Tips on Choosing an Online Broker

By: BankingMyWay.com Staff

By BankingMyWay.com Staff

Nowadays, you can do virtually anything online .  You can go to school, reconnect with long lost family members, plan a vacation and even manage your entire investment portfolio without ever meeting a broker face-to-face.

For some people, the idea of having an online broker is exciting. For others, it can be a daunting task to undertake, and one that is a little too impersonal. However, if you’re interested in trying online brokerage, here are some things to consider when choosing a service for your investments:

Customer Service

Hands down, reliable customer service is the most important feature for beginning and novice investors. You might consider actually setting up your account over the phone (instead of online ) so you can get a feel for how well the customer service representative responds to your questions and concerns. If the representative doesn’t seem knowledgeable or takes 30 minutes to answer your call, you might consider another company.

Also, discount brokers like Scottrade are designed to help you make fast, cheap trades, but they don’t offer full-service support. You won’t get the same type of research, advice, retirement planning and tax tips on this site as you would with say, Merrill Lynch or even Charles Schwab. Of course, full-service comes at a price, so you have to decide which brokerage style is better suited for your investing needs and budget.

Product Line

The diversity of products offered is often a concern for investors looking to create well-rounded online portfolios. Further, some investments are easier to understand online than others. CDs. money market accounts and even simple stock trades can be acquired and managed with just a few clicks on sites like ING Direct (Stock Quote: ING ), Sharebuilder, Scottrade and Fidelity. However, many sites don’t offer products like mutual funds, so be sure to verify that any online broker you use offers everything you actually want.

Extras

Although a $100 bonus is a very attractive incentive to open an online account, be sure you review minimum deposit amounts required and annual fees before making any commitment. Withdrawal penalties. high trade fees and transfer fees could quickly eat up that money you just earned!

Availability

The advantage of using online brokerage accounts is that you have real-time access to trades and market information. However, if the site you use is constantly down or being repaired, you could miss out on valuable trading time. Before you sign up, be sure to check the site for functionality and speed at several different times of day and night.

In the end, no matter which online broker you choose. you should always have outside resource links on hand to help you make educated decisions about your investments. BankingMyWay.com offers online investment calculators that compare national, regional and local rates on financial products to help you get the best deal. You can also conduct research on a variety of financial products, including money market funds. retirement accounts, mortgages, savings accounts and more.