You have many decisions to make when deciding on a brokerage account or robo advisor for online investing. Put your money in the right place by considering these factors before you select an online investing site.
What is the Account Minimum?
How much money do you need to have an account at a robo advisor
or brokerage? Some don’t have any requirements, while others may want you to have $500 or more before you can use their services.
How Much Do You Pay in Commissions?
The commission rates vary per brokerage and per the type of trades that you make. Typically, you pay for each trade, although some brokerages may offer pricing based on the number of shares being moved. Contract fees and purchase fees may apply to mutual funds and bonds. If you know what types of investments you want to make, then you can compare the associated commission cost between online investment sites.
Are There Other Fees Associated With Your Account?
You may have to pay other fees associated with your account. For example, the site may charge you for account maintenance, infrequent trading, transferring your funds, and expense ratios. If you’re uncertain about whether a fee applies to you, ask the brokerage prior to opening an account. The business should be willing to explain all of the charges that you pay.
What Do You Expect Out of an Online Investing Platform?
Some online investing services have plenty of bells and whistles, while others provide a basic experience. When you first get started with investing, all of the extras may not be relevant. If they’re going to cost more, look for a brokerage that focuses more on user-friendly features. Robo-advisors can be an excellent feature to guide your initial investing. They automate many parts of financial advising, which makes it possible to get those services as a price that’s far below the typical human advisor.
As you gain more experience with online investments, you can start to branch out into more advanced features if you prefer. In some cases, the online brokerage you initially choose ends up serving your needs in the long-term too.
Some good places to start include Ally Invest, Future Advisor, Personal Capital, Betterment and Wealthfront.