If you're relatively new to the world of investing, or if you invest small amounts of money at a time and rarely sell (as a Drip investor would, for example), you need to know about low-cost brokers. I put these into a different category than "traditional" discount brokers because they are generally less expensive for certain types of investors.

Over a year ago, I compared some low-cost brokers after receiving a few emails from Fools who found their accounts had dwindled to nothing because of changes in some of the companies' fee structures. Now, there have been more changes and more emails. So, just in time for Stock Up for Summer, we'll dive back in and see which of these low-fee brokers are offering the best value.

The Big Three in low-fee are ShareBuilder, BUYandHOLD, and FOLIOfn. (ShareBuilder is an advertiser on Fool.com.) While they might offer similar services, there are differences -- and there are circumstances where each might be the best choice for you.

The best way to break it down will be to look at different types of investors.

Minimal Mel
Minimal Mel is just starting out, and only has $100 to open an account. (Forgive the funny names; Highlights is one of my favorite magazines. At least I resisted using Goofus and Gallant.) Mel expects to invest small amounts of money on a sporadic basis. One month she might put $50 into a stock or two, other months nothing at all.

For Mel, both ShareBuilder and FOLIOfn will execute her buys for only $4 apiece. (Of course, Mel should realize that equals about an 8% transaction cost per buy, which is too high. She should let her savings build up until the cost of the trade is 2% or less.) More importantly, however, they have no monthly minimum so they won't charge her in the months she doesn't invest. At BUYandHOLD, on the other hand, she'd have to pay about $7 a month whether she invests or not; that is their lowest-cost plan.

Bottom line for Mel: ShareBuilder or FOLIOfn are great. BUYandHOLD is not acceptable because the monthly minimum would significantly eat into her savings.

Steady Sam
Steady Sam is a consistent investor. Each month, he Drips $100 into each of four different companies: Johnson & Johnson (NYSE:JNJ), Pepsi (NYSE:PEP), Anheuser-Busch (NYSE:BUD), and Microsoft (NASDAQ:MSFT). Occasionally he'll buy something else.

Sam will be OK with any of our three brokers. ShareBuilder might offer him slightly better value, as it charges $12 for up to six buys each month, plus $2 for each additional buy. If he executed more than seven purchases a month, BUYandHOLD and FOLIOfn would get the nod because they offer virtually unlimited buys for $15 a month.

Bottom line for Sam: Go with ShareBuilder for seven or less buys each month, and BUYandHOLD or FOLIOfn for eight or more.

Voluminous Val
Voluminous Val is very active, and executes numerous buys each month. She's able to sock away a good bit of her income on a regular basis, so she's constantly adding to her growing portfolio of stocks and occasionally buys new ones. As far as she can predict, she'll be making eight or more purchases with every bi-weekly paycheck, which will equal roughly 20 each month.

Bottom line for Val: The $15 unlimited options from BUYandHOLD and FOLIOfn are peachy. ShareBuilder offers up to 20 trades for $20, plus a buck a trade thereafter, but that's more expensive than the other two.

Different from discount brokers
With such low prices, why would anyone use a traditional discount broker -- which, depending on the company, can charge anywhere from $7 to $30 a trade? Two reasons.

First, real-time trades. When you execute a trade with a discount broker, it happens almost immediately. The low-cost brokers execute orders only once a day, or even once a week. In fact, this is the reason you're able to own partial shares when investing small amounts of cash; all investors' money is pooled during these buying windows and the shares are then split up to their rightful owners.

The non real-time aspect is no problem for Drip investors, however. It's far more important to stick to a regular schedule than to worry about timing purchases. If you do need to buy or sell immediately, ShareBuilder, BUYandHOLD, and FOLIOfn all offer real-time trades at reasonable prices.

Second, the prices I quoted above for the low-cost brokers were for buy orders only. ShareBuilder charges real-time rates to sell, or typically about $15. BUYandHOLD and FOLIOfn will simply count your sell orders as a regular trade and execute them during their next scheduled window, though, so the price depends on the plan. But again, Drip investors don't have to worry too much about selling prices; the vast majority of their trades will be buys.

Other considerations
If you're considering a low-cost broker, make sure you explore each company's website to see what it offers (links are provided below). FOLIOfn, for example, has what I consider a very interesting feature: "Ready-to-go Folios." These are baskets of stocks you can purchase that could prove useful depending on your needs.

For instance, there's the Folio 30, which is made up of the 30 stocks in the Dow Jones Industrial Average. If you put $100 into that, you'll actually own partial shares of every Dow stock. There are baskets of international stocks; large-, mid-, and small-cap stocks; high-beta and low-beta stocks. There's one for nearly every sector. There's a tobacco-free basket and a "labor-friendly" basket (made up of companies that are not on the AFL-CIO Boycott List and where more than 50% of the workers are represented by a labor union).

In all, there are over 100 of these ready-made "folios" available... they're almost like your own personal mutual funds, without the costly fees.

Bottom line
Most investors are best served by a discount broker. You can learn more about them and see the comparisons in our Broker Center. But if you match one of the profiles in this story and don't expect to do a lot of selling, you might be better off with one of these low-cost brokers.

Click through the links below, compare them all, and then choose one that doesn't suit your needs. (Just kidding! Of course, you're going to choose one that suits your needs.)

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Rex Moore is intrigued by the Worst of 2002 Folio, which is made up of the worst-performing stocks of 2002 in FOLIOfn's universe. At press time, he owned shares of Anheuser-Busch and Microsoft. You can see the rest of his holdings on his profile page, and the Fool's disclosure policy here.