Trading and / or investing on the stock market can be a very financially rewarding experience when proper planning and preparation are involved. In order to be successful at this game it is essential to have the best tools available, and that is why it is critical to have an account with the best online brokerage that suits your needs. Nothing will eat away at your capital as fast as having a bad online broker.
There are many factors that you should consider when starting a relationship with a broker for your new online account:
Minimum Initial Deposit Requirements
Some brokers require that you fund your account with a certain amount of new funds every year, are you comfortable with your candidate broker's requirements?
The cheapest option is not necessarily always the best option, because generally the savings comes at the detriment of customer service and the speed at which your trade is executed. If you are an extreme novice you might want to opt for a broker that provides more assistance, so research your candidate and see if they offer a library of self-help videos, and if they have a “live help” feature which provides you with instant access to a technical support representative that can help you in times of need.
Read the fine print! Is there a fee to open and / or close the account? How about a fee to fund your account, or transfer your assets into the new account? Is there a fee if you do not maintain a minimum monthly balance? What about anactivity fee? It is imperative that you read all of the fine print to prevent any nasty surprises later.
Read reviews online about the different brokers. Can you get access to quality help when you need it? How quickly can the customer service team resolve an issue if it arises?
Exchange Traded Funds (ETFs)
Think of an Exchange Traded Fund (ETF) as the modern take on the traditional mutual fund. These funds can be bought and sold like a regular stock during normal market hours, but have all of the perks of a traditional mutual fund. Some brokers let you buy ETFs with no commission, and some brokers even offer their own line of in-house ETFs. Do your research on what benefits your broker can provide you if you want to invest in an ETF.
What if your internet service is temporarily disrupted, does your broker allow you to execute trades via mobile apps, or over the telephone? In today's mobile age it is essential that your broker provide you with multiple reliable platforms to execute your trades.
Data / Charting Packages
The difference between a good trade and a great trade is the ability to read the charts well. How good is the charting and data package offered by the broker? Most brokers allow you to download and trade a demo account, and it is highly advised that you use this feature to gauge how convenient you are with the broker's software package (s).
Some brokers allow you to write checks and pay your bills. Consolidation of your finances might be an interesting option to consider from your new online brokerage account.
Some brokers will offer you some interesting perks for opening an account, such as 100 free trades, or a free iPad. If you are trying to narrow your search down between two candidates, the freebie promotion may be the deal breaker.