Why you should think carefully before investing with your bank

By the Editorial Team · Sunday, November 1, 2026

Many savers prefer managing investments through high street banks, but these banks typically charge higher fees and offer fewer investment options compared to specialist platforms. Investors may find better value and broader choices with specialist providers, which often feature lower costs, advanced tools, and innovative options like fractional shares.

Investors considering managing their savings and investments through their high street bank should carefully evaluate the fees and offerings compared with specialist investment platforms. While nearly half of savers express a preference for using their bank for investments, industry experts highlight that banks often charge higher fees and provide a narrower range of options.

Historically, high street banks have been criticized for relatively costly fee structures and limited investment choices. For example, HSBC’s Global Investment Centre charges £5 per trade along with a £10.50 quarterly maintenance fee for shares and exchange-traded funds (ETFs). Lloyds Bank applies a £9.50 trading fee, which is high compared to some rivals. In contrast, NatWest offers only a limited selection of five ready-made portfolios without individual share dealing, making it potentially suitable for beginners seeking a simple approach but less appealing for experienced investors wanting more control.

Two high street options stand out for their investment services: Barclays Direct Investing and Scottish Widows Share Dealing. Barclays eliminated its 0.25 percent annual account fee in June, making it more competitive. The platform charges no fees for buying or selling funds, but applies a £6 dealing fee on transactions involving shares, ETFs, bonds, and investment trusts. This fee can be avoided by setting up regular investments, with charges applying only upon selling. Barclays offers access to over 8,000 investments and provides five ready-made portfolios with an ongoing 0.45 percent annual charge. The absence of a self-invested personal pension (SIPP) offering may limit options for those seeking pension products. Barclays is well suited for investors focusing on funds or ready-made portfolios, especially those who plan to establish free regular investments.

Scottish Widows, part of Lloyds Bank, has a different fee structure. It does not charge annual fees for stocks and shares ISAs or general investment accounts, but applies a 0.25 percent yearly charge for SIPPs, capped at £16.50 per month. The dealing fee for shares and funds stands at £5 per trade, slightly lower than Barclays’ fee for shares but higher than many specialist platforms, which often charge less for funds or offer them free. Scottish Widows permits free regular investments, which can help investors avoid some dealing fees. Dividend reinvestment comes with a 2 percent charge, capped at £5. The platform also provides ready-made portfolios with a standard £3 monthly fee. The service may appeal to those who want to trade shares and ETFs sporadically due to its relatively modest ad-hoc trading fees.

Specialist investment platforms often attract investors by offering lower fees, more tools, and wider investment choices. Platforms like Hargreaves Lansdown and Interactive Investor provide research teams and advanced analytical tools. Newer entrants such as Trading 212 and Freetrade emphasize user-friendly mobile apps and fee-free investing, including options for fractional shares, which allow investors to purchase portions of expensive stocks—a feature generally unavailable from legacy providers.

While banks now commonly offer stocks and shares ISAs through mobile apps, simplifying account management, industry experts suggest that investors benefit most by selecting platforms based on fees, customer service, and platform features rather than relying solely on existing banking relationships. Opening an investment account is typically straightforward, regardless of provider, enabling investors to seek the best fit for their individual needs.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.