Tips on how to pick an online broker

Since the advent of the internet, online stock trading has taken off as one of big benefits of a networked world.  Now anybody with an internet connection from anywhere in the world can buy and sell stocks on the US market.  Because of the new industry, many firms have rushed to provide this service to clients.  Below is a quick comparison between the biggest online brokers and the costs/benefits of each one:

As you can see from the above table you get what you pay for.  The questions you need to ask yourself before picking an online broker are:

• How much money am I going to put into this account?   The more you put in, say over 50K, we would recommend using one of the bigger firms such as Schwab.  If you are investing less than 10K, go with Ameritrade, Harris, or Scotttrade.  Make sure you
• What kind of investments am I going to pick? If you are sticking to mutual funds, etrade has a great site and you may want to go with the bigger companies such as fidelity since they will offer more options.
• If you are going to pick your own stocks or buy ETF's, and not rely on research, then go with a smaller firm like Ameritrade which will save you a lot on commission rates.  ($10.99 vs. $37.95) really ads up on a 5K IRA account
• How much customer service do you need.  These companies all provide good customer service, but the bigger ones will give you better service since you are paying more commissions to them

At the end of the day, you should research your options carefully since choosing the wrong firm and getting hit with surprise fees is never fun.  Then also having to move your money to another firm is a real hassle you should avoid by picking the right firm the first time.  Good luck!