Most brokerage firms, big and small, offer online accounts. Large banks and brokerage houses typically offer costumers the option of personal management of the account with a single broker, online services or both. Some discount-oriented firms operate only –or nearly exclusively –online. Ultimately, you need to assess which type of investor you are before settling to the online brokerage that’s right for you.
Match your needs as an investor to your account choice. If you are comfortable doing your own research, investing, trading and portfolio management, it is possible to go the reduction path. If you are uncomfortable as a financial do-it-yourselfer or you’ve got considerable amounts of cash to invest, pick a full-service broker with an online presence. In this case, you will generally have the option of earning moves yourself online or consulting with your personal broker over the telephone.
Establish automatic monthly transfers to your investment account from your bank account to prevent account minimums, if appropriate. Minimum opening deposits vary from company to company. Some firms don’t use account minimums, especially in the event that you invest mechanically. Other people need non minimums, which tend to vary from $500 to $2,000. Some full-time agents have higher account minimums, which may easily approach tens of thousands of dollars, especially in the event that you would like the option of personal service.
Pay as little as possible in commissions and other fees. Generally, you need to cover when you place a trade on the web. This cost varies by broker and is often reduced for active traders or account holders that maintain certain accounts. As”Consumer Reports” warns, keep an eye out for other fees also, such as account management fees, if your brokerage actively manages your account in addition to providing you with online privileges.
Open your brokerage account through an account-opening special. Some businesses offer free trades, deals on commissions or even free cellular phones and other goodies if you meet account-opening terms.
Apply for margin trading capabilities, if you are a seasoned investor, who isn’t adverse to risk. Not all online brokerages offer margin trading. Margin accounts permit you to borrow cash from your brokerage against the equity in your account to use for investment. You pay interest on what you borrow, so see who offers the most competitive prices.
Compare the services offered by the online brokerages you are thinking about. Most companies list themby account type, at their website. Most offer a wide selection of alternatives, from general trading accounts to IRAs. Ultimately, it, again, comes down to who provides the lowest prices and best prices for active traders, if appropriate to your situation.
Look for online brokerages that offer several ways to manage your account. Most online firms permit you to execute trades and other account services over the telephone by means of a live broker or automated platform for a fee. Increasingly, online brokerages provide access through smartphone applications. If you are away from a notebook or PC, you’ll want to make sure you still get access to your cash.