Opening an online brokerage account

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Opening an online brokerage account

By Jakob Jelling
Cashbazar.com

The Internet continues to change our lives and the ease and convenience of online investing is just another example. The low cost of trading stocks online has been part of the reason for the popularity of online brokerages. There are now many alternatives for buying and selling stocks using both full service and discount online brokerages.

Many experienced investors who have always used traditional brokers in the past are beginning to conduct more and more business within the online trading side of their brokerages. A few of the most popular full service brokerages are Charles Schwab, Fidelity, and TD Waterhouse. Theses brokerages tend to assist experienced investors with more than $100,000 in their portfolios.

Most beginning investors who simply want to try out online investing often do not have large amount of money to invest initially. If this describes you then a discount online brokerage may be the best choice for you. When choosing a discount online brokerage there are several areas to consider.

1. Ease of use. Investors should be able easily navigate the site.

2. Excellent customer service and trading support. Online investors should be able to speak to a customer service representative when needed without being on hold for excessive period of time.

3. Quick trade execution. Quick trade executions are very important to online investors.

4. Ease of research. Online investors need regular access to research on various stocks and company information.

5. Maintenance fees. No one wants to be surprised by hidden fees. When choosing a discount online brokerage be sure to read the fine print regarding all costs associated with trading. (1)

6. Initial deposit required to open an account. The average amount required to open an account to buy and sell stocks is just under $2,000. Some online brokerage firms have minimums as low as $500.00.

If you are new to investing be sure to choose a brokerage which has a good stimulated trading application. Stimulated trading programs allow the investor to practice without risking real money.

The following is a list of good discount online brokerages for the beginning investor.

Ameritrade: www.ameritrade.com - Ameritrade requires $2000 to open an account and trades are $8.00.

HarrisDirect: www.harrisdiect.com - HarrisDirect is a great firm for the beginner because there is no minimum deposit required to set up an account.

Datek: www.datek.com - Datek also requires an initial deposit of $2,000.

E*Trade: www.etrade.com - ETrade requires an initial deposit of $1,000 and $14.95 to trade stocks.

Scottrade: www.scottrade.com - Scottrade offers trades for as low as $7. Their minimum amount required to open an account is $500.00.(1)

Take some time to check out all of the popular brokerages to determine which one might be right for you. Decide what your needs are with respect to customer service, use of use, etc. Determine how much money you can afford to put into your brokerage account and your ready to get started.

1. Sindell, Kathleen, PhD. Investing Online for Dummies. Indianapolis: Wiley Publishing 2002

About the author
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

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