The Best Online Brokers for You


Photo credit: jseliger2, Flickr.

To make your financial dreams come true through investing, you'll probably need to sign up with a brokerage. These days, online brokers are the way to go for most of us, offering convenience and low prices, among other things. Browse the Internet or flip through some periodicals, and you'll find lots of rankings of the best online brokerages. But don't just go with numero uno. Take a little time to determine which of the many online brokers out there is best for you.

Here are a few key factors to consider.

Costs
Sure, online brokers with the lowest commission costs and other low fees are enticing. But there's more to a brokerage than just cost, and a lot depends on your investing style. For example, if you are a good buy-to-hold investor, hanging on to most of your holdings for many years, then you probably don't trade often. If you're considering two online brokers, one of which charges $10 per trade, and one which charges $5, you're only talking about a $50 difference, in total, if you place 10 trade orders per year. If you're an active trader, though -- and remember that such folks often underperform -- trading once a day, or about 250 times a year, a $5 difference becomes $1,250. A brokerage's costs are much more important to some people than to others.

Services
Factor the services of online brokers into your deliberations, too. Do you prefer having a brick-and-mortar location available so you can speak with someone at the brokerage face-to-face or conduct a transaction there? Then seek online brokers that have physical locations nearby. Check out customer service, too. A brokerage's website might let you know if it offers 24-hour phone support, for example. And you might dig up some reviews online, too. The folks at stockbrokers.com, for example, recently listed the best online brokers for customer service, ranking Fidelity Investments at the top. Think about all the services you might want and use. If you're interested in the stock research reports (or other research) that many online brokers offer, look at each contender brokerage and see which one offers the most appealing range. If you want to buy and sell shares of mutual funds, see how many funds are available through a given brokerage and how much it costs to trade them.

Minimums
Don't overlook the importance of account minimums -- at least if you're an investor of limited means. Some good online brokers have account minimums of $2,000 or more, but many others require just $500 or less. Some don't even have a minimum!

Extras
Finally, check out what other extra features are available at the online brokers you're considering. Some, for example, offer banking services such as check writing and online bill-paying. Others have strong investor education nooks that can be helpful. Some are even branching out into financial planning services and insurance. Keep in mind that a brokerage might not always offer the best banking services or insurance products, but it's worth looking into. Finally, if you're interested in accessing your account on your smartphone, check out the available apps – and the security measures they offer -- for online brokers you're considering.

With these factors and any others that are important to you in mind, check out some solid online brokers, and see which one seems to best fit your needs.

Grab dividend stocks for that new brokerage account
The smartest investors know that dividend stocks simply crush their non-dividend-paying counterparts over the long term. That's beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor's portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (1) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3007768, ~/Articles/ArticleHandler.aspx, 10/25/2014 9:10:19 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement