Compare online brokerage fees
This rate becomes a hurdle that your investments have to clear in order to be profitable. If you don't earn a return higher than the interest you are paying, you will lose money overall.
So, for investors who plan to make heavy use of margin, finding the lowest margin rate is an important factor in choosing a broker. Interactive Brokers is an online firm that clearly wants to attract margin business, because it stands well apart from the crowd by charging a margin rate of just 2.
This is well below the average rate of 7. Note that the rates charged often depend on the amount of money on margin. When comparing rates for your own purposes, you should focus on rates applicable to the margin balance you are likely to maintain.
Investors should factor in regulatory events and arbitration rulings when choosing an online broker. Arbitration is a particularly hot issue with consumer advocacy groups these days. Brokerage agreements commonly require that customers waive their normal legal rights in favor of having disputes settled by an arbitrator. Many people feel that this system stacks the deck against consumers, and if nothing else, if a firm has a history of frequent arbitration cases, it is a sign that they often have disputes with their customers.
Besides topping the survey overall, Motif Investing led this category. According to the Financial Industry Regulatory Authority, an independent-non government regulator of U. Rowe Price, each of which has had a negligible frequency of disclosure incidents. Unlike the other categories in this study, evaluating research resources is somewhat subjective.
To take in multiple viewpoints, MoneyRates. MoneyRates created a standardized score based on these reviews, and averaged the scores for those online brokers that were reviewed by at least two of these three sources.
While a number of relatively new entrants have made their mark in the online brokerage space through low commissions and technical capabilities, research resources can take some time to develop so it is no surprise that this category was led by three firms that have each been around for well over 30 years or more.
Merrill Edge, the online brokerage arm of Merrill Lynch, earned the best average rating for its research resources. The broker features markets and product centers for stocks, options and more. Charles Schwab offers tools for research like access to breaking market news from Reuters and other major outlets and its proprietary method for rating performance called Schwab Equity Ratings. Scottrade also has the latest stock market news and breaks down performance by sector and industry on its Market Overview page.
Again, from cost to range of services, competition is heating up among online brokers. That's good for consumers, but only if you do some comparison shopping before choosing. The above rankings should give you some hints for where to look, but since brokerage firms are frequently adjusting their offerings in an effort to compete, you should check the latest information before making a decision. April 4, Investment. Methodology Besides commissions, there are other factors like account minimums and trading fees to consider.
Cost-effectiveness for small investors Margin interest rates Regulatory disclosure incidents Research resources MoneyRates averaged the rankings of 19 online brokerage firms across all of these categories to choose the best online brokers overall, and then produced separate rankings for each of the above categories. Best Online Brokers Overall Winner: Motif Investing Motif Investing took the top spot overall, with especially high marks for its clean disclosure record and cost-effectiveness for small investors.
But just how many of them can offer cheap trading, expert customer service, lightning fast execution and cutting edge technology? Let's take a look. Ally Invest fits right at the top of our list as it seems to do everything very well. If you follow SmartMoney, Barron's and other graders of online stock brokers, you'll find Ally Invest formerly TradeKing winning awards almost every time they are handed out. Finally, Ally Invest is a leader in educating customers and you'll find hundreds of resources to help both amateur and professional investors.
See our full review of Ally Invest. To open up an Ally Invest account, visit their official website at www. Scottrade currently offers fee-free IRA accounts and has fantastic customer service. In my 5 years of trading with Scottrade, I have never encountered a single delay, problem or inconvenience.
While many other brokers offer similar services for cheap stock trading, I've found one that has been nothing short of fantastic. I'm not about to risk having problems for a dollar here or dollar there. To open up a Scottrade account, visit their official website at www. Fidelity isn't your normal online stock broker. Most mobile devices are compatible with Fidelity. With hundreds of webinars to educate investors, Fidelity is a great place to begin your investing career.
To open up a Fidelity account, visit their official website at www. However, for the casual investor, it may be a better idea to go with one of the other brokers, to save money on fees. In addition, Capital One Investing now also offers managed portfolios.
One of the premier benefits of having an account with Capital One Investing is that it can be connected with your Capital One account , making transactions to and from the bank a snap. There is no minimum required to open an account and they are offering a variety of bonuses based on the amount of your initial deposit. To open up a Capital One Investing account, visit their official website at www.
ChoiceTrade isn't your everyday online stock broker and if you visit their website, you'll know that right away. However, the mail drawback to using ChoiceTrade is their platform. If you're looking for good technology, you will have to pay for it. ChoiceTrade does feature an in-depth investor community where you can ask thousands of fellow users your questions. To open up a ChoiceTrade account, visit their official website at www.
In , they were ranked 1 for long-term investing by Barron's and 1 overall broker by StockBrokers. To open up a thinkorswim account, visit their official website at www.
SogoTrade is one of the quieter online stock brokers and unless you've already signed up an account with them, this may be the first time you've heard of them. With their four unique trading platforms and an app available for Apple or Android devices , SogoTrade continues to implement game-changing technology. All of their platforms provide customers up-to-the-second data to help them make the well-informed trades. To open up a SogoTrade account, visit their official website at www.
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