I have seen the question in various places including forums, lots of people asking about online trading account. Most of them are not aware about the formalities of opening the same as well as the features they have to look before applying for one. Some of the points I have mentioned in this article is different with place to place but some of them are common in all place. Here is an article reveling about the points you have to look into when planning to open an online trading account.
Selecting an online trading account has same importance of selecting a stock or any investments. This is due to the time you are keeping the investment instruments with your account. For a long term investor, he will always buy stocks in the right time with an intention to hold the same for more than 10 years. In such time, trading account is very important to keep his stocks alive as well as providing proper information and advices.
The best way to identify a good broker to open an online account is contacting various brokers in your city and collect and write down necessary information on the below mentioned areas to compare. This will help you to judge yourself which is the best firm to start your account with.
Below are the major areas you should take care of in the sense of service and facilities. account.
1. Charges – Charges including initial account opening charges, annual maintenance fees, purchase and selling brokerages, transaction charges if any as separate, charges for transferring securities to third party account etc… Take care of the possible charges that can slap on you in case inactivity of the account for long time.
2. Linking facilities – Confirm the bank account linking facilities providing by the broker. Some brokers especially banks and financial institutions allow customers to open an account with there bank or institution to link with the trading account. Some other brokers might have links with various banks and customers who hold an account with those banks will have the facility to connect his bank account with this online trading account to transact money to and from online account. Remember, this is different upon place to place.
3. Trading Facilities – Identify the stock exchanges connected to this online trading account to purchase securities from. Also, it is a must to know the account features to buy other investment instruments like mutual funds, commodities, bonds etc… through online. An account with maximum connected exchanges to trade as well as capability to buy maximum investment instruments online will be a better option.
4. Service availability – Identify what are the other services available with this online account such as off-line order processing, posting order other than the stock trading time, speed of the portal when using a low speed internet link etc…
5. Customer care quality – Always remember to open an online account with a broker firm who providing excellent customer care. Trading involved lots of errors for beginners and they need to contact the customer care time to time to report and solve errors or getting idea about features of the accounts. Quality and timely service is a considerable requirement to select a firm and open an account with them.
6. Information database – You should ask and confirm the possible information availability. This is including the research reports, real time company news, company performance reports etc.
Above mentioned are the major areas your eyes should reach prior to select a firm to open a trading account. You can visit the company website to get most of the information as well as contacting the customer care to get the other required information. Contacting the customer care directly or through phone will give you an idea about the customer care quality of the broker firm.
1. Remember to open an account with a firm that is not involved with scandals or huge customer complaints
2. Find out how trustworthy the broker is. Always select a well reputed and approved firm to start the account
3. Visit the website of the broker if possible. A web site is a good source to know more about the broker.
4. Always read the rules and regulation properly. This will help you to avoid mistakes or doubts on any points such as termination of accounts etc.
Once you are collecting and analyzing data from multiple brokers prior to open an account, there is a possibility to negotiate a deal with your selected broker to get possible discounts to open an account with them. Due to high competitions in this area, you are supposed to receive such discounts easily. To tackle the people, you now have enough knowledge on the services or charges from various companies and that knowledge can use to negotiate your deal.