Trading 212 Newbie

keadd1985

Hi again all!

ive opened a trading 212 account (all three types, invest, invest isa and cfd)

from what I’ve read cfd can be an easy way to loose money for a newbie! if I chose to do this and my account went negative am I liable for the difference?

also for small deposits , I’ll probably start with £500 or £1000 would there be any benefit of depositing and using the isa or the standard invest account?

cheers all!

masonic

Why open all three account types? Most people start investing with some sort of objectives in mind, and a long-term plan. What are you trying to achieve?

keadd1985

When opening it was just an extra tick box for all three. I wasn’t really sure which would be best so ticked them all.

i think I’ll stick with either invest or invest isa though as cfd looks too risky.

i just wondered what the benefits of the two would be.

im looking to slowly invest and learn over a few years really to try and beat the terrible savings account rates that are on offer at the moment.

masonic

An ISA saves you the headache of having to track capital gains and income for tax purposes, or pay tax on your income and gains if you make enough to do so. It is well worth using an ISA from the outset as it will become invaluable in future years when your investments are larger.

Most newbies are well advised to avoid investing in individual shares. While ETFs and investment trusts exist that occupy the same sort of space as more commonly used investment funds, they are more complex products with other risks. Trading212 does not provide access to those more commonly used investment funds.

keadd1985

Brilliant, thanks. With regards to an isa, there is obviously a 20k limit for this tax year. When it roles over to the next tax year does that 20k (or whatever was invested) remain tax free? And so on for future years, are there any limits as to a maximum balance?

using the isa account seems like there are no drawbacks so not sure why there is even a standard invest account. 

ColdIron

For some that £20K can be quite constrictive

keadd1985

Fair point...

my me, maybe investing 5k max a year an isa would be the way to go I guess? Does it remain tax free for years to come even when say I build up to over 20k would the whole amount remain tax free?

ColdIron

Everything you put in an ISA remains tax free until you take it out. Theoretically you could build a portfolio worth millions. The £20K annual allowance just limits how much cash you can add to it from outside the ISA system

Alexland

Its all very nice them giving you a sign-up bonus but I would still be reluctant to use Trading 212 for any serious money and would prefer to stick with a more established platform with a more transparent business model.
Normally when starting investment you would consider your financial objectives, pick a suitable tax wrapper mix (eg Pensions, ISAs or Lifetime ISAs if under 40) then pick a suitable fund for your objectives and volatility tolerance. It's a bit backwards to start with only the limited account and investment options that Trading 212 provide and then consider "how do I make the best of this provider because they don't charge trade fees? Oh I had better start buying individual shares". You are in danger of falling into the trap where the tail wags the dog.

John_

keadd1985 said:

Hi again all!

ive opened a trading 212 account (all three types, invest, invest isa and cfd)

from what I’ve read cfd can be an easy way to loose money for a newbie! if I chose to do this and my account went negative am I liable for the difference?

also for small deposits , I’ll probably start with £500 or £1000 would there be any benefit of depositing and using the isa or the standard invest account?

cheers all!

Yes, you are liable for all losses. You’ll likely find your positions closed out if your margin account hits zero.

Albermarle

Trading CFD's is basically gambling and you are significantly more likely to make a loss than a gain.
Investing ( as opposed to trading ) is a long term game where you are significantly more likely to win than lose , although you need to work on a long time frame, ideally >10 years to ride out short term volatility in the markets.

You should read the advice of Alexland carefully and maybe rethink your approach using a more established platform .