Lloyds is one of the oldest banking institutions in the UK, and today is one of the country’s ‘Big Four’ banks. Find out if now is the right time to invest in Lloyds Banking Group stock.
This guide details the process you’ll need to go through in order to invest in shares of Lloyds Banking Group PLC. Additionally we run through the factors you need to consider and where to find the best online brokers, so everything you need is here whether you’re a beginner or an experienced investor.
Compare the best platforms to invest in Lloyds Bank shares
For those who are ready to invest in Lloyds Bank right away, simply use the comparison table below to select your ideal broker, then follow the link to head right there and buy your shares. If you want more information before making your investment, then scroll past the table and keep reading below.
How to buy Lloyds Bank shares, a step-by-step guide
The process of buying shares in Lloyds Bank isn’t massively complicated, so don’t worry even if you’re new to stock investing. These are the steps to follow in order to complete your investment:
- Choose a broker. In order to buy Lloyds Bank stock, you will need to use an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Lloyds Bank shares.
- Place an order for LLOY stock. Now navigate to the broker’s buying stocks page (a link to this can be found in the menu on the website). Here you’ll be able to search for Lloyds Bank’s ticker symbol (LLOY) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you wish to buy and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Lloyds Bank shares will be listed in your account. Congratulations, you’ve just bought shares in Lloyds Bank!
What is Lloyds Bank? And should I invest?
Lloyd’s Bank is a UK bank with roots that go all the way back to the 18th century. Over the years, the bank has gone through a series of mergers, which has seen it become one of the four largest banks in the UK – the so-called ‘Big Four.’ Today the company trades as Lloyds Banking Group PLC and is listed on the London Stock Exchange.
In terms of whether you should invest in the bank, the important considerations are its fundamental strengths and its recent stock performance. For the most up-to-date information on Lloyds shares, check out our Lloyds Bank quote page. This includes a variety of charts, recent statistics, and key information for when deciding whether to invest in Lloyds Bank PLC shares.
How has Lloyds Bank performed as an investment in recent years?
Lloyds shares have not performed overly well over the past decade, as the bank has struggled to recover from the huge hit it took during the 2007-08 financial crash. This period saw the bank’s share price fall from £4 to just over 30p – a drop of nearly 90%. The years post-2008 saw the stock recover somewhat, with Lloyds Bank shares closing at 56.55p on 20th February 2020. However, the economic damage of the coronavirus pandemic saw the bank’s share price fall to just 27.73p by 3rd April.
Lloyds Banking Group PLC showed a degree of recovery towards the end of 2020, with shares rising in value by over 30%, but there still seems to be some uncertainty about its future price movements.
Is it a good time to buy LLOY shares now?
This depends on your outlook on the economy more generally. Shares in large banking institutions tend to perform well when an economy is growing – as increased levels of spending and borrowing push bank share prices up. On the other hand, banks such as Lloyds suffer badly during recessions.
One way to look at it is that Lloyds’ share price is significantly lower than it was at the start of 2020, and so it could be a good time to invest in the company before its share price rises. Another possibility, though, is that the UK post-COVID recovery won’t be strong enough to drive large growth in major stocks such as Lloyds Banking Group PLC.
A good strategy to take is to examine the bank’s price-to-earnings ratio, which can help reveal if there is some value the market hasn’t yet recognised. And the other thing it is essential to do is to keep up on all the latest news and analysis affecting Lloyds bank and the banking sector more generally. You can find our most recent analysis pieces about Lloyds Banking Group PLC just below.
Buying, selling and trading Lloyds Bank shares for beginners
What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before investing in Lloyds Bank shares.
- Research the company. You should always examine the fundamentals of a company before buying its stock. What is Lloyds Bank? How did the company get its start? How did it grow? Is Lloyds Bank’s revenue and profit growth picking up? Is the company innovating? The more you know about Lloyds Bank, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Lloyds Bank shares. Here’s a quick run-through of what’s involved in each.
Buying Lloyds Bank shares
This process involves finding a broker and placing an order to buy Lloyds Bank stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
Selling Lloyds Bank shares
When you sell any Lloyds Bank shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Lloyds Bank’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading Lloyds Bank shares
Trading is the same process as buying and selling shares, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade Lloyds Bank shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Ways to buy Lloyds Bank shares: share dealing and CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into LLOY shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed.
If neither of these options appeal to you, then you can find a variety of other ways to invest in LLOY stock on this page. If, however, you’re ready to buy Lloyds Bank shares now, simply select one of the brokers in the table above and get started.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually use the broker to buy the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place trades and buy shares. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to buy Lloyds Bank shares using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.