Choosing an online stock broker no doubt has its benefits. A brokerage firm tends to offer attractive perks such as low account minimums and low or commission-free transactions for certain securities. 

But finding a suitable broker that can meet your specific needs can be overwhelming, to say the least. So what should you look out for? Keep reading to find out all the things you need to consider before choosing an online stock broker.

1. Identify Your Needs

While it may sound obvious, knowing yourself well is crucial in determining which brokerage firm can offer you what you need. To help you decide, you may want to consider the amount of investment experience you have. 

Try looking for brokers that offer educational resources and guides that fit your current level of investment knowledge. Having accessibility to support staff and practice trades is also recommended if you’re new to investing. 

On the other hand, seasoned investors may seek more elaborate charting functions, conditional order options, and more trading instruments to choose from. 

Besides your level of experience, knowing how hands-on you intend to be and the type of security you want to focus on are also useful in helping you make your final decision. 

2. Consider the Fees

It goes without saying that understanding the fees involved when engaging a brokerage firm’s services is an important step. 

Typically, brokerage firms may charge you a fee to open an account and when you transfer investments or cash out. You will also be charged a fee if you choose to close your account. 

Other fees may include annual maintenance fees, inactivity fees, subscriptions to trading platforms, and additional charges for research and data. 

However, it’s possible to minimize these fees by choosing a brokerage firm that waives them completely or by opting out of any extra services. 

Another type of fee to look out for is commission fees you pay when making any securities transactions. Some brokerage firms determine commission fees based on your account size, while others will reduce the fees if you trade a certain volume every quarter. 

Granted, most online brokers provide zero commission trading for stocks and ETFs, but you may still have to pay commissions if you buy or sell options. Hence, it is useful to identify what securities you’d like to focus on right from the get-go. 

3. Platform Test Runs

The quickest way to judge whether a trading platform is up to par is by giving it a test run. Some brokerage firms allow you to open a demo account or a real account for free. 

Make use of these accounts to play around with the platform’s tools to get a good idea of the platform’s features and functions. Go through each step and familiarise yourself with the process of making a trade. 

Browse the different quotes for the available securities and analyze the data that the platform offers. If you can, try looking for specific investments using the filters provided so you can easily find the investments that match your requirements.

Note if it’s easy or fairly difficult to navigate around the platform. A good trading platform is versatile and intuitive. You can access it on any device, and you won’t have any trouble locating buttons that will bring you to pages with the info that you need. 

4. Withdrawal & Deposit Methods

If you’re investing to have an additional source of income, you would need to know the ins and outs of how withdrawal and deposits work for your chosen brokerage firm. 

Explore the options you are given to deposit funds and consider how long it would take for your funds to settle. 

Similarly, you should check how long it takes for the funds you acquire from investment sales to settle and how soon you can use them for investment or withdrawal. 

Make sure that your preferred mode of withdrawing and depositing funds is available before you decide if a particular online stock broker is for you.  

5. Check for Tools & Educational Resources

Besides trading services, a good brokerage firm should also offer educational resources and tools to help traders with unfamiliar terms or metrics. 

This is especially useful for those who are new to trading as you would need an efficient way to get advice and answers. While you’re conducting the test run, you should also test the platform’s search tool to see if the results are satisfactory. 

A reliable online stock broker would offer educational content from trusted sources. These may include videos, articles, forums, or even podcasts that discuss a wide range of topics in detail. 

Speaking of educational resources, we have a FREE eBook on Forex Trading that you may find incredibly useful. 

But if you’re looking to accelerate your learning process, we invite you to join Just2Trade’s Forex Academy, where you’ll meet experts ready to give you a leg-up on your investment journey.