Procedures to choose the best discount broker

Procedures to choose the best discount broker

Of late discount brokers have evolved in popularity as investors feel that their regular brokers have not given them their due returns. The discount stock brokers in India are aware of the paradigm shift, and by market campaigns have gone on to increase the level of awareness. With the number of discount brokers or even firms increasing in number it can really be difficult to decide which is a proper discount brokerage firm for your needs. Let us follow a series of tips on how to choose the right discount broker for your needs

Cost

This seems to be the main criteria? What would be the total cost of the trade involved? For a small investor cost is a really important criterion as they work on the dollar average cost. In case if you trade around $ 400 per month and need to pay $ 30 as commission this works out to be a huge amount. The rule to be followed is that the commissions should not be more than 1% of the total trade amount. The first point of consideration is that you should compare a schedule of the fees and figure out hidden fees, as see to it that the investment plan is reasonable or not.

Minimum requirements

Most of the brokers end up showcasing a lot rate of interest, but in reality you need a huge amount of money to qualify for those investments. Sometimes it might be necessary that you need to be making a certain amount of trades in every quarter. Just check out the minimum requirements and see whether you end up qualifying for them.

Customer service

When you are choosing a discount broker you end up availing $ 10 in free trades and if you are undertaking trade via their online platform. On a periodical basis you might have to get in touch with the customer service department. Do take some time and figure out what the other investors think about the customer care department of the company as this can be done by a careful analysis of the social media channels.

Variety

What is the type of investments that a discount broker provides? There could be bonds or even mutual funds available? When you are about to choose a discount broker this is an important point of consideration. Though at presently you might be interested in ETFs but in the later stages you might consider the option of bonds. Clearly figure out the various types of investments that are available with a discount broker and the associated costs with them.

To conclude, would your discount broker be providing you with research tools or analytical opinions? Though this might not be a critical requirement, but some investors feel that this is a value based service. Check out with the brokers whether these tools are available and whether they are demos available for the same, as most of them would not mind in providing a trial of their tools for free.

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