We no longer check to see whether Telegraph. To see our content at its best we recommend upgrading if you wish to continue using IE or using another browser such as Firefox, Safari or Google Chrome. Investors who save into funds or pensions are often advised to check the charges they pay — but a similar warning also applies to anyone who invests directly in shares.

A fund run by a professional stock-picker can carry a seemingly trivial 1pc a year fee that adds up to a huge sum over several decades, because of the compounding effect.

The charges for holding shares yourself are usually calculated differently — but they also eat into the value of your investments over time. Others charge nothing once you have paid the dealing commission. Some charge a percentage for buying and holding shares, others fixed amounts.

Some charge for holdings within an Isa but not outside, some the other way around. A long-running Telegraph campaign against excessive pension charges has highlighted that as much as a third of the money you save can end up disappearing in fees, so fees are an important consideration. The cost of buying US shares in the UK. Are politicians about to start tinkering with Isas? The best and worst shareholder perks. Go beyond the FTSE Are US shares set to fall?

Here we guide you through the different ways to buy shares directly — whether you prefer old-fashioned share certificates or modern "nominee" accounts — and explain how to keep costs to a minimum. Here are the cheapest fund supermarkets.

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Holding shares through certificates rather than electronically can be cheap or expensive, depending on which broker you use and how much you are spending. It also has other advantages and disadvantages unrelated to price. If you buy this way, there is no annual charge from the broker, because it has no continuing relationship with you once the shares have been bought. A broker that holds your shares in a nominee account acts as the custodian of your shares.

By contrast, if you have certificates the custodian is you — so you are responsible for keeping the paper safe. Many brokers do not offer certificated trading but The Share Centre, Halifax, Barclays and Lloyds are among those that do, according to research by Which?. When you hold certificates you automatically appear on the shareholder register, which means you will receive the company's report and accounts and be invited to take part in corporate transactions such as rights issues offers of cut-price shares.

You will also be able to attend company meetings and be eligible for shareholder perks. On the other hand, shareholder registers are public documents and are used by "boiler room" fraudsters to identify potential targets for their high-pressure attempts to sell worthless shares. If you want to avoid endless cold calls, consider using a nominee account — or go ex-directory. The EU wants to ban share certificates.

Its draft "Central Securities Depository Regulation" proposes the "dematerialisation" of share holdings — in other words, ownership of all shares would be recorded only in electronic form. Discussion is continuing about when the change will take effect; one proposal is to make all new share records paperless from and all existing ones by Some brokers charge to hold your shares on your behalf in a nominee account, some don't.

But the cost of holding shares with other brokers can be significant. J P Morgan Asset Management, for example, will charge you 0. Hargreaves Lansdown charges 0.

Some brokers levy monthly or quarterly charges that are waived if you trade a certain number of times. But remember that trading also costs you money. When you hold shares in a nominee account, participation in perks, rights issues, meetings and so on is not automatic, but can often be arranged — details vary from one broker to another.

J P Morgan, for example, will handle rights issues on your behalf by selling the rights and crediting you with the proceeds. As a certificate holder, or with some other brokers, you would have more options. Some brokers, such as Barclays Stockbrokers and Hargreaves Lansdown, have dedicated web pages for these aspects of owning shares. Some will charge fees if you do want to make use of these services. Some also charge for reinvesting dividends.

As well as the cost of holding shares, it's important to consider trading costs, which can vary widely. Some charge extra for telephone trading; others fail to offer this function at all.

Also consider the cost of reinvesting any dividends. Some services will add an additional 1pc fee for this. If you are buying or selling shares in smaller companies, such as those on the Aim market, you may get a better deal by calling a stockbroker that can carry out manual as well as automated trades.

Stocks & shares ISAs: find the cheapest platform - MSE

Killik said the extra cost of trading this way could be more than offset by the better pricing that is sometimes achieved. Alongside fees, check what tools the stockbroker offers for tracking and monitoring share performance and history, and make sure its website offers "live" prices, because some have a minute delay.

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Following George Osborne's announcement of the Budget, The Telegraph looks at the numbers on the UK's economy and financial health.

George Osborne should simply abandon changes that will reduce incentives to save and create yet more uncertainty. A light-hearted quiz about the gaping maw of financial misery that perpetually threatens to devour us all. Accessibility links Skip to article Skip to navigation. Sunday 18 June James Bartholomew The real reason stock markets plunged in January. William Littlewood China in crisis? Another credit crunch in the West is far more likely.

Andrew Oxlade Time to panic? No, follow the investment rulebook. James Anderson This is why I'm worried for investors in the FTSE The cheapest ways to invest in shares Stockbrokers' charges for trading and holding your shares vary widely.

We explain how to trade as cheaply as possible. NOMINEE ACCOUNTS Some brokers charge to hold your shares on your behalf in a nominee account, some don't.

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