When you want to invest your money in a brokerage or retirement account, you will have brokers at your disposal – but not all brokers are equal. Before deciding which broker to entrust money to, it is important to look at several factors, including the number of investment opportunities they provide and the customer service available.
the best broker for free stock trading
1. Numerous investment opportunities
Diversification is a strong investment strategy, so you will want to divide your investments into different types of investments. Investment options include:
- Mutual funds
Futures are not available at every single broker. If you know that futures will be part of your investment strategy, look for a broker that meets your needs. Otherwise, a general combination of joint investment options will suit most investors.
2. Low price for trade
Whether you plan to be an active trader or a more passive one, it is important to keep in mind the costs of trading different types of investment products, as these seemingly small fees can really add up. With the exception of mutual funds free of charge, expect to pay trading fees on the following investment transactions:
- Futures contracts
- Mutual funds
Among brokers surveyed by GOBankingRates, trading costs ranged from $ 1 for a bond to $ 76 for a mutual fund. Compare the trading costs for the type of investment vehicle you plan to invest most in with a broker to find out which will be most profitable for your needs. The best brokers will have low costs.
Read this: The best robo-advisors for your investments
3. Many types of accounts are offered
Some brokers may be in one place for all your investment accounts, while others may not provide all the types of accounts you will want to invest in. Keep this in mind when choosing your broker. The types of accounts you might want include:
- Traditional IRA
- Roth IRA
- Guided / guided
- 529 college savings plan
4. Low initial investment requirements
Many – but not all – brokers will require minimal investment to open an account. Depending on your financial situation or investment goals, you may not want to invest thousands of dollars to get started. All Ally Invest, Fidelity and TD Ameritrade do not have a minimum account opening requirement, so this could be the best option for new investors or those without sufficient available income to open a high minimum account. Keep in mind that some brokers will not need a minimum amount to open an account, however some investments may. Investigate before you engage with any intermediary.
5. Accessible customer service
Investing can be a complex process, depending on how advanced you want to get. And when you need help, you want to make sure you get it easily. Look for a broker that gives you access to financial advisors, 24-hour customer service and live chat service so you can get answers as soon as you need them. If you are someone who likes to be able to check accounts and trade on the go, opt for a broker who has a mobile app.
6. Advanced research and educational tools
Whether you are a beginner or an advanced investor, it is important to have access to tools to help you learn the basics of investing, as well as stay up to date with the latest news and trends. Some brokers do not provide any or limited research and education tools, which can harm your investment skills and knowledge. Others provide basic tools, such as mutual fund security guards, while the best brokers offer advanced tools that can include multiple platforms and an entire technology package that allows you to make informed investment decisions.
7. Promotional or introductory offers
While the best promotional offer doesn’t always equate to the best broker, it can definitely be an added bonus for a broker that already marks all your other frames. Promotions can range from cash bonuses to free shops. There are certain requirements you will need to meet to qualify for these promotions, so read the fine print before contacting any broker.
Depending on the type of investment account you want to open, there are other factors you should consider.
- Roth IRA and traditional IRA: When looking for the best Roth IRA or the best traditional IRA, you should consider service fees, commissions, monthly maintenance fees, early withdrawal fees, and closure fees.
- 401 (k) companies: If you are choosing a 401 (k) company for your small business – or just want to see where your current 401 (k) service provider is – examine participant fees, withdrawal fees and asset-based fees that you and / or your employees may need to pay depending on the broker. The top 401 (k) companies will have low fees or no investment opportunities at all.
- Robo-advisors: Depending on the broker, you may or may not have to pay a service fee. Some of the best robo-advisors do not charge a service fee.
- Online stock brokers for beginners: The best online broker for beginners will provide easy access to financial advisors to help you make wise investment decisions and learn more about the best investment strategies.
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Last updated: May 18, 2021