Money Guide Finding a Discount Broker Great Ideas Collection
Borrowing
Discount brokers offer you similar services to a full service brokerage firm, so why shouldn't you take advantage of their substantial trading discounts? Of course, there is a sense of safety and security when parking your money with one of the big name houses; but face it, when push comes to shove, who do you think they are concerned with first? Probably not the small investor.

Here are some tips to consider when picking a discount broker:

Minimum Investment

Some firms have a minimum investment requirement of $1000 or $2000.

Fees

Although there can be many different fees (much like a bank), the three to look the closest at are the monthly account maintenance fees (a charge for them to maintain your account), trading fees (usually limit orders are more expensive than market orders, which can be a factor if you are "playing the market") for buying and selling stocks and bonds, and money transfer fees (to get money in and out of your account). Estimate how much these charges will be for the kind of investing you will be doing, and then compare similar scenarios at other firms.

Investment Tools

Look for automated telephone and internet access for quotes and trading.

Moving Money

Understand how you can get money into your account and how you can get it out. Are there fees for EFTS deposits or for issuing checks?

Research

If you are a beginning investor, it may be helpful to tap into professional advice. What research does each firm offer?



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