every other month or something. You can mix and match with lump-sums, as David says.