The combination of low fees, slick design and insightful analysis make Lightyear a winner.
Since it burst onto the investment scene in 2020, Lightyear has won tonnes of fans – and with good reason. The app is one of the nicest to use we have tested. The way it lays out a detailed analysis of each stock in a user-friendly manner was a particular plus point for us. Now it has reached 3,500 stocks and ETFs (and counting) we think it will be comprehensive enough for most retail investors. The fees are also rather low when compared to the older giants of the industry. However, there is a slight niggle here. The introduction of a fee for placing trades, though still low, might put some off – but the fantastic 4.5% interest on cash balances in USD and GBP might go some way to offset this (Note: this rate is variable, but is true as of January 2024). It’s definitely an app you have to try – we fell a little bit in love.
😍 Beautiful user experience makes it a joy to use.
💵 Very low fees, including no fees for investing in ETFs (other fees may apply).
🧩 Can trade US fractional shares.
👩🔬 Great analysis of stocks.
💵 Intro of a one pound/euro fee for trading stocks in those currencies might be prohibitive if you do frequent low-volume trades in those markets.
👴 Doesn’t offer ISAs, LISAs or SIPPs.
📈 Lacks the advanced features that some advanced day traders might require (but more than enough for everyone else).
[.custom-color]A low-cost, modern app-based investment platform.[.custom-color]
Lightyear is an app-first investment platform that launched in 2020. Despite being new, its sleek and modern design, low costs and rapidly expanding feature set have gained it a lot of attention.
It has a great heritage too, being founded by Martin Sokk and Mihkel Aamer, who both came over from Wise from the respective positions of Head of Product and Head of Engineering. For those who haven’t come across it, Wise (formerly known as TransferWise) is a fintech company that offers international money transfer services with transparent, low-cost fees and real exchange rates.
More recently, Lightyear has raised $25 million in funding from illustrious backers such as Richard Branson and the investment firm Lightspeed.
[.custom-color]It took us less than ten minutes to open an account and start investing.[.custom-color]
We were actually surprised by how easy it was to open the account. You’ll need to give the standard details like your name and address but you will also be asked for your National Insurance number if you’re in the UK, or a similar tax identification number if based internationally.
If you need to verify your identity, you’ll be asked to take a picture of a photo ID (a passport, national identity card or driver’s licence) and then asked to take a selfie to check you are indeed who you say you are. The checks are automatic and approval usually only takes a couple of minutes.
Once approved, we were prompted to add in money (see the screenshot in the middle of the picture above). We went with Google Pay but you can also choose to use Apple Pay, a bank transfer or your debit card.
[.custom-color]We’d like to see a greater range of investment account options.[.custom-color]
Currently, Lightyear only offers one type of account – a general investment account.
There is no ISA available which we found disappointing as this allows people in the UK to invest up to £20,000 a year tax-free. However, Lightyear has commented that this is “definitely on our roadmap”.
There are also no Lifetime ISAs no and SIPPS (Self-Invested Pension Plans).
[.custom-color]An average selection of stocks and funds.[.custom-color]
Lightyear offers 3000+ individual stocks. These are focussed on the US but you can also buy UK and EU stocks.
When it first launched it only had 1,000 stocks and these were restricted solely to the US. This gives you some idea of how rapidly the platform is expanding.
Fractional shares are a handy feature in the world of investing. They allow you to own a part of a stock, even if you don’t have enough money to buy a full share.
Here’s how it works: Imagine you want to invest in a high-priced stock like Amazon, which can cost hundreds of dollars for a single share. With fractional shares, you can invest as much or as little as you want, and you’ll own a piece of that Amazon stock proportionate to the money you put in.
So, if you have $100 to spare, you can use it to buy a fraction of an Amazon share, and you’ll still benefit from its price movements (either up or down). You also keep any dividends and gain any voting rights in proportion to the money you put in.
We find this makes investing much more accessible as it means expensive stocks, like Berkshire Hathaway, are no longer just the preserve of the rich.
Do note that fractional shares are currently only available on US stocks through Lightyear.
Lightyear also started offering ETFs or “Exchange Traded Funds”. These are investment packages that contain a bunch of different assets, such as stocks, bonds, or even commodities. They’re designed to make investing easier and more diversified.
One cool thing about ETFs is that they can be themed. Imagine you’re interested in a specific sector, like technology or renewable energy. There’s a good chance there’s an ETF that focuses on just that. These themed ETFs group together companies related to that theme, so you can invest in the whole sector without picking individual stocks. There are also ETFs that follow entire markets, such as the Vanguard S&P 500 (actually the most popular ETF on Lightyear at the time we tested) which just invests in the 500 biggest listed companies in the US.
The main benefit of ETFs is that they spread your risk. Since they hold many different assets, a bad performance by one company won’t sink your entire investment. Plus, they’re usually managed by professionals who keep an eye on things, making it a bit like having an experienced guide along for your investment journey.
How does Lightyear’s range of stocks and ETFs compare to other providers out there? Here’s a quick breakdown of what some other popular providers offer:
So Lightyear is catching up with competitors, but if you’re currently looking to invest in semi-niche areas then you might have to look elsewhere. For example, we looked for the UK property company “On The Market” but were not able to find it listed.
[.custom-color]Fees are cheap…but not as cheap as they used to be.[.custom-color]
Lightyear is really transparent with its fees. Currently, you are only charged a small fee when buying shares and a relatively low currency conversion fee when you buy stocks that are not listed in your base currency (e.g. if you are based in the US and you want to buy a stock that is listed in Euros). Here’s how it breaks down against competitors.
On top of there being no platform fee, you also don’t pay for deposits and withdrawals nor do you pay any Lighytyear execution fees when investing in ETFs (other fees might apply).
This makes Lightyear a very cheap trading option indeed. This is especially true if you compare it against larger, more established brokers such as ii and Hargreaves Lansdown.
However, many users are unhappy about the fees because Lightyear was originally even cheaper still. When it first launched FX fees only applied to transactions over $3,500 and they didn’t charge the 1$/£/€ for trading stocks. Indeed, if you are buying a UK stock for £10 then the £1 transaction fee can seem disproportionate. However, a $10 US transaction would only incur a 10-cent trading fee. You therefore have to look at the sort of trading you will be doing to decide how much of a burden these fees will be.
Overall, we think Lightyear represents one of the cheapest trading options on the market right now and while the fees have changed they have also introduced a cool new feature that lets you earn some high interest on cash balances.
Interest Payments
High interest on cash balances is a lovely bonus.
Lightyear has recently introduced some pretty high rates of interest on any uninvested cash you have sitting in your account. You can earn this on euros, British pounds and US dollars. The calculation for each currency is as follows:
Central bank interest rate – 0.75% = Interest passed to you.
At the time of writing, this comes to 4.5% APR for pounds and dollars and 3% APR for euros. This is then calculated daily and paid monthly.
Even the top easy-access savings accounts are currently only paying just over 5% so we think this is a pretty significant feature.
Woah. This is where Lightyear really surpasses the competition. Great research that doesn’t feel too overwhelming and a sleek UI make this our favourite investing app hands down. Let’s walk you through the features.
Note: Lightyear has launched a beta Web version of their product, which can be used as an alternative to the app.
When you log in you have three screens to choose from:
The Explore page has various features:
The main feature here is a graph that displays your current portfolio value. You can also tap to see a breakdown of your investments, including the sectors and countries they are in, plus any cash you hold and the interest you are earning on it. We really liked the beautiful way this info was displayed.
Here you can see the balances of your GBP, EUR and USD wallets plus convert money. We also liked that you can see a feed of all your activity on the app.
When you dive into any individual company you get a lot of financial information, but it is presented in such a clean way that it doesn’t feel too overwhelming.
You get the following for most stocks:
Note as well how the page has a blue or red background depending on the way the price is trending. It’s little details like that which make this app such a joy to use.
Each individual stock page has a big blue “Buy” button (see the screenshots above). Once you tap it, you have the option to buy a cash amount of the stock (e.g. give me $50 worth) or to buy a number of shares. You then have three ways to execute the trade.
When selling you can also place a market order to sell immediately or a limit order to sell when the stock reaches a certain price.
One slight annoyance is that we could not find a way to implement a stop-loss order – i.e. to instruct Lightyear to sell your shares if the price hits a minimum.
Both depositing and withdrawing money were easy and quick.
They don’t really offer any education on how to start trading. You will need to read up on this elsewhere and then just use their app for analysis and actual buying and selling.
[.custom-color]Their help section is really good – but, as is common with many of the newer investing start-ups, you can’t speak to anyone on the phone. [.custom-color]
There is however email support. They state that
“(O)ur team works Monday to Friday during normal business hours and we generally respond within 1 business day of receiving your request.”
We decided to test this out. We emailed Lightyear at 4.41 p.m. requesting to change the email address on our account. They emailed back at 9.07 a.m. the next day to say this had been done. We were impressed by the speedy turnaround and the friendly tone of the representative (Dan) who helped us.
[.custom-color]Lightyear is very good for beginners. [.custom-color]
Yes, it lacks educational resources but there are plenty of places to get these online. However, its ongoing analysis of the market and individual companies is comprehensive and detailed but somehow doesn’t feel too confusing for a newbie. If you’re starting out we reckon this is a great option.
Trading 212 wins in a few ways. It has lower fees, it has more advanced features for advanced traders and its desktop experience isn’t an afterthought. Its education section is better too. In addition, it provides an investment ISA which means you can invest £20,000 a year in the UK and not have to pay any tax on the money you make. Lightyear just has such a brilliant user experience though that we’d say you still have to check it out, especially for analysis (where it comes out on top).
Lightyear itself isn’t registered with the FCA – but it is an AR (Appointed Representative) of RiskSave Technologies Ltd who is. It appears to be a temporary position as they are working to get FCA approval directly. Essentially, Lightyear will still have to adhere to FCA rules but the burden is on RiskSave to ensure this.
For US stocks you are protected by the Securities Investor Protection Corporation up to $500,000 and for EU assets by the Estonian Investor Protection Sectoral Fund up to 20,000 euros. However, for extra security, we would like to see Lightyear become part of the FSCS (Financial Services Compensation Scheme).
Despite this though, Lightyear has to hold any uninvested funds separately from their own funds and your stocks are held with authorised custodians. In the event of bankruptcy, they would remain your shares and Lightyear could not use them to pay off their debts.
Yes, the combination of low fees, slick design and insightful analysis make it a winner.
Disclaimer: Capital at risk. The provider of investment services is Lightyear Financial Ltd for the UK and Lightyear Europe AS for the EU. Terms apply: lightyear.com/terms. Seek qualified advice if necessary.