One of the reasons discount brokers are so popular is the low fees and other costs. However, low-cost or free trades aren’t the only thing to consider when choosing a discount broker. Some of the other factors to look at include:
- Tools: Different brokers offer different tools. Look for stock screeners, real-time streaming quotes, charting, and other tools that can help you make better decisions.
- Add-ons: If you want some help in other areas of your finances, consider looking for a discount broker that offers add-ons. Those can be worth the cost if you just want some one-off help.
- Expense ratios on funds: If you plan to invest in mutual funds and ETFs, pay attention to the expense ratios on the funds offered by the discount broker. Higher expense ratios can cost you in the long run.
- Dividend reinvestment: Consider whether any earned dividends can be reinvested automatically and without paying a transaction fee.
- Fractional shares: Can you buy portions of a share? If so, this can help you build your portfolio a little bit faster.
- Other services: Some discount brokers offer access to banking services as part of their offerings. If you want other services, look for a broker that offers them.
- Education: How extensive are articles on the website that teaches about investing? Can you learn enough to make better portfolio decisions?
- Customer service: If you’re interested in access to good customer service, look for a broker that offers choices, including online chat, email support, extensive FAQs, or even phone support.