Best Online Discount Brokerage Firms
Below is a list of the best online discount brokerage firms I've come across while doing research for opening my own personal investment accounts. These firms aren't listed in any particular order, and I can't say that any one firm is better than any of the others.
Choosing the right online discount broker really depends on your particular situation and how you intend to use your account. Day traders and buy-and-hold investors have different needs, and no one broker can cater perfectly to the needs of each.
So choose the firm that's right for you...
While we don't personally recommend making 25 or more trades per month within any brokerage account (much less a Roth IRA), we realize this is a strategy you might want to explore. If so, visit the Zecco website for more information on the actual pricing structure... It varies depending on your average balance and trading activity.
Read our full Zecco Roth IRA review >>>
However, if you're looking to trade options in your Roth IRA, then that's the specialty of OptionsXpress. Their commissions for options trading are notably lower than other online discount brokers, so you can benefit from lower transaction costs by using them if you're into options trading.
Outside of trading options, though, I can't recommend OptionsXpress...
Visit optionsXpress For More Information >>>
From what I hear, the customer service is excellent. However, TradeKing does charge a $50 termination fee if you close out or transfer your Roth IRA somewhere else, but this is a one-time fee which only applies if you move the entire balance of your account.
For instance, let's say you buy $25 dollars of Coca-Cola (KO) stock on a once-a-month basis. If Coca-Cola is trading at $50 per share, Sharebuilder would enable you to buy half a share per month.
This is great news if you have a small amount of money to invest. You can build a diversified portfolio without wasting the majority of your annual contribution on trading fees.
It's also great for dollar cost averaging...
But hopefully, you have so much money this won't effect you!
If so, SogoTrade's $3.00 equity trades are a bargain. Remember, cutting down on your transaction costs will have a substantially positive impact your Roth IRA returns. And $3 trades definitely cuts down the cost of trading...
I haven't personally used SogoTrade, so I can't comment in that respect. But from what I hear, most customers are satisfied with their experience...
Despite this shortcoming and the $500 minimum initial investment, Scottrade does offer a number of features you won't find on the websites of similarly priced competitors. Their trading tools and self-help products are more extensive and advanced than most, and their customer service department offers the advantage of local branch offices, where you can receive one-on-one human assistance if it's ever needed...
That's almost 24% of your annual Roth IRA contribution limit!
Even though eTrade offers free automatic reinvestment of dividends, their high trading commissions relative to their peers make them a less attractive Roth IRA alternative in my mind...
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