Based in the UK and wish to start investing online, but not too sure where to start? You’re not alone, as there are literally tens of thousands of financial instruments available in the online brokerage space, which can make choosing the right investment for you a little tricky. In this article, we explore the best UK investments of 2020, alongside the best online brokers. We also give you a super-simple step-by-step guide on how you can get started with an investment today. eToro: Best Investment Platform in the UK Our rating Invest in Crypto, FX, Commodities, Stocks and ETFs FCA Regulated Platform Social and copy trading ideal for beginners Visit Site 75% of retail investors lose capital when trading CFDs with this provider. How do Online Investments Work in the UK? The easiest way to invest in the UK is to use a Financial Conduct Authority (FCA) regulated broker. You simply need to find a platform that meets your needs, open an account, and then deposit funds. You typically need to deposit at least £100 to get started, and supported payment methods include debit and credit cards, e-wallets such as PayPal, and bank transfer, among others. Once you have funded your broker account, you will then have access to thousands of financial instruments. For example, let’s say that you wish to buy UK-listed stocks like BT, British American, or Barclays. All you need to do is decide how much you wish to invest, confirm the order, and that’s it – you own the stocks in question. Crucially, there is no longer a requirement to meet minimum lot sizes when investing online in the UK. In a time not so long ago, you would be required to buy at least 100 stocks for the broker to take your order on. Instead, you can now buy ‘partial assets’, meaning you can invest as little as you like. With that being said, the online investment space isn’t reserved just for stocks and shares. On the contrary, you can buy, sell, and trade heaps of other asset classes. This includes the likes of indices, ETFs, mutual funds, commodities, bonds, and cryptocurrencies. Additionally, FCA regulated brokers also allow UK residents to place more sophisticated trades. This includes the ability to apply leverage, which allows you to open larger trade positions with capital borrowed from a broker. You can also short-sell assets and bet that a stock will drop in price. Types of UK Investments It is important to differentiate between ‘asset classes’ and the ‘investment type’. For example, let’s say that you wanted to invest in stocks. Not only can you buy equities in the traditional sense through online stockbrokers, but you can also trade via CFDs (contracts-for-differences), ETFs, indexes, and mutual funds. Let’s take a look at the many investment types available at UK brokers. Traditional Ownership If you are simply looking to buy shares or bonds and hold on to your investment for a number of years, you are best off going the traditional route. In other words, you are investing money in the underlying asset, meaning you will be entitled to dividends and/or coupon payments. Moreover, if a stock split occurs, you will receive additional shares. CFDs CFDs allow you to invest in an asset class without owning the underlying instrument. In terms of the positives, this means that you will benefit from lower trading fees, and you will also be able to apply leverage and short sell. On the flip side, as you don’t own the underlying asset, so you won’t be entitled to dividends or bond coupon payments. Forex Foreign exchange, forex, or simply ‘FX’ – is the process of buying and selling currencies. The overarching objective is to speculate which way a particular currency exchange rate is likely to move in the markets. For example, let’s say that you were trading GBP/USD at 1.24. If you think the exchange rate will increase, you place a ‘buy’ order. If you think the opposite, you place a ‘sell’ order. Spread Betting Often overlooked by newbie traders, spread betting is an interesting investment angle to consider. Much like CFDs, you can speculate on virtually any asset class of your choosing. Similarly, you can short-sell and apply leverage. However, the overarching benefit of spread betting in the UK is that your profits will not be subject to capital gains tax. HMRC views the investment channel as gambling, meaning all gains are tax-free. ETFs Exchange-traded funds (ETFs) allow you to invest in a group of assets via a single trade. They are hugely popular with UK investors, as they provide exposure to a range of asset classes. This includes everything from stocks, indexes, gold, oil, gas, real estate, and legal marijuana. Not only are ETFs cheap to trade, but if the provider is tracking income-generating assets like stocks and bonds, you will still be entitled to dividends and coupon payments. Mutual Investment Funds If you’re super-keen to start investing money into the financial markets but you have no idea where to start, it might be worth opting for a mutual fund. This is where you invest money with an investment funds provider, which in turn, will buy and sell assets on your behalf. As your money is pooled with thousands of other investors, the mutual fund will have an incredible amount of purchasing power. You’ll pay a small fee when investing with a fund, but this rarely exceeds 1% annually. Best UK Investment Brokers of 2020 So now that you know the different investment types available in the trading space, you now need to start thinking about which online broker you wish to use. There are hundreds of platforms active in the UK investment arena, so choosing the best investment broker for you isn’t always easy. With this in mind, we have narrowed our recommended list of UK brokers down to just three. Each of the brokers listed below are regulated by the FCA, offer thousands of financial instruments, and allow you to quickly deposit funds with a UK debit or credit card. 1. eToro - Best overall UK investment broker Launched in 2006, eToro is an online broker that now boasts a global customer base of 12 million traders. The platform is regulated by the FCA, as well as licensing bodies in Cyprus and Australia, so it's a safe and reliable platform eToro offers thousands of investment markets, including traditional stocks, cryptocurrencies, and ETFs - all of which you can trade commission-free. You will also have access to heaps of CFDs, so you'll have the options of applying leverage and short-selling. This includes assets like gold, silver, oil, gold, and indexes. In terms of getting started, it takes just minutes to open an account and upload a copy of your passport or driver's license. You will then be asked to deposit a minimum of $200 (£160), and supported payment methods include a debit and credit cards, PayPal and bank transfer. There are no fees to get money into your account. Withdrawals cost just $5, and you'll need to meet a $30 minimum cash out threshold. Once you are all set up, it's worth checking out the eToro CopyTrader feature. In a nutshell, this allows you to copy the portfolio and/or trades of other users of the site. You get to research the credentials of each user before copying them, such as their historical trading results, risk level, and average trade size. Crucially, the Copy Trading feature not only makes it easier to build up your investment knowledge, but it won't cost you anything in fees. It is also important to note that eToro has been catered to the newbie trader, so the actual process of buying and selling assets can be done with ease. Finally, eToro also offers one of the best UK investment apps on the market. This allows you to buy, sell, and trade financial instruments at the click of a button, which is great for closing a position when you are on the road. Assets: Cryptocurrencies, Stocks, CFD, Forex, ETFs, Commodities Demo Account: Yes Educational Material: Great educational material for both beginners and advanced traders Fees: $5 Withdrawal Fee, $5 Inactivity Fee, No Account Fee, No Deposit Fee Minimum deposit: $200 (£160) MT4/MT5: No Special Features: Copy trading and social trading site Regulation: CySEC, FCA, ASIC, MiFID Payment methods: Credit/debit card, Paypal, Sofort, Rapid transfer, Skrill, Wire transfer, Neteller, WebMoney, UnionPay Our rating Social trading leader Best mobile trading site Paypal accepted Limited technical analysis tools Not well-suited for the more advanced investor Visit eToro 75% of retail investors lose money when trading CFDs with this provider 2. Plus500 - Trade thousands of CFD assets commission-free Plus500 is ideal if you are looking to buy and sell assets on a short-term basis, not least because the platform hosts thousands of CFD products. This covers virtually every asset class imaginable. Whether you want to gain exposure to stocks, indices, cryptocurrencies, ETFs, interest rates, or commodities, Plus 500 has you covered. With that said, as a specialist CFD broker, you won't be investing money in the underlying asset. This means that stock and bond trades will not yield any dividends or coupon payments. On the flip side, Plus500 offers leverage of up to 30:1 for UK retail traders, as well as the ability to go short. You can open an account and invest from just £100 and there's also a mobile investment app you can download. Plus500 doesn't charge trading commissions on any of the thousands of financial instruments it hosts, and the spreads are competitive. Regulation-wise, Plus500 is licensed by the FCA, CySEC, ASIC, and MAS. Its parent company is listed on the London Stock Exchange, so the broker's regulatory standing is top-notch. Assets: CFDs Demo Account: Yes Educational Material: No Fees: £10 Inactivity Fee, 0 withdrawal fees Minimum deposit: £100 MT4/MT5: No Special Features: 2,000 trading instruments Regulation: CySEC, FCA, ASIC, MAS Payment methods: Credit/debit card, Paypal, Bank transfer our rating Minimum deposit of £100 Over 2,000 trading instruments Mobile app available No education material Not suitable for beginners Visit Plus500 75% of retail investors lose money when trading CFDs with this provider. 3. IG - Trusted UK broker with share dealing, CFD, and spread betting services If you're looking for an all-round UK broker that covers all investment bases, it might be worth considering the merits of IG. The FCA regulated platform was launched way back in 1974, so naturally it has an excellent reputation in the UK space. In terms you what you can invest in, the broker offers traditional share dealing services for those of you that want to buy dividend-paying stocks. You will also have access to a fully-fledged spread betting facility, which allows you to make gains without paying any tax. Alternatively, IG also lists thousands of CFD products, so you'll also be able to access markets like oil, gas, gold, and real estate. When it comes to fees, IG is very competitive. This includes commission-free CFD trades (apart from stock CFDs), and industry-leading spreads. Over in the share dealing department, prices start from just £3 per trade. If you do like the sound of IG, you will be required t0 invest a minimum of £250. E-wallets aren't supported, so it's just UK debit/credit cards and bank transfer. This broker does charge a rather expensive 1% to deposit funds with Visa, and 0.5% with MasterCard. Assets: CFDs Demo Account: Yes Educational Material: First-grade research department, fundamental news, technical analysis brokerage analysis Fees: 0.6 pips on EUR/USD and AUD/USD, no commissions on FX trading, deposit fee of 1% (Visa) and 0.5% (MasterCard) Minimum deposit: £250 MT4/MT5: MT4 Special Features: Minute-by-minute analysis, technical research, spread betting Regulation: MAS, FCA, BaFin, ASIC Payment methods: Credit/debit card, Bank wire Our rating Spreads from just 0.6 pips Overseen by top-tier regulators Instant account activation for Singapore citizens 1% deposit fee on Visa cards MT5 not supported MT5 not supported Visit IG How to Trade UK Investments Online – Step-By-Step Tutorial So now that you know the best three UK brokers currently in the market, we are now going to show you how you can get started with your first trade. We have decided to show you to the process with our top-rated UK investments site, eToro, although the steps are essentially the same regardless of which FCA broker you use. Step 1: Open an Account You will first need to visit the eToro homepage and click on the ‘Open Account’ button. As is the case with all UK brokers, you’ll need to provide some personal information, such as your name, address and contact details. You will also need to answer some questions about your historical investment experience. This is to ensure you have a firm understanding of the risks of investing money. Step 2: KYC Verification As eToro is an FCA regulated broker, it is required to verify your identity. As such, you’ll be asked to upload a copy of your passport or driver’s license. In most cases, eToro will be able to verify the document on the spot. Step 3: Deposit Funds Once you have verified your eToro account you will then be able to deposit some funds. Minimum deposits start at $200, which amounts to about £160. There are no fees to deposit, regardless of which payment method you opt for. Deposit options at eToro include: Debit Card Credit Card Paypal Skrill Neteller UK Bank Transfer All deposit methods are credited instantly, apart from bank transfers. Step 4: Browse Investments Now you have a fully funded eToro account, you are ready to make your first investment. If you know the specific asset that you wish to invest in, search for it. In the example screenshot below, we are looking to invest money in Tesco shares, so we simply enter ‘Tesco’ into the search box. Alternatively, if you don’t know what you want to invest in, click on the ‘Trade Markets’ button on the left-hand side of the screen, and then browse through the different asset classes. At eToro, this includes: Stocks Cryptocurrencies Indices ETFs Commodities Currencies Step 5: Make an Investment Once you’ve chosen the asset you wish to invest in, you will need to place an order. Unless you are looking to place a more sophisticated trade that involves short-selling and applying leverage, placing an order at eToro is very straightforward. In our example, we are simply looking to buy Tesco stocks, so all we need to do is: Buy Order: To buy real stock, specifics ‘Buy’ on the top tab, change the leverage to X1 and set the order. To trade a CFD, set your leverage amount, stop loss and take profit order limits, the set the order. Amount: Enter the total amount that we wish to invest in USD. In our example, we are buying $750 worth of Tesco stock. Market Order: We leave this set to a market order, meaning we will get the next available share price. Finally, we click on ‘buy’ to complete our order. And that’s it, you have just made your very first investment with an online broker without paying a penny in commission! Best UK Investments of 2020 It’s been somewhat of a rollercoaster ride for the UK investment space in 2020, not least because the coronavirus pandemic has wiped trillions of dollars off of the global financial markets. On the flip side, this does mean that a number of asset classes can now be purchased at a significant discount. With this in mind, below you will find our five best UK investments of 2020. 1. Bitcoin – The Future of Money? There can be no getting away from just how successful Bitcoin has been since it was launched in 2009. To things into perspective, a single Bitcoin would have cost you less than a penny during its first few years of existence. Fast forward to late 2017 and the price of Bitcoin fell just shy of $20,000 – or about £16,000 at current exchange rates. Although the digital currency has moved in the opposite direction over the past three years, it is valued at just over $9,000 at the time of writing. Crucially, Bitcoin dived to as low as $4,000 when the coronavirus pandemic crashed the global stock markets in March 2020, though it has nearly doubled in value since. With that being said, some within the industry argue that Bitcoin is still worth just a small fraction of its true potential. If this is the case, you don’t need to invest a lot of money to gain exposure, not least because the potential upside is limitless, making it the best UK investment option right now. If you do like the sound of investing in a cryptocurrency like Bitcoin, the process has never been easier. eToro makes it easy to invest in bitcoin commission-free. You can choose to buy bitcoin as the underlying asset or trade bitcoin CFDs, and eToro even offers a cryptocurrency wallet app so that you have a secure place to store your assets. 2. UK Shares – Consider an Index Like the FTSE 100 Much like every other major stock market, UK shares lost double-digit figures in the space of a few weeks in March 2020. With that being said, some would argue that this presents an excellent buying opportunity and shares are certainly still among the best investments in the UK. Now, if you’re just starting out in the world of investments, you might be somewhat confused as to which shares you should buy. After all, there are thousands of publicly-listed companies in the UK. With this in mind, it might be worth considering a stock market index that tracks the wider UK economy. At the forefront of this is the FTSE 100. This allows you to invest in the 100 largest UK PLCs through a single trade. Not only does this give you exposure to heaps of companies across different sectors and industries, but it is the best way to diversify your investment and thus reduce your risks. If you do like the sound of the FTSE 100 index, the cheapest and most convenient way of doing this is via an ETF. By using our top-rated broker eToro, you won’t pay any commissions – and you’ll still be entitled to dividends. 3. Gold – Traditional Store of Value Against Turbulent Markets If you’re feeling bearish about the global economy, meaning you think we are due for a long and drawn-out recession, then it might be worth turning to gold. After all, gold increased by more than 150% in the years between 2008 and 2011, as investors wanted out of traditional stocks and into stores of value. Now, we are not talking about heading over to your nearest jewellery shop and asking to buy a dozen bars of gold bullion. On the contrary, you now can invest in hard metals like gold, silver, and copper at the click of a button. You do, however, need to consider the underlying make-up of the asset. For example, if you are looking to invest in gold for a number of years, you’ll likely want to avoid CFDs. This is because you will need to pay daily fees – even if you don’t apply leverage or short-sell. As such, the best investment option available to you is to consider an ETF that tracks the gold markets. A prime example of this is the SPDR Gold Shares ETF that you can now trade at eToro without paying commission. The ETF will track the market value of gold without you needing to own or store the asset, which is ideal. 4. ETFs – Exposure to Global Markets via a Single Trade Although this particular investment pick is somewhat broad, it is valid nonetheless. As ETFs allow you to gain access to hundreds of financial instruments at the click of the button, they are among the best investments for diversification. For example, let’s say that you had £1,000 to invest. What you could do is invest in 10 different ETFs at £100 each, across 10 completely different industries. This might include an ETF that tracks real estate, UK stocks, US stocks, gold, oil and gas, legal marijuana, bonds, and foreign currency. In doing so, you will have created one of the most diverse portfolios imaginable. Not only will you be holding thousands of different investments, but you will be doing so across heaps of sectors, industries, economies, and asset classes. Moreover, you will have a great combination of assets that pay regular income (like stocks and bonds), and assets that appreciate (like real estate). 5. eToro CopyTrader Portfolio – Earn Passive Income in a Diversified Manner If you have little to no experience of the world of online UK investments, then it’s likely that you have not come across the copy trading phenomenon. For those unaware, social trading brokers like eToro allow you to mirror the trades of other investors. With more than 12 million traders active at the site, this gives you an unprecedented amount of data to draw from. In other words, you can gain exposure to the most successful investors at the platform by checking their historical trading results. You can break the data down by monthly returns, risk, and preferred asset class. Once you find an investor that you like the look of, you can then copy their portfolio like-for-like. It doesn’t matter how much the investor has placed in their portfolio, as you choose how much you wish to stake (minimum $200 per portfolio). You can also instruct the platform to mirror all future trades on your chosen investor. It is also worth noting that you get the chance to diversify across heaps of different Copy Traders. For example, a $1,000 balance would allow you to copy five different investors, so even if one had a below-par month, you might still end up in the green. Ultimately, this investment is best suited for those of you without any knowledge of trading that wish to earn passive income. Conclusion With the global financial markets taking a huge hit in early 2020 due to the coronavirus pandemic, you now have the opportunity to purchase assets at a major discount. This is especially the case with stocks and shares, with the FTSE 100 losing close to 30% in the space of a few weeks. With that said, if you’re looking to gain exposure to the UK investment space in a risk-averse manner, it might be worth diversifying into a number of different asset types. This might include the likes of bonds, ETFs, crypto, gold, real estate, and stocks. If you are ready to take the online investment plunge, we would suggest opting for our top-rated FCA broker eToro, which not only allows you to get started in minutes with a debit/credit card, but you’ll have access to thousands of assets and the UK’s best investment markets. Ultimately, although it is possible to purchase a number of financial instruments at a discounted price, there is no guarantee that you will make any money. As such, it is important that you do your research have a firm grasp of the underlying risks. If you do want to invest, look no further than eToro, our pick for the UK’s best investment platform for 2020. eToro: Best Investment Platform in the UK Our rating Invest in Crypto, FX, Commodities, Stocks and ETFs FCA Regulated Platform Social and copy trading ideal for beginners Visit Site 75% of retail investors lose capital when trading CFDs with this provider. FAQs Are UK investment platforms safe? UK investment platforms are safe, but you need to ensure your chosen broker is regulated by the FCA, like eToro is. If it isn't, we recommend you avoid it. Can UK investors buy US shares? Yes, by using a platform like eToro, you'll have access to hundreds of US companies across both the NYSE and NASDAW. Can UK investors use leverage? You can, but you will be limited in how much you can apply as a UK retail trader. This starts at just 2:1 on cryptocurrencies, upto a maximum of 30:1 on major currencies. What is the cheapest way to invest in the UK? The cheapest way to access UK investments is to use an online broker that doesn't charge commissions or share dealing fees. Instead, they'll make their money from the spread. What is the best UK investment of 2020? As there is no knowing when the UK economy will recover the financial impact of the coronavirus pandemic, it might be best to diversify across a range of different investments. Think along the lines of stocks, bonds, ETFs, and hard metals.