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The upstart investing platform Lightyear* has slashed its foreign exchange fees from 0.35 per cent to 0.1 per cent, making it one of the cheapest ways to invest in overseas stocks and shares.
The new foreign exchange (FX) charge means it’s more cost-effective than big rival Trading 212, which charges 0.15 per cent to convert currency.
The provider’s fee shake up pits its FX pricing directly against Robinhood UK*, which was competing with more established home-grown providers by charging 0.1 per cent to convert GBP into USD.
Lightyear only launched in the UK in 2021, but it now operates in 25 countries and manages $1billion of customer assets.
It offers both stocks and shares Isas and cash Isas, with interest rates on cash tracking the Bank of England base rate at 3.75 per cent.
> Find out more about Lightyear*
It’s important to keep FX fees low if you choose international stocks
How does Lightyear compare – and is it worth a look?
In terms of features, Lightyear* is very similar to Trading 212*. There are no account or dealing fees, you can choose from a large range of stocks and exchange-traded funds (ETFs), and there are AI tools that help you analyse the markets.
It offers the same range of accounts – stocks and shares Isas, cash Isas and general investment accounts – and its interest rate on cash is very competitive.
The new FX fee matches Robinhood*, which recently launched a stocks and shares Isa.
However Robinhood only allows you to invest in US stocks, so its range of investments is much more limited.
While Lightyear’s FX fee is only marginally less than Trading 212’s, if you’re a regular trader of international shares, it could make investing more cost-effective for you.
Ramin Nakisa, co-founder of investment education website PensionCraft, said that Lightyear’s reduced fee is great news for UK investors, because ‘turning up the heat on the market might just push legacy providers to look into, maybe even correct, their outdated, expensive pricing.’
And how about the larger platforms?
Larger platforms such as AJ Bell*, Hargreaves Lansdown* and Interactive Investor* lag on FX fees and they can reach 0.99 per cent.
This usually steps down the more you invest, for example Hargreaves Lansdown’s FX fee reduces from 0.99 per cent to 0.5 per cent for trades above £10,000.
But flat fees can be more straightforward to understand, making it easier to determine which platform is most cost-effective for your purposes.
This highlights the importance of choosing an investment platform that suits your needs as an investor.
The larger platforms aren’t the cheapest, but you might prefer to pay a premium for the backing of well-established names and the customer service and investment research they provide.
We’ve long championed finding the best and cheapest provider for you, so if you regularly trade international stocks and shares, it’s a good idea to consider a platform that allows you to do so cheaply.
You can read more in our regularly updated guides that help you choose the right provider and investing account:
> The best investment platforms
> The best stocks and shares Isas
> The best self-invested personal pensions (Sipps)
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