Getting startedBeginner5 min read

This content is for general education. It does not take your personal circumstances into account and is not a personal recommendation or investment advice.

Fees and charges in simple terms

This article explains, in everyday language, the main types of fees and charges you might pay when you invest. It shows how fees are taken, how they can affect returns over time, and where in the app you can find up-to-date details of what you will pay.

For a general, illustrative look at how fees can affect returns over time, try the fee comparison tool on our Product page. Illustrative only—not advice.

3 key takeaways

Any fees and charges you pay are taken from your money, so they reduce the total return you get from investing.

Common costs can include account or platform fees, charges built into some investments, and dealing or transaction charges.

This article explains what fees are and why they matter. It does not compare providers or tell you what fee level is right.

The basics

Any

you pay are taken from your money, so they reduce the total return you get from

Common costs can include account or platform fees, charges built into some investments, and dealing or transaction charges. Not every cost applies to every investment.

are typically taken from your money or from the value of your investments, which reduces your returns compared with paying no fees.

Even fees that look small can add up over time because they are taken repeatedly from your money.

For some investments, you may not pay a

when you buy or sell, but other costs can still apply.

This article explains how fees work. It does not recommend any particular product or fee level for you.

You can find up-to-date details of what you'll pay in our pricing/fees section and on each product page.

Illustrative example

Why small percentages still matter

Imagine two otherwise identical investments that grow at the same rate before fees. One charges an ongoing fee of X% a year and the other charges Y% a year. Over time, the higher-fee option leaves you with less money than the lower-fee option, assuming everything else is the same. That does not mean the cheapest option is always best, but it does show why fees deserve attention.

Common misconceptions

Myth

If something is described as having no fee, there are no costs at all.

Reality

One particular fee might be zero, such as no dealing fee, while other platform, fund or transaction costs still apply.

Myth

Cheapest always means best.

Reality

Lower or higher fees do not guarantee better or worse performance. Fees are important, but they are not the only factor.

Myth

If I do not see a separate fee leaving my account, I am not paying anything.

Reality

Some charges are built into the value or price of an investment rather than shown as a separate debit, so they can still reduce returns over time.

Test your understanding

Are these statements true or false? Tap to reveal the answer.

“If something is described as having no fee, there are no costs at all.”

“Cheapest always means best.”

“If I do not see a separate fee leaving my account, I am not paying anything.”

Sources

Investwizz – Fees FCA – Golden rules of investing FCA Handbook – COBS 4: Communicating with clients