Selftrade - How does their Inactivity Fee work...exactly?

DoctorW

Hi,

I've recently transferred my dealing account (Vanguard/Blackrock funds only) to Selftrade from CSD after it became more economical and will likely be doing the same with my CSD ISA in the new financial year. My one question I've not been able to see from the great Monevator platform comparison or any other searches on these boards is how the Selftrade Inactivity fee works.

It says if you make a trade in one account, then no Inactivity Fee (£8.75 + VAT per quarter) is charged on any of your accounts.

So I'm assuming if I have a Dealing Account and an ISA with Selftrade and I make no trades, I am liable to pay £8.75 x 2 (per account) + VAT per quarter - is this right?

Can anyone confirm my suspicion that the free (on Selftrade) Fund purchases do not count towards making a 'trade' to avoid the inactivity fee - and that I'd have to purchase a traditional 'share' in a company or such? Is that how it works?

Has anyone came up against a similar quandary, wondering whether it's better to buy a few shares every quarter in X, Y or Z for £12.50 per trade, to avoid an inactivity fee of £8.75 + VAT per quarter per account? Or is it better to just take the Inactivity Fee on the chin as it's still potentially cheaper than say 0.45% fee on total invested as with Hargreaves or 0.25% with Charles Stanley.

Hope I haven't waffled on too much and my question is understood

Thanks in advance of any replies

D

cloud_dog

I think you are over complicating the situation.

It is an inactivity fee. Therefore if you are active (make an investment) you are not inactive (I know this is obvious but..) and you will not be charged the inactivity fee. Do not confuse the fact that you do not pay for the investment activity.

See....

The Trading Inactivity Fee applies per customer and covers all Selftrade accounts held in your sole name. If you make a single trade in any of the accounts you hold in a calendar quarter, none of your accounts will attract the inactivity fee. This does not include Investment Club, joint accounts and corporate dealing accounts, which are treated separately even if you are named on those.

Atreyu107

'Free' fund trades count as activity.

It's a fairly simple concept - make any kind of trade and you'll avoid the fee for that quarter. Note that IPO subscriptions and corporate action activity such as rights issues elections don't count as activity.

Source: I used to work for Seltrade (for my sins...)

grey_gym_sock

if you do pay the inactivity fee, it is only once per customer. so £42 per year (inc. VAT).

if you have over £16,800 in funds, then that is cheaper than paying CDS 0.25% a year.

ed44

Buy some shares that pay a quarterly dividend and are eligible for automatic dividend reinvestment, e.g. CTY.

Total yearly cost 4 * £1.50 = £6.