OptionsHouse Review

Best Online Broker Investment Account for Small Investors


Best brokerage firm for small investor in 2014. Top discount online broker for small account balance for low cost investing (trading) in stocks, mutual funds, ETFs, options, and bonds.



Best Brokerage Firm for Small Investor


Optionshouse is the best discount online brokerage firm for small investors in 2014 (small account balance) since there is no minimum deposit requirement, no hidden fees, and no penalties for having low balance, or not making any trades. Prospective customers can open cash account with just $1,000. The firm also offers extremely low cost pricing: $4.75 per stock or ETF trade, and $10 per mutual fund trade. Compare it to big brokerage houses: $10 for stocks and $50 for mutual fund trades at TD Ameritrade, $9 and $76 per trade respectively at Charles Schwab, $8 and $75 per trade respectively at Fidelity Investments.

It's extremely important to get the best pricing for small account balance since high commissions will take a huge bite out of your account. For example, let's say account balance is $1,000 and an investor decides to buy a mutual fund. If the cost of transaction is $76 (as it is at Fidelity) it means that investors will spend 7.6% of their portfolio just on that one transaction! It's a huge expense! Compare it to $10 per mutual fund transaction at Optionshouse or just 1% of a small account balance.

Some online brokers charge inactivity fees: the fee is imposed when a customer does not make a specified amount of trades during a month (Interactive Brokers), or a year (TradeKing). If you are a small investor, it is likely that you will not be making a lot of trades, because active trading will just eat away your money. Thankfully, Optionshouse doesn't charge inactivity fees.

There are also companies that impose special fees that could destroy a small account investor - Low Balance Fees. These fees are charged if client has account balance lower than required by a brokerage house (Interactive Brokers), or it could be charged if the amount invested in a mutual fund is too low (Fidelity Investments, Vanguard). Optionshouse does not charge any above mentioned fees.

Because there are no IRA setup, termination, or maintenance (also called "annual IRA") fees, Optionshouse is also one of the Best Brokers for IRA.

Read full Optionshouse Review.


Best Brokerage for Small Investor: Commissions


InvestmentsCommissions
Stocks and ETFs $4.75
Stocks and ETFs broker assisted $4.75
Options
Plan 1. Up to five contracts for $5; each additional contract $1
Plan 2. $8.50 + 0.15/contract (great if trading over 10 contracts)
Spreads
Plan 1. Up to 10 contracts for $10; each additional contract $1
Plan 2. $12.50 + 0.15/contract
Mutual funds $9.95
U.S. Treasury bonds and listed corporate bondsOrders are accepted by phone

Investments stocks, options, mutual funds, bonds, ETFs
Optionshouse minimum deposit to open account $1,000 for cash account, $2,000 for margin account
FeesOptionshouse fees


Advantages of the Best Online Broker for Small Account

  • Low commissions
  • Free streaming quotes
  • No fee IRA accounts
  • No volume requirements, or maintenance or inactivity fees
  • Free check-writing privileges
  • Free DRIPs/Dividend Reinvestment (complete, non-fractional shares only)
  • Very low margin rates
  • Free virtual trading


Open Optionshouse Account and Get 150 Free Trades:



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This article was updated on 11/5/2014.


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