If you’ve decided to diversify your investments and are interested in purchasing stocks, don’t overlook the benefits of working with an online stock broker.
Online stockbrokers serve as middlemen to coordinate the transaction between the buyer and seller when trading stocks.
While most stockbrokers typically charge fees per transaction, online stock broker firms typically charge much less for their services.
Many larger online stock brokerage firms are also set up with highly user-friendly websites so it’s become very easy for the average person to engage in stock trading without paying hefty fees.
Here are some tips for finding the best online stock broker for your needs:
Determine what your priorities are.
You need to decide what is most important to you as far as the trading process goes. Do you need mobile trading services because you’re always traveling? Is the cost per trade a high priority for you? What other services might you need from your stockbroker?
Make a list so you know what key services to look for as you start comparing.
There are dozens of online stock brokers out there but only some have a good reputation and a track record of treating their clients well. Make sure you’re working with an established broker and compare minimum deposit requirements and other key details.
Some of the most well-known online brokers include: ETRADE, TD Ameritrade, TradeKing, OptionsHouse, and Scottrade.
Compare fees and service charges.
Every online stock broker charges a different set of fees and may offer different memberships or trading levels depending on how much you are prepared to invest and how frequently you trade (i.e. buy or sell investments).
Make sure you’re aware of all of the “hidden costs” that may be associated with your transaction and take the time to read the fine print so you know what types of fees your account might incur.
Review minimum deposit information.
Every online stock broker also has different minimum deposit requirements. For example, TradeKing has no minimum deposit while TD Ameritrade has a $2,500 minimum deposit requirement.
Consider your budget and how much you’re willing to part with to set up your online stock trading accounts.
Look at the trading tools available online.
Every online stock broker will have a set of trading tools available for clients so that they can get quotes, monitor tickers, and get updates about different trading options.
Take some time to go through each site to see which one you feel most comfortable using.
You can find many websites and blogs that post reviews of different online stock brokers and some provide unbiased information about their experience with the firm’s customer service department and overall trading experience. Use these as a resource when deciding which online stock broker you want to pick.