One of the first things I did when I started investing was set up an account with an online stockbroker. There was a lot more to learn before I could actually start and buy stocks online, but having an online brokerage account set up and ready made it quick and easy to get started once I was ready.
Choosing the right online stock broker isn’t as easy as picking the cheapest online stock broker and being done. There are many brokers, for stocks, bonds, and other investments, that cater to different people. In addition to that, some are just better than others.
Here are my top picks for brokerage firms. They are all online firms. You can choose a full service broker and investment professional that you can meet with in person, but if you’re planning to do your own research and choosing your own investments, an online broker is cheap and efficient. If you plan to invest more hands off, Sharebuilder has lots of mutual funds to invest in.
My Personal Broker
Sharebuilder
I have an account with Sharebuilder, and I use it for my own portfolio. Since I signed up, Sharebuilder has been bought out by ING Direct. Coincidentally, I had both an ING Direct savings account and a Sharebuilder investment account. Now they are both connected. This is great for those who want to minimize the number of open accounts they have. You can also easily transfer money from one account to the other. You can sign up for a free ING Direct Orange Savings Account here.
Who Should Use it
Sharebuilder is very easy to use, very inexpensive, and a trustworthy, safe broker. They have been around longer than many other popular online brokers. Personally, I like Sharebuilder because it is affordable for the regular, long-term investor. Other discount brokers may be better for traders because they have different fee models, but Sharebuilder is great for automatic and long-term investing.
Fees
If you’re planning to invest on a regular basis long-term, Sharebuilder offers a fee structure of $4 per trade on Tuesdays. Set up an automatic investment weekly, monthly, bi-monthly, or whenever you want. It is very affordable. More of your money is being invested and less is going to waste on fees.
Sharebuilder offers both 100% no-load funds and some load funds. No-load funds are great because there are no transaction fees. Set up an automatic investment or invest periodically and pay only the price of the shares.
Trades cost $9.95 each, unless you sign up for a discounted program where you pay a monthly fee and get a cheaper trading fee. This is better for those who plan to trade frequently.
Pros
I like Sharebuilder because I can buy shares of stock or invest a certain amount in shares. This means if I want to invest $100 and shares cost $32 each, I can purchase 3.125 shares. This is a great feature for those who plan to invest small amounts, but it’s beneficial for all sorts of investors.
Sharebuilder also has some of the best no-load mutual funds available. If you don’t want to waste time researching and picking stocks and investments, mutual funds are the way to go.
One of my favorite things about Sharebuilder is that I have it easily connected to my ING Direct Savings and Electric Orange checking accounts. I have all my money all in one place. You can sign up for an ING Direct Savings account here and an Electric Orange checking account here.
Security is a big concern for many investors using online accounts. Identity theft is a real thing and hackers are always working hard to get our money and information. Sharebuilder has a lot of strong security features. I have never had so much as a security scare with them for the past 5 years that I’ve been with them. Always make sure there is a little padlock in your address bar when you login to ensure you’re in a secure site.
Cons
As I mentioned earlier, Sharebuilder isn’t best for heavy traders. If you want to day trader or buy and sell stocks several times a month, you might be better off with an account that caters to traders with less expensive trading fees. If you trade semi-frequently, one of the discounted programs might work well for you, especially if you plan to also have mutual funds and other investments and you want your portfolio all in one place.
Sign Up
If you’re ready to set up an account with Sharebuilder, you can sign up by clicking here. The sooner you get started, the sooner you will be able to begin investing. It costs you nothing to get started. Right now, you can get a $50 bonus when signing up!
TradeKing
Remember how I said Sharebuilder wasn’t the best for trading? The next two stockbrokers online are much better for traders with lower trading fees. TradeKing is the first we will discuss.
Who Should Use it
Traders should use TradeKing. If you’re trading stocks, TradeKing is your cheapest option. Their software is easy to use and easy to get a hang of.
Fees
Trades cost $4.95 each, which is the cheapest I’ve seen. They have low price options, too, but I would recommend TradeMONSTER if you want to trade options. A flat fee of $4.95 a trade is excellent.
Pros
TradeKing has been voted to have the best customer service by Smart Money Magazine. If you’re tired of running into problems with little help, you won’t get this from TradeKing. You also get free access to their award-winning trade and research tools. You don’t need a minimum investment amount either. For a serious trader, TradeKing is my top choice.
Cons
If you’re not a trader, sign up with Sharebuilder instead. $4 for Tuesday trades is still better for those who aren’t timing their investments. TradeKing is meant for traders.
Sign Up
Click this link to sign up and find out more about why TradeKing is right for you.
TradeMONSTER
Who Should Use it
TradeMONSTER is best for options traders. Options are a more complicated investment, but if you’re confident in your skills with options, TradeMONSTER is the way to go.
Fees
See here for exact pricing. Options start at 50 cents per contract and go down from there the more you trade in a month.
Pros
Low fees for options is the greatest appeal of TradeMONSTER for me. They have powerful trading tools and free account transfers when you’re ready to start trading.
Cons
TradeMONSTER’s stock trading fees are less than Sharebuilder, but they are higher than TradeKing. I recommend them for options trading.
Sign Up
Get up to $250* when you transfer your account to tradeMONSTER! Trade Options $0.50* / contract, Stocks $7.50 per share. See why thousands of traders are making the switch to tradeMONSTER.
GoldandSilver.com
Maybe stocks and options aren’t your thing. If you want to buy precious metals such as gold and silver, GoldandSilver.com is the way to go.
Who Should Use it
Whether you’re exclusively planning to invest in gold and/or silver or you want to add it to your portfolio of other securities, GoldandSilver.com is affordable, safe, and secure.
Fees
There are no brokerage fees with GoldandSilver.com. Instead, you pay for shipping, handling, insurance, and a processing fee for payment methods other than bank wire transfers.
Pros
The gold is fairly priced according to current prices. There are also quantity discounts available. Shipping is secure. There is insurance on the order and a signature is required upon delivery. I highly recommend you or someone you trust sign for the package instead of leaving instructions for the carrier. Remember, they are essentially delivering your money. Don’t let anything to chance.
Cons
If you don’t want to hold onto the physical gold, you’re better off getting a Sharebuilder account and buying gold or silver ETFs. If you can safely hold on to your gold and silver, this is the way to purchase it. They do offer vaulting options that also allow you to keep your precious metals secure in another location.
Sign Up
Sign up for GoldSilver.com here to get started and buy precious metals.