It’s pertinent to keep these eight things in mind when choosing a discount brokerage, as thinking about every item on this list will allow you to choose a plan that is right for all of your needs.   

What kind of service are you looking for?

If you find yourself needing some advice on your investments, then your best bet is to consider a full-service broker or a robo-advisor. This service is ideal for individuals who have complicated investment needs or are in a complex financial situation. If you prefer a do-it-yourself approach, then a discount/online broker is likely your best bet.

What are the fees?

First and foremost, before opening an account, you should always read the broker’s schedule of fees and charges to understand your incoming charges. Many times, hidden charges may quickly erode your returns. In this case, contact customer service to answer any questions you have about confusing fees.

What are the account minimums?

A brokerage may require very high account minimums to open an account, or they may not require any minimum at all. It’s important to do your research on such requirements.

What type of account and what for?

Most brokerages offer a variety of accounts, for different purposes. For example, these may include retirement accounts, taxable accounts, and custodial accounts. Depending on the format, there might also be additional charges. Some brokerages allow investors to invest in standard securities, such as stocks, bonds, and funds, but not all will allow investors to invest in more complex or riskier investments such as penny stocks, foreign currencies or options.

How often will you trade?

If you plan on trading actively, executing multiple trades per week or even day, then you need to look for a brokerage that offers low commissions on transactions.

Commission-free products or sign-up bonuses?

Two of the most popular items offered by brokerages are commission-free exchange traded funds (ETFs) and no-transaction-fee mutual funds. If you plan on investing in mutual funds or ETFs in your portfolio, then saving money on commissions and fees is vital for optimizing your returns.

Investment research or other perks?

Analysis of specific investments or trends in the market is an important resource for many investors. Some brokerages will offer these at free of charge as a sign-up incentive. Other offers could include online checking, debit card services or portfolio diversification advice.

Customer experience?

For investors that are not tech savvy, this is particularly important. An easily navigated platform and customer service system is pivotal to the investor’s overall investing experience. In fact, if you think you may need broker assistance for your trades, consider opting for a broker with a brick-and-mortar presence vs online altogether.

Featured Image: depositphotos/Rawpixel