City Index: A Great Way To Trade CFDs And Forex?

July 14, 2020
Brokers
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City Index is a global trading application that offers a lot of options for trading CFDs and foreign currency. The application operates in 150 countries, offers 9 base currencies and is regulated by 3 regulatory authorities including the UK’s Financial Conduct Authority. The application has some great research tools to guide you and train you to trade profitably. This makes it a great platform to trade CFDs and Forex for beginners, while still being a great choice for more experienced traders.

We analyzed hundreds of data points relevant to the costs, benefits and features of trading with City Index and scored our findings on a 10-point scale across 10 distinct categories.
Fees 2
Signup Process 9
Minimum Deposit 10
Ease of Use 8
Deposit & Withdrawal Options 10
Customer Support 7
Asset Classes 3
Referral Program 0
Demo Account & Educational Resources 10
Safety & Regulation 10
Total 69

As you can see from the table above, City Index scores low on fees, asset classes and customer support. It also gets a 0 on the referral program score, but that’s just because it doesn’t have one. On the other hand, the broker scores very well on all other categories. Keep reading to go in-depth on each score and to see how City Index compares to our top-rated broker.

Introduction To City Index

City Index was established in 1983. They are a global CFD and Forex broker, but they also offer U.K. based traders the possibility to invest in spread betting. It is owned by GAIN Capital, which is listed in New York Stock Exchange (NYSE). It is regulated by the likes of Financial Conduct Authority (FCA), Australian Securities and Investments Commission (ASIC) and Monetary Authority of Singapore (MAS). City Index charges low fees when you trade forex or stock index CFDs and it doesn’t charge withdrawal or deposit fees.

Related: If you are looking for investment advice to grow your wealth check out our review of this financial newsletter that will help you make the best decisions.

Pros and Cons

Let’s have a quick look at some pros and cons for City Index.

Pros

  • Strongly regulated by various regulatory authorities, providing security for users
  • Plenty of research tools that allow you to invest smartly
  • Plenty of options in CFDs and forex
  • Allows Spread Betting
  • Simple and quick account opening process

Cons

  • Customer service via email can be slow at times
  • No referral programs
  • Expensive Fee Structure

Now that you have a sense of the pros and cons list lets dive into each of the dimensions in our scoring system and see if the app fits the bill to be your default trading app.

Here’s a breakdown of our 10 scoring categories, each scored out of 10 for a total of 100 points.

#1 City Index Fees

City Index hasn’t hopped on the bandwagon of zero-commission brokers, CFD Commissions on the UK and European market on the platform will cost you around 0.08%. The commission rates for CFDs in the Asian market are around 0.2%. Similarly, the minimum commission rates are £10, $10 or €10 depending on the market that you are trading in. This may not seem much but it translates to $0.8 per $1,000 for the American market and $2 per $1,000 for the Asian market. This can be significantly higher than what other brokers charge.

Also, consider that there are inactivity fees associated with your account after it has been inactive for a year. Additionally, there are withdrawal fees associated with your account unless you withdraw funds using the banking and clearing system of UK.

Financing Rates On CFDs

There are a few financing rates over CFDs aswell in the case that you hold your position overnight.

CountryFinancing rate on long positionsFinancing on short positions
UKLIBOR + 2.5LIBOR – 2.5
USLIBOR + 2.5LIBOR – 2.5
EULIBOR + 2.5LIBOR – 2.5
AustraliaRBA IOCR + 2.5RBA IOCR – 2.5

 For instance, you have 1,000 CFDs worth 450 pence each at the end of the day and the LIBOR rate is 3%, you would end up paying 5.5% on £4,500 divided by 365 days which amounts to 69 pence per day. However, if you hold a position for some days and depending on the amount that you hold could end up being expensive in particular scenarios.

Because of the high commission fees and constraints such as inactivity fees, this broker scores 2/10 on fees as there are a lot of competitive brokers out there like capital.com that charge no commissions or inactivity fees.

City Index Fees Score: 2/10

#2 Sign Up Process

The sign-up process is pretty easy. You can just go to the website and sign up. It takes just one day to verify your account and you don’t even need a minimum deposit to get started.

Opening an account with City Index is a smiple three step process, as you’ll see in the following subsection:

Steps To Open Your Account

Let’s have a look at the steps you need to take to open your account with City Index

Step 1: Fill In Your Personal Information

You’ll need to start by going to the City Index website and give your personal details and financial information. This step includes details like your name, address and payment information.

Step 2: Document Your Trading Experience

This includes giving a test on your knowledge about trading. Giving the list of your experience and a test on your knowledge will help you and the platform know the level of expertise that you possess to start trading immediately.

Step 3: Verifying Your ID

You need to upload a national ID card, passport or driver’s license to verify your ID. Utility bills and bank statements are also accepted and required as proof of address.

The fact that opening an account is hassle-free and quick gives this broker a 9/10 in our scoring system.

City Index Signup Process Score: 9/10

#3 Minimum Deposit With Your City Index Application

City Index does not requier a minimum deposit for you to open an account. This means that you can instantaneously open an account and check out the platform to see if it is right for you without putting any money down. In the case that you decide that you like the platform, you can deposit and start trading right away. For this reason, the application scores 10/10 because you can start investing and trading with as little as you want, which is particularly great for beginners or traders that don’t have a lot of starting capital.

City Index Minimum Deposit Score: 10/10

#4 Ease Of Use

The web and trading platforms score well in terms of usability. Some of the features are that it is highly customizable and you can compare different assets and remove and change the positions of your tabs.

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There are many research tools that help you trade better and allow you to earn more.

Research Tools In City Index

City Index has interesting research tools that can help you in trading better to maximize your wealth. Research tools are available in most apps however, they can help you in trading better. The research tools offered are similar to the ones offered in other apps. Let’s have a look at some of the research tools that City Index offers.

City Index Trading Ideas

 Trading Ideas advice you on how you should trade to maximise your returns. Trading Ideas are based on algorithms and should only be used in decision making after consulting news and announcements regarding your assets.

Charting Feature In City Index

Charting is a feature in which the application projects the price of your asset in the future. It helps you in understanding potential price of your assets and understanding whether you should trade or not.

News Feed Feature

City Index has a news feed function that can really help you. It can help you in getting information from credible sources such as City Index’s experts to get a proper feel for the kind of trends that are going around in the market. Because after all the market is based a lot on the psychographics of people as well and not just numbers. For instance, a lot of the stocks in the market have become overvalued or undervalued based on positive or negative views regarding a company. Hence, it is always important to keep an eye out for news so that you can factor it into your decision making regarding your assets.

The score for ease of use is 8/10 because the app is consistent with offering features that are in line with other apps in the market but it does not offer extra tools that can help it in distinguishing it from its competitors.

City Index Ease of Use Score: 8/10

#5 Deposit & Withdrawal Options With City Index

There are multiple options for deposit and withdrawal and there are no costs associated with depositing or withdrawal of funds. You can transfer funds into and out of your account via:

  • Bank transfers
  • Credit cards
  • Debit cards
  • PayPal

You can also trade in 9 base currencies namely:

  • EUR
  • GBP
  • USD
  • CHF
  • HUF
  • AUD
  • CHF
  • JPY
  • PLN

The slew of withdrawal and depositing options coupled with no costs help City Index in scoring a solid 10/10.

City Index Deposit & Withdrawal Options Score: 10/10

#6 Customer Support Of City Index

City Index offers three standard support channels. You can get support via telephone, live chat and email:

  • Email replies can take up to 5 to 6 days.
  • Phone Support has good reviews with instant replies.
  • The LiveChat consists of you talking to a chatbot and you have to write specific keywords like “agent” to get support with a real person.

The customer service is available between Sunday and Monday at 5 pm Eastern Standard Time (EST). The long delays in responding to emails and lack of proper connection on the live chat make the total score for customer support 7/10 according to our criteria. The customer support is average, to say the least, based both on our personal experience and our scoring system.

City Index Customer Support Score: 7/10

#7 Asset Classes In City Index

The types of assets offered are very limited in the sense that you can trade CFDs on many assets and forex only. However, within CFDs and forex there are plenty of options like you can trade on. Lets have a look at asset classes and the number of options that you have for them.

Asset ClassNumber of Options
Currency Pairs84
Stock Index CFDs23
Stock CFDs4,500
ETF CFDs57
Commodity CFDs31
Bond CFDs12
Cryptos8

You can see from the table above that there are numerous choices for you if you trade in CFD’s and forex.

City Index also offers the possibility to do Spread Betting to its British clients, which is a very popular financial instrument in the U.K., mostly because its earnings are exempt from capital gains tax.

However, apart from these, there are no other asset classes to trade so the score on this category is 3/10 purely based on the limited asset classes that consumers have.

Related: Read our review on trading ETFs

City Index Asset Classes Score: 3/10

#8 Referral Program Of City Index

While referral programs play an important role in making trading fun because you can use the platform with friends and learn more. However, there is no referral program for City Index and this also reduces the chance that you have to earn more funds. Hence, the score for this is 0 because there is no referral program.

City Index Referral Program Score: 0/10

#9 Demo Account Of City Index

City Index has a great demo account. It offers educational training videos on how to trade and become profitable. Similarly, it offers an opening paper trading balance of £10,000 to get you started. Some other features and training provided by the online platform are.

  • Tutorial Videos on how the platform videos
  • Educational training videos on trading
  • Webinars
  • Educational articles that help you in trading better and earning more.

The demo account offers some great features as elicited above. Not only do the educational resources train you to use the platform but also educate on you on how to trade properly. This helps the app in scoring 10/10 in our scoring guidelines for the demo account.

City Index Demo Account & Educational Resources Score: 10/10

#10 Safety Of Using City Index

City Index is regulated by UK’s regulatory authority, the FCA. Moreover, it is also regulated by Australia’s ASIC and MAS. Similarly, it is listed on NYSE. The fact that it is regulated by the top regulatory authorities and it has been operating since 1983 lend great credibility to the platform. If you are a UK national using the app then you have investor protection for upto £85,000. The fact that the app is heavily regulated gives it a score of 10/10 on our scoring guidelines.

City Index Safety & Regulation Score: 10/10

City Index box
While researching 100+ of the world’s top brokers, we’ve noticed what works and what doesn’t from the customer’s point of view. That’s why our final test for any broker is to compare it to Capital.com, which scores 91/100 points across the 10 categories mentioned in this review.

Comparison With Capital.com

While City Index has a quick sign up procedure coupled with plenty of deposit and withdrawal options and an excellent demo account there are a few dimensions where Capital.com is much better and a more comprehensive alternative than City Index.

Customer Support

Capital.com allows you to have a dedicated account manager who keeps a record of your portfolio. So you do not get lost in a customer support loop because often availing customer service can be a problem because lots of brokers are slow in providing customer service and you have to explain your problem to different representatives to get it sorted. Keeping in mind the low score for customer support for City Index in this attribute i think Capital.com does well in terms of providing timely and useful support for customers.

Ease Of Use & Safety

Capital.com has a cleaner interface than City Index. Similarly, its charting tools and newsfeed features are much more comprehensive than City Index.

Capital.com offers negative balance protection, meaning that you cannot lose more money in trades than what you have deposited. Very few CFD applications have this feature and the fact that Capital.com has this along with regulation from regulators like FCA, Capital.com is safer than City Index.

Asset Classes

However, one of the most attractive features of Capital.com in comparison to City Index is the breadth of assets that you can trade in such as ETFs, stocks, crypto, commodities and bonds. As you would know that most successful trading strategies consist of making a diversified and holistic portfolio and the fact that Capital.com offers so many assets gives you the chance to build diversified portfolios. Hence, I recommend Capital.com as a more holistic trading platform.

Related: Read this in-depth review of Capital.com to find out more.

Conclusion

City Index provides a lot of base currencies to trade in which gives a lot of usability to the users to choose the currency that they feel like trading in. Similarly, it is heavily regulated which lends good credibility to the platform. The application is easy to get started with and has some good resources so you can definitely create an account and try it out to see how it fits your needs. If you’re a trader based in the U.K. and are looking for a good broker that will let you try spread betting as a financial instrument, you should definitely give City Index a shot.

On the other hand, Capital.com also has an amazing and intuitive interface that not only makes trading easy but enjoyable. Moreover, it has very narrow spreads compared to City Index while not even charging commissions on trades, which makes trading a lot more profitable.

Capital.com also has a wider asset breadth to provide you with more trading options such as stocks, ETFs, bonds etc. Similarly, it also has some great educational resources to help you master how to trade different assets and how to make the most of the trading platform. Click the link below to join Capital.com for an educational and professional trading platform.

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