When should you invest?

Before you start investing, you need to consider whether investing is right for you, right now. Here are some checks to help you make the decision:

• Make sure you pay off high interest debt before you start investing (e.g. pay-day loans, expensive overdraft). This is important because with expensive credit you are likely to get charged more in interest then you'd make up in returns from investing.

• Only invest money that you don't need in the coming years. Investing carries risk, this means that even if you were to get a good return over 5-10 years, your money could lose value next month. It is important to prepare yourself for when investments lose value, investments WILL go up and down no matter which fund you pick. Withdrawing your money also takes longer than with your savings - about a week - so you can't use it for urgent purchases or emergencies. Make sure you have your emergency fund sorted and keep it separate from your investments so it is easy to access instantly.

So before you put a lot of money in investments, check you have paid off expensive debt and have enough money aside for when the washing machine breaks 😉

What are the costs?

Our mission at Plum is to make our users better off, we don’t want to catch you out with fees so it is important to consider these before deciding to invest.

To make it possible for you to invest in a broad set of shares, through mutual funds, we work with a few companies which charge a fee. We also have a monthly £1 fee charged by us which helps us keep our lights on and the rest of Plum free.

● The Fund. The Fund providers, Vanguard and others (specified on each fund page), have a team working every day to buy and sell stocks aiming to ensure the fund achieves its objectives. They charge an annual fund management fee for this. It is a percentage fee which differs per fund (e.g. Basic funds carry a 0.22% fee). This is reflected in the value of the fund.

● The Product Provider. To make investing possible for you, we are working with a regulated product provider (Gaudi Regulated Services LTD), who ensures safe-keeping of your investments, and the buying and selling of funds. They make sure your ISA is declared with HMRC, and your GIA has all your investments in it. The product provider charges a percentage annual fee of 0.15% charged monthly. This is reflected in the value of the fund in your overview.

● Plum Fee. We charge you £1 per month for access to investing. This helps us with running costs from extra staff to licensing, and building the product you love

If you are not investing enough to outweigh the fees we will send you a message to let you know as well as instructions on how to cash out if you decide investing is not for you. This is part of our commitment to make sure the costs do not outweigh the rewards and Plum is always making you better off.

What’s even better, we will only start charging the Plum fee from October 2018 - we are giving you a few months free to give investing a go - so if you invest now you will get a few months without the £1 Plum Fee.