Many investors stay with the first online discount broker they start with. Because of this it is important to do thorough research into what makes an online broker right for you. In the last ten years online stock trading has become much more common. Internet technology and new companies have made stock trading possible for much of America. In order to stay competitive there are usually no minimums, no inactivity fees, and best of all trades are as low as $4.95. Those features are in addition to helpful realtime stock quotes, advanced trading capabilities, and ample free research tools. Starting an account is easier than ever and you can usually start trading within an hour of signing up. But what is the best broker. What are the features that matter most. For the majority of investors the basic service of any company will be more than adequate. Beyond just the basic usage what else matters when comparing the best online discount broker.
Trading and Service Fees. If you are trading very frequently or have a small initial sum to invest these fees will make the difference between making a profit. With the advent of true discount brokers these fees have been driven down to almost nothing. One company in particular will give you five free trades each month if you have a minimum balance of $25,000. But trading fees are only part of the equation. Most discount brokers charge very few account or maintenance fees. The biggest difference between most brokers is in their IRA accounts. IF you are starting an IRA make sure you look at all the possible fees that may be charged when you start one. The best online brokers will have no fees for IRA accounts. There is an exception with closing an IRA (because everyone charges to close an account). Fresno, CA
Ease to open account. Some brokers require much more than other brokers. In almost all cases signed tax documents are required to be faxed to the broker. The best brokers will allow you to do everything online without the need to mail or fax anything in. Once your account is created the other issue is funding your account. Bank transfers from your checking account are the easiest way to fund an account. The best brokers allow you to fund an you account within minutes of starting. When a brokers makes you wait days or have complex funding options it delays your potential trading days. Look for brokers that keep you safe but don’t require too much hoop jumping to move money to and from your account.
Customers Service. What are the hours of their customer service? Is it possible to talk with someone on the phone or in person. The best brokers will balance cost and customer service by answering you r questions you need answered in a timely manner. If a broker doesn’t operate customer service when you are available it might be a good idea to look somewhere else.
Third Party Recognition & Awards. The best online brokers will be recognized in the media and financial news. This shouldn’t be confused with glorified advertising (like a spot on Super Bowl Sunday). If you want to find the most expensive brokers look for ads on the T.V. If you want to lowest priced and best service brokers do your research online. You’ll find much more qualified information and impartial reviews there.
Money Management & Cash Investment. The best brokers will allow you to sweep your unused cash into a money market account to collect interest while it’s idle. With the extremely low interest rates as of late many brokers have removed this option. When interest rates return to regular levels look for brokers that provide this option. The other money management option that many dividend investors prefer is automatic dividend reinvestment plans(DRIP). This allows you to buy stock with the dividends you receive.