How to buy shares

What you’ll learn:

• How to buy and sell shares online
• How to invest in funds
• Why holding your investments in an ISA is tax-efficient.

If you want to buy and sell shares, our Smart Investor platform allows you to open an investment account, a stocks and shares ISA or a Self-Invested Personal Pensions (SIPP) to do so.

Here, we consider what you need to know.

Shares explained

A share is simply a slice of the value of a company listed on a stock exchange. The value of those shares can rise and fall in line with demand and the perceived investment value of the company. Shareholders can also receive dividends – a share of the profits handed out during each year – though these are not guaranteed.

Opening an account

These days most people hold shares on a ‘nominee’ basis, which means the investment service you use will hold them digitally on your behalf, although you still own them. This makes the process of investing in shares simpler than when held on a paper share certificate, and you can trade almost instantly.

To open an investment account to hold your investments, you need to provide details such as your name, address and National Insurance number and pass an identity check.

If you have any old-style paper share certificates you can convert these to nominee held shares by lodging them into an investment account.

Selecting shares

If you’re planning on choosing investments yourself, always do plenty of research before buying.

We offer a host of resources to arm you with the information you need, and the tools to help you make your choices. Our Research Centre provides a wealth of data and tools for analysis. If you are interested in what other people have been buying, we publish our most popular shares updated weekly, using the number of purchase and sales deals placed by our Smart Investor customers during the previous week.

Placing a deal

When you place a deal online or over the phone, you’ll give us an ‘Order’ – an instruction to buy (or sell) the share you’ve chosen. When you buy a share, you’ll need to have already funded your online account with enough to pay for your order, covering both the investment you’re buying and the dealing charges. Share prices can fluctuate during the day so the price you get when you buy or sell will depend on the time the order is fulfilled rather than the time you commit to placing the deal.

When it comes to buying shares, during market hours you can usually place your order straight away and know the exact price you’re paying before placing your order – with a ‘Quote & Deal’ instruction. We’ll give you the best quote we can get from the market and you have 15 seconds to accept, or we’ll get you a fresh quote.

If we can’t get you an exact quote at the time, you can give us an instruction to deal at the best price we can get as soon as possible – an ‘At Best’ order – or you can set a limit that you don’t want to pay more than or accept below – a ‘limit order’. You can also place these types of orders outside market hours for us to deal when the market opens.

There are other types of orders you can give if you have very specific orders you’d like to achieve – Discover more about order types. Discover more about order types

Hold shares in an ISA

One of the most tax-efficient ways to invest in shares is through an individual savings account (ISA), which can hold a wide range of other investments, including cash, funds, and gilts and bonds.

Choosing shares can be challenging and is risky, which is why many investors prefer to leave it to the experts and invest in a fund instead.

This enables you to invest in a wide range of shares, bonds and other assets in markets around the world, which are carefully picked and monitored by professional fund managers. Barclays offers a Funds List which is made up of a number of funds from each of the investment sectors we believe are key for building a diversified portfolio.

Find out more about investment ISAs

If you’re in any doubt about where you want to invest, you may want to seek financial advice to help you choose. Remember that the value of investments can fall as well as rise and you may get back less than you invested.

Making your own investment decisions

If you’re interested in making your own decisions about which investments you should buy, Smart Investor might be the one for you.

If you’re not sure where to start or don’t have time to choose your own investments, we will do it for you through Plan & Invest. If you can pay in at least £5,000, our experts will choose and manage your investments for you.