How to choose an online broker

Opening an account with an online broker and managing your portfolio in that account is a bit like marriage. It’s a relationship that might last many years or it can end in divorce pretty soon. If you do your research before you say “yes”, you might save yourself a lot of trouble and financial losses.

Our Top 10 Tips To Find The Best Online Broker

1. Customer service: this activity requires responsive and helpful representatives. It’s not acceptable to hold the line for 15 minutes before your questions are answered or wait hours for e-mail feedback. We recommend you to test the service before making a final choice.

2. Minimal amount to open an account: the minimal amount may be minimal for some investors but maybe not for others; this minimum can go up even to $10,000 which is not affordable for all traders.

3. Price: it does matter but isn’t everything (always keep in mind that you will get what you pay for). It depends on your activity, strategy and the diversity of your portfolio. You must choose the service which fits best in fees per trade, fees for broker-assisted trade etc.

4. Fees: you must be very careful to take all costs into consideration because it can be quite significant if you use many of the services or do not calculate with regular, monthly fees when try to avoid big one-off payments at the beginning or choosing cheap trading fees and pay more in other services which can be paper statement fee, monthly fee, annual fee, maintenance fee, inactivity fee, money transfer fee out of the accounts, other fees for services (real time quotes for for a lifetime, monthly charges, only delayed information is available) etc.

5. Technical background: availability and reliability during peak hours are key issues. If you have to act quickly, a slow website or a server downtime can cause you big losses. There must be guarantees and a real physical enterprise behind the broker to avoid these situations, offering you a replacement service via phone, chat or other ways of communication.

6. Products: you must be aware what the online broker can offer. If you want to trade U.S. and international stocks, bonds, funds, ETFs, options, forex, you must check the availability of these products.

7. Market intelligence: information is critical. The reports, research tools, news, portfolio monitoring tools offered by the sites can be good sources for trading strategies and in decision making and might generate a big increase in your profits if used well.

8. Education: for novice traders, guidelines and trainings are essential at the beginning and also advanced investors should find useful information. Online brokers usually offer education and it’s the best to choose the sites that can broaden your knowledge and help you to the next level.

9. Margin rates and interest: time is money, so if you want to trade on margin, the difference in the rates can sum up big savings in the long run.

10. Extras: do not decide on a $100 bonus exclusively! These signup bonuses can be tempting but a little higher trading fee can completely outbalance this advantage.