TOP 10 ONLINE STOCK BROKERS AND HOW TO CHOOSE ONE
If you want to learn how to buy stocks online, you will have to pick one of the many online stock brokers. E*Trade was one of the first and they pretty much blazed the trail for all the others. Now there are a good 20 or so brokers and for someone who is a beginner investor, it can be a bit overwhelming when trying to make a choice.
Most of the online stock brokers that you have to choose from are good solid companies. Their services differ in a few ways, the most notable being their commissions. Commissions that you, the stock buyer pays, for buying stocks have come way down since these online brokers came on the scene. If you go to full service brokers such as Smith Barney or Merrill Lynch and place orders the old fashion way (over the phone), it may cost you upwards of $100 per trade. But these companies come with a more personalized service that you don’t get with any of the online brokers.
The top online stock brokers all have commission fees that range between $4.95 to $19.95. Most of them fall somewhere in the $7.00 to $10.00 range and that is very reasonable compared to what the full service brokers charge. Some of the top 10 online stock brokers are:
E*Trade
Scott Trade
Charles Schwab
TD Ameritrade
FirstTrade
TradeKing
Fidelity
Ameriprise Financial
Zecco
OptionsXpress
As mentioned, these are all good online brokers that can be relied on. They will have different price structures but in the end the prices are quite similar. One thing to look out for is customer satisfaction. Some of these brokers, like E*Trade, may have a local office in your city where you can go to ask questions and speak to a real person if you like. Others, like TradeKing will not have that physical presence so you might want to take that into consideration.
The main area where these top ten online stock brokers will differ is their research features and their online software interface. For me, E*Trade has a great website that is easy to navigate and understand. It is simple for me to find what I am looking for and to get the data displayed in a way that I like. On the other hand, Ameriprise Financial has a interface that is so hard to navigate that I sometimes give up. Each one of these online stock brokers will have their own proprietary system and you might find out you really like one of them and dislike others. This will be a personal preference on your part.
These online brokers will all differ in small things such as the minimum deposit needed to fund an account and they will have promotions from time to time for new investors. If the commission fees, the minimum deposit amounts, and things like that are important to you then you can make your choice solely based on those. Otherwise you might want to go with one of the bigger names such as E*Trade, ScottTrade, or Charles Schwab.
