The traditional full service brokerage firms and the discount brokerage firms are the two types of firms prevailing in the market. The needs and abilities of the clients are the criteria that full service brokerage firms based their work and design upon. They offer different kinds of services for their clients like investment instruments, products, strategies and research facilities. They can charge a high flat or commission rate on their clients and there is a lingering perception that they are after profits over their clients’ gains.For people who also want to know something about home loans, debt consolidation or personal loan, you can check online.
This may be a factor why people opt to open discount brokerage accounts. With the multitudes of discount brokers popping up due to the Internet, the prices for buy and sell commissions have gone drastically down. In exchange for lower commission fees from discount brokerage accounts, you have to sacrifice and give up your investment tools such as charting, tax tool, financial advice services, transfer capability and quality research. There is no live broker that would give advice that is why only seasoned traders choose to open discount brokerage accounts.
If you don’t have enough knowledge on the market, it is better to pick the full-service option rather than opening a discount brokerage account. If you decide to pick a discount broker, then here are a few things that you can consider.
For one, you may open a discount brokerage account with TradeKing. TradeKing charges a flat fee of $4.95 per trade for trade of any types and 65 cents per option contract. There is no minimum amount required to open an account, and there are no hidden fees. Reviews and surveys give the company high grades on customer service and it is the first company to incorporate social networking in their website. They have a healthy trading community that discusses in their forum information about securities worth investing into.
Other individual investors open their discount brokerage account with Scottrade. Their minimum required deposit is $500 and charge $7 on online stock trades.
For low-cost trades, others prefer to open a discount brokerage account with OptionsHouse because it is hard to beat their flat fee of $3.95, and there is no account minimum. Though they are geared for options trading, they also have other offerings.
If you are after for the lowest possible cost, then you should open a discount brokerage account. Just as long as the chosen discount broker can service your needs then get their service.