Stock broker selecting is important task when starting investing. Cost is also a factor but that should not be your only or not even most important factor. With bad service you could easily lose what you saved in fees. Example of this could be outage of access to trading platform. Things to consider in selecting are:
Respectability of the broker
Has operation been running for over 5 to 10 years? Newer platforms could suffer more problems and also actual service quality of the broker usually improves over time. New and agile brokers can be of course good also but user experience over many years means a lot.
Overall user experience and available tools
Brokers can offer many trading platforms for user to select and usually these things are more or less in order with all brokers. Additional tools for reading reports and also customizing reporting. Tax reporting tools are most important because doing taxes can take a lot of time suitable report on yearly results can not be printed from the system without doing “excel exercises” when combining data from multiple reports. And it helps a lot if reporting can be tailored to ones needs as requirements differ between country of residence.
Costs are factor but online trading is very cost efficient nowadays. Trade cost can be under dollar per trade. Depending on type of service, there can be different fee classes(tiers) when cost depends on trade volume you make. When starting investing, only the first tier(with highest cost) is important when comparing brokers. In addition to trading costs, there can be fixed cost per month or per year basis. To give idea of how to compare cost take for example two to five trades of $ 1000 each month to calculate estimate yearly costs with fixed costs. With Buy&Hold strategy trades are limited but it great to be able to invest dividends straight back to market with minimum costs.
Your starting cash position
Brokers can require minimum amount of money you need to have to invest to be eligible to apply as client. Some might not have minimum at all.
Margin account possibility and cost
If you want to leverage trading and boost returns with margin loan, related costs and rules should be compared. Check maximum margin leverage and costs.
Commission: $0.005 per share; minimum $1 and maximum 0.5% of trade value Account minimum: $10,000 ($5,000 for IRAs) Special terms for younger traders: Lower minimum activity and balance requirements for clients 25 and younger Margin account possible with loan cost depending on the position size( 1.5%+ benchmark rate for loans under $100k) $10/month fee minimum( covers trading value to that amount. about ten free trades per month are covered)
Robinhood Free trading app for that’s perfect for beginners looking for a no-frills tool for buying stocks. Commission: $0 per trade (yes totally free) Account minimum: $0 No desktop version available No margin account
Merrill Edge Low commissions and 30 commission-free trades per month with $25,000 cash balance. See our Commission: $6.95 per trade (over the free quota) Account minimum: $0 Promotion: Up to $600 cash bonus Margin for loan under $25k(Base +3.375% ) and $25k to $100k (Base +2.250)
There are much more examples than these. Find out what suits youy. My selection was Interactive Brokers because good margin deal, trading costs and respected NYSE listed service provider.