eToro offers a DIY Stocks & Shares ISA in a partnership with Moneyfarm
eToro is an investment platform and mobile app that lets you buy individual stocks or funds as well as precious metals like gold or silver. eToro doesn’t offer its own ISA, instead it’s got a partnership with investment provider Moneyfarm to let you invest in ready-made or DIY portfolios tax-free.
Here’s everything you need to know about the eToro Stocks & Shares ISA.
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The eToro Stocks and Shares ISA is a free account where you can buy and sell investments using its mobile app or desktop platform.
As with a Stocks & Shares ISA with other investment providers, you can invest up to £20,000 in each tax year (which runs from April 6 to April 5 each year) without paying any tax on your profits, including interest, dividends and capital gains. Your annual £20,000 ISA allowance is split between all the ISAs you have, both with eToro and other providers. So you’ll have to consider any money you deposit into Cash ISAs, Lifetime ISAs or other Stocks and Shares ISAs.
The eToro ISA is flexible — this means that you can withdraw money and replace it in the same tax year without losing that allowance. This isn’t much of a benefit, really, as you ideally want to leave money invested for at least five years to allow the stock market to fluctuate.
You can transfer your existing ISA into eToro from other investment providers. By doing this, you can keep your investments within the ISA “wrapper”, so it won’t count as a new deposit into an ISA. You can transfer in either cash or investments, as long as these are available to invest in with eToro’s ISA — we’ll get onto what you can invest in down below.
It also pays 3.8% interest on uninvested cash held in USD. Any money held in GBP in your account will not earn this interest, and you need to turn on “Interest on Balance” in your settings to get it.
Other eToro products
eToro also has a Cash ISA that’s currently paying a boosted 4.65%.
If you’ve already made use of your ISA allowance this year, or don’t want to invest into an ISA, then eToro also has a General Investment Account (GIA). With this, you’ll get much smaller tax-free allowances. eToro doesn’t offer pensions or Lifetime ISAs.
You can also invest in riskier contracts for difference (CFDs) as well as Cryptocurrencies, but these are for people with really advanced stock market experience – and they aren’t available in the ISA – so we won’t cover them in this review.
What you can invest in with eToro’s ISA
With eToro, you can choose to invest in a ready-made portfolio or go for the DIY option and choose your own investments.
For the ready-made option, you’ll choose between a range of Moneyfarm portfolios to invest in. There are 14 different portfolios to choose between, with seven classic portfolios and seven ESG (ethical) portfolios.
You choose which one to invest in based on how you feel about risk, so Portfolio One is the lowest risk and Portfolio Seven is the highest risk.
These portfolios are already created by Moneyfarm – they’re built from a range of investments, such as shares, bonds, commodities and real estate and routinely adjusted to match the risk profile you chose when signing up.
The DIY option is a bit more full on as you need to stay on top of your portfolio yourself.o That means it’s better for those with some experience investing and enough time to manage their own portfolios. This means keeping an eye on the performance and deciding when is the best time to buy and sell.
You can choose between over 1,000 different types of investments, including UK stocks, global exchange-traded funds (ETFs), bonds, and mutual funds.
Investments available with the eToro ISA vs eToro GIA
This is one of the only Stocks & Shares ISAs that has a significantly reduced selection of investments versus the General Investment Account. Using the eToro GIA, you can invest in global shares, while the eToro ISA only gets you access to Moneyfarm’s full investment range, not eToro’s. As such, you can only invest in UK shares with the ISA.
This doesn’t mean that you can’t make a well diversified portfolio, as you can invest in global exchange-traded funds. These are what most investors are looking for, as they’re made from various investments and pretty good for passive investing.
You also can’t invest in the riskier stuff like crypto and CFDs with the ISA.
eToro fees
eToro’s ISA fees are the same that Moneyfarm charges. We’ve split them below between Managed ISAs and DIY ISAs.
There’s also a custody fee for ISAs of 0.35% per year, capped at £45 a year.
Managed ISA fees
First, it charges a management fee that’s determined by the amount you invest:
| Investment amount | Annual management fee |
| £0 to £50,000 | 0.45% |
| £50,000 to £100,000 | 0.20% |
| £100,000+ | 0.10% |
There are also fund fees that depend on the type of funds you’ve got in your portfolio and transaction costs.
| Fund types | Annual fund fees | Transaction costs |
| Classic | 0.16% | 0.05% |
| ESG | 0.17% | 0.07% |
| Thematic investments | 0.26% | 0.30% |
DIY ISA fees
DIY ISA fees are charged when you make trades.
| Trades on shares, ETFs or mutual funds | £3.95 per trade, regardless of the value of the trade |
| Trades on bonds | £5.95, regardless of the value of the trade |
| Currency conversion | 0.7% |
Is eToro safe?
Both eToro and Moneyfarm are FCA-regulated in the UK.
And with both providers, your funds and investments are ring-fenced, which means they’re kept separate from the provider’s own money and investments.
To open an eToro Stocks and Shares ISA, you need to be 18 or over and have a valid form of ID.
You need to go to the eToro website and choose “Open your ISA now”.
You’ll make an account with eToro, then will be taken to Moneyfarm to open an ISA. You’ll need to enter some personal details and will need your ID and National Insurance Number.
Once you’ve opened the account, you can choose whether you want to invest in a managed portfolio or invest yourself.
Pros and cons of eToro ISA
Pros
- Both managed and DIY investing available
- Has a mobile app
- Can invest in stocks and ETFs
Cons
- Not all investments available with DIY option
- ISA is simply a repackaged version of Moneyfarm’s ISA
eToro reviews
On our sister site, Smart Money People, eToro customers have rated it 3.42 out of 5. Customers generally like it, but some find that it’s overwhelming and confusing.
Is eToro any good?
Zoe’s analysis
Up until it launched its ISA, eToro’s never really been a platform for beginner investors. Now, it has both ISAs and managed portfolios that you can invest in, and the ISA doesn’t let you access all the riskier investments available with the platform, but it does also limit the individual shares available to you.
But, you might be wondering why you should bother investing in an ISA with eToro when you could go directly to Moneyfarm and get exactly the same product? In short, you’d only want to do this if there are other features of eToro that you want, too. For example, if you already use eToro for copytrading, it can be helpful to keep everything in one place.
You can also get additional benefits the more you invest with eToro, and the money invested in your ISA does count towards this – this gets you things like higher rates on uninvested cash, an account manager and reduced fees for things like withdrawals. You can see all the benefits of the account tiers on the eToro website.
