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7 Things to Look for in a Brokerage Account

Author: Maurie Backman | April 21, 2021

Person using mobile trading app to buy and sell stocks

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Find the right 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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The word Fees spelled out in blocks surrounded by blocks with percentage signs

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1. Low fees for trades

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.

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Young man looking sad as money flies out of his wallet

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2. No extra fees

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.

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Woman sitting at table with others and looking at stock chart on laptop

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3. A wide range of investment choices

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.

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Hundred dollar bills formed into a circle and split into sections like a pie

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4. The option to buy fractional shares

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.

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Messy stacks of physical silver and gold Ethereum coins

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5. The option to invest in cryptocurrencies

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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As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

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Young man smiling on laptop at home

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6. A reasonable account minimum

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.

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Young woman writing in a notebook in front of computer

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7. Educational resources

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.

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Investor holding smartphone with stock market results

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Find the right place to invest

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.

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