Where should you open your trading account?

Ask these 5 questions when you're choosing a company to work with.

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Key takeaways

  • Why pay for trading if you don't have to? There are account options that charge $0 commissions for stock trades and have $0 account fees.
  • Check whether trading firms make it easy to get set up and started, but also have tools to help you keep improving your trading over time.
  • Consider a company that's strong and established enough to weather any market storms, so you don't have to worry about services being interrupted.
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Choosing a solid firm to trade with can make or break your strategy. You need a trading firm that will get out of your way and let you execute on your ideas—not hold you back with fees, hidden costs, or a lack of investment availability.

But you also want a company you can count on. Sometimes, markets get weird. You want a company that's strong enough to keep delivering on the trading services you need, even if something totally unexpected happens in the world.

With so many potential options to choose from, here are 5 questions to ask as you're deciding where to open your trading account.

1. Do you have to pay any fees?

Let's start with the easy stuff: Why pay for trading if you don't have to?

At Fidelity, for example, you pay $0 commissions when trading US stocks, exchange-traded funds (ETFs), and options online, and $0 account fees for brokerage accounts, i.e., the typical type of taxable account that's commonly used for trading.1 (Read more about our fee structure.)

In addition to the obvious fees, be sure to check for expenses that can be harder to spot. If you might be investing in funds, for example, consider expense ratios, which are taken out of your investment on an ongoing basis. Fidelity offers index mutual funds with zero expense ratios.2 And some trading firms earn extra money by sending your orders to certain specific trading partners (it's called "payment for order flow") which has the potential to eat into your trading return.

The lower your fees, commissions, and other costs, the more money you have actually invested and working for you. And that's the whole point, right?

2. Can you get started without a lot of money?

You need a trading firm that can help real-life you, today, not your imaginary future self who already owns a yacht.

That's why you should consider checking whether there are any minimums for opening a trading account. At Fidelity, for example, there are zero minimums for opening or maintaining an account.

Remember also that there can be minimums for some investment options. With many trading firms, if you're buying stocks or ETFs, the minimum amount you can invest in is one share. However, Fidelity offers fractional shares, letting you invest with literally as little as $1. And unlike some trading firms that offer fractional shares only on a limited list of investments, at Fidelity you can buy fractional shares of more than 7,000 US stocks and ETFs. (Learn more about how fractional shares work and trading Stocks by the Slice™ with Fidelity.)

3. Is it easy to get up and running?

Placing a trade shouldn't be any more complicated than other purchases you make online. Consider whether a company's trading app makes the experience seamless and easy to navigate.

At Fidelity, we recently redesigned our trading app so that it's simpler and faster for you to get the information you need and place trades when you want to. We also added in-app help if you ever need it, so you don't have to go to "trading school" if you don't want to.

4. Are there tools if you want to dig deeper?

Maybe you already have your own trusted sources for insights and analysis on investments. But it never hurts to keep your ear to the ground, so you know what the rest of the market is saying. When you're evaluating trading firms, check what kinds of intelligence they offer.

For example, if you're looking for a quick pulse on a stock, the equity summary score available through Fidelity can tell you whether or not the experts think that the stock you're considering is worth buying. Our Social Sentiment score can tell you how the Twitterverse (and more) is feeling about a stock. And if you want to go even deeper, we have research, tools, and more that can help.

The market is always innovating, and to survive and succeed, traders often have to adapt too. So consider whether your trading company offers opportunities to keep upping your game. At Fidelity, we have a wide selection of quick-hit and in-depth videos, articles, and podcasts from industry experts and professionals on investing ideas and strategies. Whether you want instant answers or weekly classes—on your time or in real time—we're here to help you keep learning.

5. Are services backed by a solid company?

When it comes to handling your money, the last thing you want is a rookie. Consider whether a given company is financially stable, has survived through scary markets and lived to tell the tale, and has a proven track record of being able to continue to fill customers' orders even when the market's having a fit.

Think about whether it has the resources to answer your questions or handle more complex requests, should you ever have them. And check what objective experts say about its capabilities, like whether it's ranked well in the industry. (Humblebrag alert: Our trophy cupboard of awards has been getting a bit crowded lately.)

Ultimately, when choosing where to open your account, you may not even have to compromise. You may be able to find a choice that offers low costs and great service, and that can meet the needs you have today—but also the ones you may have tomorrow.

Next steps to consider

How to open an account

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Find stocks

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More investing ideas

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