Investing for the first time? 5 tips for finding the right brokerage account

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Here’s how to find the right place for your money.

Key points

  • New data reveals that 9% of Americans have started investing for the first time.
  • It’s important to find a brokerage account that meets your needs and doesn’t charge excessive fees.

The money you have set aside for emergency expenses should be deposited in a savings account. This way you won’t have to worry about losing any of your principal (unless you go in and take a withdrawal).

But if you have money that you don’t need for your emergency fund and you don’t expect to use it for several years, then investing it is a good bet. You will have a chance to turn this money into a bigger sum.

In a recent Fidelity survey, 9% of Americans started investing for the first time in the past two years. If you’re preparing to do the same, finding the right brokerage account is important. Here are five tips to guide you in this regard.

1. Avoid fees for making transactions

As an investor, you should feel comfortable buying and selling stocks whenever you want or when market conditions dictate. And you shouldn’t have to pay a fee every time you buy or sell a stock – so find a brokerage account that won’t charge one. These days, there are many options for marking trades without commission.

2. Find a brokerage that does not require a minimum balance

You may only have a few hundred dollars to start investing. And guess what? It’s more than enough. While some brokerage accounts impose account minimums, many do not. It is advantageous to opt for an account that you can open with all the funds you have with the aim of adding to it over time.

3. Don’t get charged for inactivity

Some brokerage accounts charge you a fee when you do not trade for an extended period of time. This isn’t something you want, so aim for an account that doesn’t charge inactivity fees.

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4. Opt for the fractional purchase option

Fractional shares allow you to invest in companies even if you cannot afford a full share of their shares. This option opens the door to many more investment options, so it’s a good idea to find a brokerage account that offers fractional shares. This way, if you have $300 to invest and are interested in owning shares of a company whose shares are trading at $600 per share, this option will not be ruled out. Instead, you can invest your $300 in this company and buy half a share.

5. Find a broker that lets you buy crypto if it’s an investment you’re interested in

Cryptocurrency is not for everyone, and there are definitely risks to buying it that you will need to consider and accept. But if you want to add digital currencies to your investment portfolio, it will be useful for you to find a brokerage account that offers the possibility of trading cryptos. This way you can have all your investments in one place.

The sooner you start investing, the sooner you can start building your long-term wealth. Use these tips to find the right investment account and grow your money.

Using the wrong broker could cost you dearly

In the long term, there is no better way to grow your wealth than investing in the stock market. But using the wrong broker could significantly hurt your investment returns. Our experts have classified and examined the best online stock brokers – simply Click here to see the results and learn how to take advantage of the free trades and cash bonuses offered by our top rated brokers.

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