Things To Consider Before Selecting An Online Broker

Today, most of the stock transactions are being conducted online. It has become very important to select a good online broker, based on specific investment needs and preferences. The number of companies offering online brokerage services has increased over the years, making it very difficult to select the best online broker. Listed below are some of the features of online brokers that you need to consider before selecting one:

Complimentary services

If you are new to stock investments, opt for an online broker that offers complimentary services, such as free investment tips, investment-planning software and the latest sock quotes. These services will help you to understand the basics of stock investments. Once you become familiar with the intricacies involved, you can start taking stock investment decisions independently. You also need to assess the speed of the online brokerage websites, especially during the peak hours, to check how long it takes to load a web page and process a transaction. In this way, you can ensure that the site is free from technical problems.

Additional services

If you have other priorities and cannot remain online for long, you need to look for a online broking site that offers additional services, like touch-tone telephone trades, faxing orders and direct order services over a regular phone line. These services are often offered for a fee and it is necessary to go through the service rates and terms and conditions of the different websites, to select the most cost effective online broker. You also need to research on the track records of online brokers to check the quality of services rendered by them.

Commission rates

In order to attract new customers, many online brokers offer low commission rates, often below the prevailing market rates. You need to be careful while selecting such brokers, as the low commission rates do not indicate the quality of services. These brokers may advertise low rates for all services, but the fine print later reveals that only a limited number of services are covered, most of which you are unlikely to use. Always remember to read the terms and conditions before selecting an online brokerage firm.

Security deposit

The amount of security deposit should also be considered, before selecting an online broker. Some charge as high as ten thousand dollars. High security deposits may not necessarily indicate the quality of services offered by the online brokerage firm.

Customer services

Another thing to consider is the response graph of the online brokerage firms. Prior to opening an account with an online broker, you should call the company’s help desk and ask a ‘test’ question to check how long it takes to resolve your query. For example, you could enquire about the interest rates offered by the company on the cash balance in your online broking account. You could e-mail your queries or chat online, to assess the quality of customer service offered by the company.

All these will help you in selecting the most appropriate online broker and the most cost effective services. The online broker takes care of all your transaction requirements, allowing you to concentrate more on selecting the right kind investment options, to maximize your returns.