How to start investing in stocks
Open an equity savings account or a book-entry account
When opening the account, you will choose an investment service package that suits you. You can select between the Saver’s or the Investor’s service package.
Study carefully the listed companies that interest you
You can find information on them from company websites and financial media as well as from company updates provided (in Finnish) by OP Research. You will have access to the online service of OP Research (in Finnish) after you have taken out the Saver’s or Investor’s service package.
Choose in which companies you want to invest and start trading
Remember to diversify your investments in a sufficient number of companies, preferably from different sectors. Ideally, your stock portfolio would include shares of at least five different companies. Also, remember temporal diversification, which means buying at different times.
Start investing by selecting the account type
Why investing in stocks is a good idea
History shows that investing in stocks is an excellent way of making your money grow. It is ideal for you if you seek a high return and tolerate market fluctuations. Return consists of a rise in the share's value and the dividends you get. By investing you can build your wealth, spread your investments and protect yourself against inflation. Publicly listed shares are, in principle, liquid, which means they can be converted into money quickly and easily.
Stocks are ideal for long-term investment due to high expected returns. Short-term fluctuations in value may be large, especially if you plan to re-invest the dividends paid by the companies.
However, many often think that starting stock investment is difficult. It is a common misconception that you need a large capital to start investing. However, there is no minimum amount that you need to invest. The recommended amount ensures that the proportion of transaction costs is not too large. Example:
- For an investment of 100 euros, a trading fee of 1% equals 1 euro. As an owner-customer, your maximum trading fee for Finnish equities via the book-entry account is always 1%.
Stock investment – what you should know
Making good investment decisions can be a challenging task, but often investing in stocks becomes an interesting hobby. Once you have found a suitable company to invest in, it is virtually impossible to make mistakes in buying or selling, so there is no need to be anxious about your first buy or sell order.
- Stock investment always includes the risk of falling share values. Then again, it is also an opportunity for getting very good return on your funds.
- Risk and expected return always go hand in hand: the greater the risk, the greater the return you can expect, whereas a lower risk brings smaller returns.
- A good way of reducing the risk without lowering returns is diversification: spreading the money across several investments. It is also a good idea to diversify investments to different countries and sectors. You can ensure temporal diversification through regular investing.
- This means that you buy when prices are high and when they are low, in other words, you always buy at mid price.
Study the companies thoroughly – our analysts and experts are always there for you
You can find out about interesting companies by following news, reading newspapers and browsing company websites. You can examine a company’s key figures, indicators and culture and consider its future outlook. You can also get support and ideas from OP Research whose analysts and experts produce analyses, stock picks and target prices on almost 80 Finnish listed companies.
Your investment criteria can include the dividend yield, a credible growth plan, growth prospects, an established brand, good products, competent management or the debt-equity ratio. When buying shares, you buy a part of the company, so we recommend that you select companies whose business and values correspond to your own values. It is also important to consider the company’s business performance potential in the future.
Tax treatment of investments
At the end of each year, you will receive an account statement of your shareholdings and the paid dividends for taxation purposes. Capital gains on the sale of shares are taxed as capital income. The tax rate on capital gains is 30% for capital income of up to 30,000 euros per year. For the part exceeding 30,000 euros, the tax rate is 34%. You can deduct acquisition expenses, such as brokerage and service fees, from the selling price of the shares.
Dividends are subject to taxes too. A private person’s dividend income is capital income that is partly subject to tax and partly tax-exempt. From dividends paid to a private person, 85% is taxed as capital income and 15% is exempt from tax.
By investing through an equity savings account, you can postpone taxation, in other words, you will not pay tax on the profit until you withdraw money from the account.
Starting to invest in stocks – select a suitable service package
For investing in stocks, you will need a book-entry account or an equity savings account, securities custody, an eServices Agreement and an account. Your shareholdings will be recorded in the book-entry account as book-entry securities, whereas dividends will be paid into your account. If you have an equity savings account, your shareholdings will be recorded and dividends will be paid into that account.
Our services for stock investors consist of two different packages depending on the investor’s trading activity and needs. Whether you are a saver or an investor, OP offers you stock investment services that match your specific needs. A custody and a book-entry account or an equity savings account are automatically included in the service packages.
If you are already an OP customer, you can open the service package of your choice online by yourself. If you do not yet have an OP user ID, please contact your nearest OP cooperative bank or become our customer online.
If you have investments via another bank, you can transfer your book-entry account to us. Before the transfer, ask your current stock broker the purchase prices of your shares and submit them to your OP cooperative bank to be updated in our system. During the transfer, your trading in securities will be interrupted for around five working days.
If you need assistance with trading or if something else occupies your mind, please contact our experts on OP-mobile or the op.fi service.
What costs are involved in stocks?
If you trade less actively and comprehensive basic services are sufficient for you, we recommend the Saver’s service package, which includes services such as a book-entry account, securities custody and extensive equity research provided (in Finnish) by OP Research. The Saver's service package is free of charge for owner-customers.
Are you a more experienced investor and trade on a weekly basis or so? In that case, we recommend the more extensive Investor’s service package, which you can supplement with real-time market information at an additional fee, if you wish. As an owner-customer, you will get the Investor’s service package at an affordable price.
As our owner-customer, you also get excellent benefits in trading. You will be automatically upgraded to the second fee level, where the trading fee is 0.17% of the transaction price, or a minimum of 7 euros. In addition, your maximum trading fee for Finnish equities via the book-entry account is always 1%. You can get started even with a small amount like, say, 100 euros.
Stock investment services are provided by OP cooperative bank. Please note that investment always involves risks. The value of investments can rise and fall, and an investor can lose part or all of the money they invest.