Picking the right online brokerage comes down to your priorities. Some investors are willing to pay higher trade commissions for a state-of-the-art platform; others count costs above all else. Settling on the best option for you means weighing the following factors, which vary from broker to broker.
There are dozens of companies offering brokerage services on the internet, and many of them are just as good as or better than traditional, brick-and-mortar businesses, but how to decide which one is best for you? Here are the critical factors you should consider.
Minimum deposits may not be minimal
See how much of an initial deposit the firm requires for opening an account. Watch out for high minimum balances because some companies require as much as $10,000 to start. This might be fine for some investors, but not for others.
Product selection is important
When choosing a brokerage, most people are probably thinking primarily about buying stocks. Remember there are also many investment alternatives that aren’t necessarily offered by every company. This includes CDs, municipal bonds, futures, options and even gold/silver certificates. Many brokerages also offer other financial services, such as checking accounts and credit cards.
Customer service counts
There is nothing more frustrating than sitting on hold for 20 minutes waiting to get help. Before you open an account, call the company’s help desk with a fake question to test how long it takes to get a response from them.
Return on cash is money in the bank
You are probable to always have some cash in your brokerage account. Some brokerages will offer 3-5% interest on this money, while others won’t offer you a dime. Reach out to the brokerage through call and/or email to find out what it offers. In fact, this is also a good question to ask while you’re testing its customer service.
Extras can make a difference
Be on the lookout for extra treats offered by brokerages to people thinking of opening an account. Don’t base your decision entirely on the $100 in free trades, but do keep this in mind.
You can buy and sell stocks using an online broker with just one click of the mouse from about anywhere around the world. The right tools for the trade are key to every successful venture and finding success in the stock market always starts with choosing the right broker. Thus, consider all the critical factors mentioned above when choosing a reliable online broker.
In case you missed the first part, you can see it here.
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