Find the Best Broker Online for You
By: Ryemon | Posted: 22nd April 2009
To find the best broker online, first ask yourself these couple questions. Are you looking to invest long term or trade more frequently? Do you want someone to hold your hand and tell you what to do or take a more independent path? Selecting a broker is about prioritizing your needs and getting what you value. Your first pick for a broker may not have every feature you want but get the most valued ones.
Once you have at least a vague idea of your needs you can use the following five features to pick the best broker online for you.
Investing products - The investment products offered varies from broker to broker. Stock, bonds, and options are offered by most and some online brokers will expand into derivatives. Also check if the broker has accounts with tax advantages such as IRA's. It's important to get a broker that has the products you want.
Minimum account size and fees - Many online brokers require a minimum deposit to open an account. Is a $10,000 minimum account size ok with you? Also, some brokers, may offer a $0 minimum account size, but then charge maintenance fees. This is when you want to get out the magnifying glass and read their fine print. For me the best broker online is one with neither a minimum nor fees.
Trading commissions - Investing means transactions costs. While there is no way to get around these try to keep them to a minimum. One part you can control is the commission rate, which, will depend on the service level of each broker. Online brokers that focus on independent investors tend to have lower commissions than full service brokers.
Online access - Make sure that you can trade through a secure web based trading platform and not have to install software from the broker. At the very least you should be able to pull up your account via the web. Investing and trading is challenging enough with out not being able to trade because you're not home.
Check legality - A very important but easy step is check the broker is registered and insured. Brokers, online or not, have to be registered with FINRA. They should also have insurance through Securities Investor Protection Corporation (SIPC).
So keep these things in mind while looking for the best broker online and it will make your trading or investing experience a lot smoother.
Do you want to start investing online? Then check out my blog post Start Investing Online and see how easy it is.
Are you interested but unsure about investing? Here are two articles to help you, Three Reasons Start Trading Online and Get Over the Fear Start Trading Online.
Start Cheap Online Trading with Zecco.
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Tags: vague idea, bonds, stock, maintenance fees, secure web, online brokers, magnifying glass, ira, trading platform, investment products, full service brokers, derivatives, best broker