How to buy Royal Bank of Scotland shares (RBS)

By:

James Knight

James is a lead editor for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets. His ... read more.

Updated: Jul 6, 2023

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This guide explains the history of the Royal Bank of Scotland and its recent rebranding to NatWest Group. You can find a history of how RBS stock performed, and how to invest in NatWest, the company’s new form.

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If you are looking for the best place to buy RBS stock online, we can help. Simply visit one of our trusted brokers below. If you’re not ready to invest yet, keep reading for more information on RBS and how to stay up to date with the latest developments.

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How to buy RBS stock, a step-by-step guide

Investing in RBS is a simple process, even for the most inexperienced investor. Just remember that the company is now known as NatWest Group and can be found under the ticker NWG. The following list explains the steps you need to take to complete your investment.

1. Choose a broker. In order to invest, you need to use an online brokerage platform. There are many different options to choose from, each with its 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.
2. 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.
3. 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 NatWest shares.
4. Place an order for NWG stock. Now navigate to the stock section of your chosen brokerage platform. Here, you can search for NatWest’s ticker symbol (NWG) and see the current price at which the stock is trading. If you’re happy with the price, enter the number of shares you wish to purchase and place your order.
5. Execute your order. Once you have placed your order, your broker will automatically execute it for you and your shares will be listed in your account. Congratulations, you’ve just bought shares in NatWest!

What is RBS? And should I invest?

Royal Bank of Scotland was a financial institution that’s now known as NatWest Group (LON: NWG). You can use our guide on how to buy NatWest shares to learn whether the newly-named bank is a good investment. When you search for shares in the company now you should look for the ticker NWG.

RBS traces its history all the way back to the 1720s, but its development into a major British financial institution came during the 20th century. In even more recent times it either owned or was a major shareholder in banks across the world, notably in the US, and the Bank of China.

After its near-collapse in 2008, the UK government bailed out the Royal Bank of Scotland. It retains a 58% stake in the company, which it wants to exit by 2025. The government bailout is one of the biggest reasons why RBS chose to rebrand to NatWest, as it felt its former name was stained by the 2008 financial crisis.

How has the company performed in recent years?

In the immediate aftermath of the coronavirus pandemic, RBS stock traded just above 110p, a fraction of its peak and below even its 2009 lows. That perhaps doesn’t tell the whole story, as RBS had actually improved its fundamentals before the pandemic hit and was even intending to pay a special dividend to shareholders.

Along with lingering bad news stories, RBS’s core profitability was hurt by a long spell of low base interest rates. Base interest rates have been below 1% for more than a decade, cutting margins in the banking sector finer than ever. Such a stark reduction in loan profitability has affected banks across the world, not just RBS, for a long time.

Despite those pressures, RBS had significantly strengthened its balance sheet to its healthiest position in two decades. Going into 2020, RBS’s value had shown signs of a recovery from the worst of its troubles, up nearly 50% from four years earlier. The pandemic created huge uncertainty in the financial sector and all those gains were wiped out. After rebranding to NatWest Group in the middle of 2020, the share price began to recover to about half of its pre-pandemic value.

Is it a good time to buy RBS shares now?

Remember, if you want to buy RBS shares you need to research NatWest Group and search for the stock symbol NWG.

Until the pandemic has cleared up and it’s no longer weighed down by government ownership, buying NatWest stock is going to come with risk. Although it has a much-improved balance sheet compared to the dark days of the financial crisis, it’s likely to use any surpluses to buy the government out of its stake before it can use them to raise the shareholders’ dividend.

The wider economic situation presents another challenge. A UK-EU deal on Brexit has cleared up one area of uncertainty, but the question of how banks can weather the pandemic remains to be seen. NatWest is the UK bank most exposed to small business loans, making it more susceptible to the coronavirus than its competitors. Continued lockdowns and reduced movement will hurt those businesses more than most.

Long-term investors ultimately will want to see signs of higher interest rates on the horizon. In the more immediate future, you should look for signs of NatWest buying the government stake that weighs on its share price. You can get NatWest stock information, follow all the latest news and read our up to date market analysis below.

Buying, selling and trading 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 RBS shares.

1. Research the company. You should always examine the fundamentals of a company before investing. What is RBS? How did the company get its start? How did it grow? Is RBS’s revenue and profit growth picking up? Is the company innovating? The more you know about RBS, the better positioned you’ll be to make smart investment decisions.
2. Make sure you understand the basics of stock investing. Before getting involved in stock investing, 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.
3. 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.
4. 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.
5. 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.
6. 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. The Invezz 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 RBS shares. Here’s a quick run-through of what’s involved in each.

Buying RBS

This process involves finding a broker and placing an order for NatWest stock (remember: not RBS!), 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 RBS

When you sell any RBS 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 onto your stock for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that RBS’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 RBS

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 RBS shares outright or use 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.

Share dealing vs 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 who prioritise the long-term tending to go for share dealing, and those looking for short term gains enforcing a more aggressive trading strategy.

Here’s a quick summary of the two approaches, and the pros and cons of each.

Share dealing 

Share dealing refers to the practice of holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from quarterly dividend payments or an increase in the stock’s price over time.

When investing your money this way, it is important to do a 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.

Pros

• 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 recurring dividends

Cons

• Takes a long time to realise any profits
• Your capital is tied up in stocks and cannot be used for other investments

CFD Trading 

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 trade 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 NWG 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.

Pros

• 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

Cons

• 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 the Invezz stock trading course and read the Invezz 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 NWG stock on this page. If, however, you’re ready to get started now, simply select one of the brokers in the table above.

How to choose a broker

It can be hard to figure out which is the best service to use when there are so many brokers available. 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 choosing who to go with:

• Range of stocks available. The most important thing is that you can actually use the broker to purchase 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 purchase 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 invest using a specific payment method, such as PayPal. Not all brokers accept every payment method, but by using our comparisons, you can search for 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.