You've put some money aside and are ready to invest, but it can easily be overwhelming when trying to choose your first broker and money account. During your first couple of years in investing, there may be mistakes along the way, including investments that you want to take back. Instead of blowing all of your money on fees, accounts, and transactions, you can invest wisely without going through all the savings. By reading through the following four considerations, you can help eliminate extra fees, go straight to investing, and get started on the right foot.
Commission Free ETFs
As you're looking for a broker account or investment bank, you can help eliminate fees and extra costs by signing up for a program that offers commission free ETFs. An ETF is an exchange-traded fund and they operate in a number of different markets. ETFs can rise and fall in value during the day and are purchased much like a stock. Instead of paying commission fees that are associated with stocks, a number of companies offer commission free ETF options. This allows you to dip into the world of investments without committing so much money to fees.
Once you have the ETF, it's important to pay attention to redemption fees. You may have to hold an ETF for a certain period of time before you can sell it off and cash it in. If you try to sell it too early, you may have to pay a redemption fee first. The range of days can be anywhere from 30 days to 120 days depending on the broker that you sign up for. Make sure you look at the fine print for redemption fees before purchasing the ETF. By following the guidelines, the money that you invest can actually go to the investment instead of any fees that you need to pay.
Zero Commission Stock Trading
Along with ETFs, it's important to look at a broker's other services. By pairing commission free ETFs with zero commission stock trading, you can increase the amount of your savings that goes into a stock instead of paying for fees. These savings can really add up. When you're first starting out in the world of stocks, it may be common to choose stocks and then change your mind or have regrets. By choosing zero commission stock trading, you can eliminate the extra fees and transition to the stocks that you actually want. You are no longer stuck with different stocks that you do not want or want to have to pay the fees for.
When starting any new account, it's a good idea to look into the account minimums that are available. If you are hesitant to invest all your savings into one account, then a low minimum can help get you started and really learn about the process involved. After a few months, you can easily add more money to the account and make any changes that are needed. When starting investments on your own, it's easy to add a little more at a time and slowly build up your portfolio. It's also a great way to control your money and leave it in personal accounts instead of the investment account.
Along with the account minimums, you should look into any new account charges. It's a good idea to find accounts with no fees for making a minimum deposit. This can help you save money and have more to invest at a later date.
By breaking down different aspects and really understanding fees or zero commission options, you can make the best choices for your savings. You took the time to save all that money, so it should go to the investments that you truly want instead of just wasted fees and charges.