7 Things to Look for in a Brokerage Account

If you're new to investing, you have options. You can invest in a dedicated retirement plan, but then you won't get to access your money until you're a senior. Or, you could open a brokerage account and have more flexibility. But how do you choose a brokerage account for the first time? Here are some features to look out for.

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Most brokerages charge a fee or commission for every trade you make (though some don't). You'll want to do some comparison shopping to make sure you're not being overcharged, especially if you think you'll engage in a high volume of trading, as high fees could eat into your returns.

Some brokerage accounts charge different fees on top of their standard commissions for trading activity. These include withdrawal fees and inactivity fees for not using your account. Your best bet is to find a brokerage that doesn't impose these extra fees so you don't wind up throwing away money.

Buying stocks and bonds is pretty much a given when you open a brokerage account, but you may want to invest in other products, too. When looking into a brokerage account, aim to find one that gives you the option to buy mutual funds and ETFs (exchange-traded funds), especially if you're more of a hands-off investor who isn't up to the challenge of vetting individual companies. Both mutual funds and ETFs effectively let you buy a bucket of stocks or bonds with a single investment.

These days, a growing number of brokerages are making fractional shares available to account holders. Fractional shares let you buy a piece of a share of stock if you can't afford to buy a whole share. This option is very helpful in building a diverse portfolio.

Just as fractional investing is becoming more available, so too are brokerages starting to offer access to cryptocurrencies. If this is an area that interests you, then it's a feature to look out for, but make sure you understand the risks associated with cryptocurrencies, and look out for any added fees that might apply to crypto trades.

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Many brokerage accounts impose an account minimum, but some are more flexible than others. For example, you may find a brokerage that lets you open an account with a mere $500, whereas another account might impose a $3,000 minimum.

A lot of people start off their investing careers not really sure of what they're doing. A good brokerage account will include tools and resources to help you get started with investing and grow your knowledge along the way.

The right brokerage account could make you a more successful investor. Keep these points in mind as you explore your options and embark on your investing journey.