Brokers
This is an e-mail I wrote to my Auntie P when she asked me about what broker I use . . .
I had been using Vanguard which charged $20 per trade, but I thought that was pretty reasonable. Then they wanted to start charging a yearly fee plus increase the per trade costs so I went elsewhere. I considered E-Trade and Ameritrade, then tried Muriel Siebert but I wound up with Scottrade (Siebert's web site didn't work through my work's firewall so I would have to pay extra to make phone trades or limit orders). They have very good customer satisfaction reviews (they always talk about winning the J.D. Power award four years in a row or whatever) and they are also really cheap. Online market orders are $7 and limit orders are $12. They also have local offices though I've never been. They don't have minimum balances or fees for closing out your account. I've had them for about 9 months.
The only thing I don't like is how you get money in or out of your account. They have an e-check option where you can kind of make out a check to them online to fund your account and it shows up as a regular check drawn on your bank account (you have to use a real check number and then tear up that check at home so you don't use the number twice; you could also just mail them a real check). To get money out you call them and they mail you a check. I don't know why they don't let you just do an electronic transfer directly from or into your checking account.
Also they don't have a lot of research that you can do online. It's very basic and very do-it-yourself. It's good for dilly-dallying like you said. I think I have maybe 5 stocks or so. Most of my money is still in mutual funds directly with Vanguard, Fidelity, and Janus.
If you want to go with Scottrade I can do a refer-a-friend thing and get 3 free trades, but it's not a big deal if you go that route or not. The trades are so cheap anyway that 3 free trades doesn't amount to much. I'll send you a thing and you can use it or not. You can try it if you want and if you don't like it or want to use someone else it doesn't cost anything to transfer stocks out of the account and close the account down. Some other places charge a fee to close your account or transfer stocks to other brokerages.
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Comments (1)
re: "you have to use a real check number and then tear up that check at home so you don't use the number twice"
You don't really have to tear up the check. Your bank won't care if a check goes through with the same number. Quicken won't either, although it will say "you ok with that?"
E-Trade gives you a check book to get money out. They make it real easy to get money in through direct debit. I've also had success using finance.yahoo.com's free money transfer service powered by Cash-Edge to move money from ETrade to Wachovia. You may want to try that.
Posted by Bruthu Jeb | November 19, 2003 11:15 PM