Choosing an Online Investment Broker
Whether you are looking to use a retirement account for investing, or whether you just want to take advantage of a bear market to make some carefully considered investments for futures gains, using an online broker can be a good way to get started. Often, with online investment accounts, you can do your own research and you have a great deal of control over which investments you make.
However, like any other investing decision, it is important to consider your individual needs when choosing an online investment broker. Investopedia offers some tips for choosing an online investment broker that is right for you:
- Consider a full-service broker. Even though a full-service online investment broker costs more than the discount brokers, if you are a beginner it can be a good idea to start with the support and knowledge of a full-service brokerage. Additionally, you may find that the discount investment broker doesn’t have the investment vehicles you are looking for. A discount broker will save you money, but you need to make sure it really is the right fit for you.
- Availability and flexibility. Check the site at various times during the day (including peak trading times) to see whether or not the site has trouble with availability. You want to make sure that you will be able to make trades when you want to. Additionally, find out whether the online broker allows you to make trades via phone — and what kinds of fees are charged for phone trades.
- Minimum deposit. Figure out what kind of minimum deposit you need to start — as well as what your account minimum should be. Some online investment brokers require very high minimums. If you can’t afford the minimum account balance, perhaps you should move on.
- Customer service. Make sure you will have access to good customer service. When you need help with your investment account, you need help NOW.
- Find out about cash in the account. In many cases, an online investment broker will give you a modest (3% or so) return on the cash you have sitting in your account. This is a nice bonus. But not all online brokers offer this, so see if you can look for one that does.
