How to Rate Online Brokerages

There are a lot of online brokerages that you can choose from. However comparing and rating each online brokerage firm can be challenging. Each online brokerage offers a different level of products and services. Make sure you only pay for the services and features that you will be using.

Difficulty: Moderate

Instructions

Instructions On Rating Online Brokerages

1. Compare the commissions charged by each online brokerage firm. See how much you have to trade in order to get the best commission rates. Also check to to see if the lowest rates are only good for a period of time.

2. Decide how much research you will need or if you can do your investment research on your own. Many online brokerage firms offer different levels of research and advice. The more research you will need the higher commissions you can expect to pay.

3. Look at the all the different products each online brokerage firm offers. Some will have more variety and other will specialize in a certain area such as option trading. Look for a firm which will have the best selection of products you will be investing in.

4. Examine the level of customer service each firm has. Are you able to reach someone on the phone when you need assistance? Do they respond promptly to email questions? Decide on the acceptable level of customer service you will need.

5. Look at the banking services each online brokerage offers. Many online brokerage firms will offer banking services such as credit card and ATM cards. Of course these services comes with an additional cost so determine if you need these services and are willing to pay for it.

Tips & Warnings

• Most people look only at the commissions charged by each online brokerage firm. However most firms have very competitive commission rates, so don't look at just the commission when rating each firm. Look at all the services, products and level of customer service before deciding on an online brokerage firm.
• Some commission rates are only low for a promotional period, or only if you trade a large amount. Look at the fine print when examing the commission schedule.