So you finally decide to venture into the world of shares and market movements, but where can you find a platform that is friendly for the beginner investor? Often eager investors give up when they are faced with a trading or investing platform that is difficult to navigate and isn’t intuitive – you feel like you need a manual just to buy a handful of shares.
EasyEquities was my light at the end of the tunnel and when I first stumbled upon the platform (thank you, Twitter), signing up and finding my way was pretty simple. Processing the paperwork was a breeze, the fee structure is easy to understand and the site’s layout was accessible.
The simplicity of their product offering: equity trading and tax-free ETFs, limits the amount of products available to investors which may be beneficial for a newbie who wants to invest in their favourite brand’s shares without getting lost in deep technical strategies. Beginner investors also have the option of opening a demo account and playing with fake money in case they’re feeling jittery about their investing strategy.
The EasyEquities platform is one of the cheapest platforms for investors. There is a low 0.25% brokerage on all transactions, with no minimum amount ‒ so whether you’re making several small purchases or one large purchase, your fees stay the same in terms of the percentage of your investment. Also, there is no monthly administration fee.
One thing that beginner investors will appreciate is the ability to own fractional shares should you not be able to afford the whole share. For instance, if you wanted to buy Naspers shares but don’t have R2,000 at your disposal, you can buy a fraction of the share. EasyEquities then issues you with a CFD (contract for difference) which includes the benefits of share ownership even though you do not own the underlying share completely. This is known as a FSR (fractional share right).
When it comes to tax-free saving, EasyEquities currently offers 47 different tax-free ETFs that investors can choose from. The fee structure is still 0.25% brokerage commission fee and investors are exempt from securities transfer tax, capital gains tax, dividend withholding tax on dividends earned, and tax on interest earned. As with all tax-free savings products, the annual and lifetime contribution restrictions still apply so you have to keep a close eye on your contributions.
For a novice investor who is looking for a cheap, easy-to-navigate and efficient investing platform, EasyEquities comes highly recommended. Parents can also open trading accounts for their children, making it ideal for those who want to start their children off young.
Other online trading platforms
When compared to other trading platforms such as PSG Online or Standard Bank Online Trading, EasyEquities falls short in that it doesn’t offer other types of products such as futures, offshore shares (offered by PSG) and warrants. On cost, however, EasyEquities is a winner. Stockbroking and online trading platforms specifically geared for traders usually carry a monthly fee, or have a minimum trading fee.
For instance, Standard Bank’s monthly account maintenance cost is R70. FNB’s share trader platform is slightly cheaper, at R49 per month, but options are limited to JSE shares and Krugerrands when it comes to product offerings. Standard Bank also offers phone trading (at an extra cost) and customers have to be aware of other costs such as settlement fees, share and portfolio transfers, and withdrawal fees.
PSG’s platform, like Standard and GT247.com offers a diverse product range. Investors can choose to invest in local and offshore shares, single stock and currency futures, and CFDs among others. It’s important to note that these platforms are geared toward the more experienced investor who has an in-depth understanding of technical analysis and can use different trading strategies to maximise profits.
Sanlam’s iTrade platform is also very popular with traders and their costs they are competitively priced. iTrade clients pay a monthly fee of R50 (first month of trading is free). If the brokerage fee exceeds R300, the monthly fee is waived. Their brokerage fee is structured according to the value traded and is important to consider when comparing costs.
If you feel that you are at this level, you can check out these six local trading platforms:
- Standard Bank: https://securities.standardbank.co.za/ost/
- PSG: http://www.psg.co.za/wealth/stockbroking
- Sanlam: http://www.sanlamitrade.co.za
- Absa: http://www.absastockbrokers.co.za
- FNB: https://www.fnb.co.za/share-investing/
- GT247.com: http://www.gt247.com
Buying BEE Shares
For people interested in investing in BEE shares, the online platform Equity Express is a great place to begin. Once you know which BEE shares you’d like to invest in, you can open an account on their website, or contact them via telephone (011 324 5400) or email.