One of the UK’s largest retail stockbrokers (in competition with Barclays Stockbrokers and Hargreaves Lansdown), TD Waterhouse also provides the white label services for Computershare and a number of building societies as well as operating under its own TD Direct Investing brand. Unsurprisingly, signing up with TD Direct generally gets you lower rates than going via a third party.
From an international investing perspective, the good points include decent coverage of North American, European and some Asian markets and no minimum account size. The main downside is the commission on currency conversions of up to 1.5%, an often-overlooked charge that will eat into your returns if you trade frequently.
This high FX commission means that TD Direct is becoming less competitive compared to the cheapest alternatives. Firms such as Interactive Brokers and Saxo Bank offer equally wide coverage at lower fees (once FX charges are taken into account), while iDealing and AJ Bell Youinvest are likely to be cheaper for investors looking to trade in US and European stocks that settle as CREST Depository Interests (CDIs) only.
However, unlike a number of other UK stockbrokers, TD Direct offers multicurrency facilities allowing you to hold foreign currencies in your account, so clients should aim to minimise the FX cost by making currency conversions as infrequently as possible. In addition, the firm will accept deposits in foreign currency, so you could consider using a low-cost foreign exchange transfer firm to pay in funds rather than exchanging currencies within the account.
TD Waterhouse also has a Luxembourg subsidiary, Internaxx. This is a similar service, but has a different charging structure – including much lower currency charges – and may be worth considering as an alternative for some investors.
|Online trading||Australia, Belgium, Canada, France, Germany - Frankfurt, Hong Kong, Ireland, Italy, Netherlands, Singapore, Spain, UK, USA|
|Telephone trading||Sweden, Switzerland|
|Online details||£12.5 for 1-9 trades in previous three months, £8.95 for 10+ trades in previous three months, £5.95 for 20+ trades in previous three months|
|Telephone details||Online rate plus £40|
|Account fees and inactivity fees||Six-monthly inactivity charge of £20+VAT on accounts under £15,000 (waived if you place at least one trade per six months or have an ISA or SIPP linked to your account, or hold funds valued at £10,000 or more)|
|Custody charges for stocks||None|
|Corporate action charges||None|
|Currency conversion charges||Up to 1.5% margin: Trades up to £24,999.99 1.5%; £25,000-49,999.99 1.25%; £50,000-99,999.99 1%; £100,000-599,999.99 0.5%; £600,000-999,999.99 0.25%|
|Hold cash in foreign currencies||Yes|
|Currencies allowed||AUD, CAD, CHF, EUR, GBP, HKD, SEK, SGD, USD|
|Tax-advantaged accounts||ISA (administration fee of £30+VAT per year for accounts under £5,100), SIPP (administration fee of 0.25%+VAT per half year (min £40, max £100))|
|Other products and services||CFDs, futures, FX, spreadbetting|
|Minimum account size||None|
|Further information||Visit the TD Direct Investing (TD Waterhouse) website|