Choosing an online stock broker that meets your expectation, checks every box, and aligns perfectly with your investing goals, is a very challenging task and it can be quite intimidating. This guide will tell you about things you should take into account before making a final decision when choosing an online stockbroker.
Know what you need
Before you look into stockbrokers, you have to know what kind of an investor you are. Ask yourself questions like what are your goals? Are you an active type or more passive? Which stocks interest you the most? What services are you looking to find in a broker? Questions like these can help you immensely when you start your search, just be sure you answer with a clear perspective in mind, because every broker has something different to offer and it might not be what you are looking for.
Narrow the search
When you are positive that you know exactly what you want from your broker, go through the list of various brokers, look at the options they provide, see which features are the most important to you, and narrow down the choices available to you. Do a little homework, check out the options in order to see which ones fit all criteria; read user reviews, confirm their legitimacy, make sure there is a guarantee against any kind of fraud, and match these requirements to narrow down the choices to make the decision easier for you.
Work out the fees
Now that you have a shortened list of online stock brokers, you have to figure out how much are you prepared to pay to your broker. Work out the fee of various brokers providing the same kind of features and services. If you are sure that the features the broker is providing and the type of investment you are making complement each other, you might be pleased with the commission they are demanding. In case you feel like the commission is so high you may be left with nothing after the investment, rethink your choice.
Effortless deposit and withdrawal of your funds
The deposits and withdrawals made on your brokerage account should be user-friendly and you have to know the minimum amount you need to make a deposit. Find the information about which card option does the broker offer for your account (ATM or debit), when can the amount be drawn, how hard is it to make a deposit, what requirements are there, etc. You can get these answers from the broker, and find the best option for your needs and conditions.
Is the broker offering education?
This is especially critical if you are new to the world of online trading; you have to be familiar with the market before you jump in.Your broker should be able to provide education material (online courses, tutorials, e-books) so that you can get a firm grip on the topic before you dive deeper. The material usually covers different levels of expertise, so in case you are already an experienced trader, you can still find useful resources and educate yourself even further.
By this step, your options should be narrowed down to one, maybe two choices, and it is time you look into the customer service of the finalist. Find out how fast and easy is it to contact them, are their services effective for your problems, how do they communicate with you (email, phone, etc.), and when are they available.
It is very tempting to just register for the brokerage that has the shiniest and biggest ad campaign but if you are thinking of making trading a long-term thing, the steps above should not be skipped; do not just blindly set up an account and move on, take some time, use all the research and education available with trading broker, slowly outline your investment strategy, and do not be shy with using the tools that are at your disposal.