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1. Locate the most recent fee schedule from the company. Most online brokers will post their fee schedule on line. You can also contact customer service and request a copy, or request a copy by mail. If you still have your original member information, it will contain a copy of the fee schedule. A mutual fund will post any applicable fees in the fund prospectus.Keep in mind that fees can change. The fee schedule in place when you became a client may not be the current fee schedule. Additionally, your client status related to the broker may have changed, also affecting the applicable fee schedule.
2. Decide the type(s) of investment(s) you will be making. Investments types include, but are not limited to, stocks, options, bonds, and mutual funds. Fees for stock trades may also vary depending on whether the stock trades on an exchange or over-the-counter (OTC). Your broker can provide you further details about the different markets for stocks.Stocks trades are generally charged a flat rate based on your client relationship with the broker. Some companies will charge active traders or high-asset customers a lower per-trade fee. The company's flat rate may also be accompanied by a per-share fee or a fee for placing the trade over the phone with a broker instead of on line. Make sure when comparing firms that you go through a number of different trading scenarios using the company's fee structure. Be sure to also consider management fees if you are using an investment manager or adviser. They may charge you for each trade in addition to a percentage of your account as a management fee.
3. Keep an eye out for hidden or unusual fees, and remember that there are important fees to consider outside of the fees for each trade. If your account balance does not meet the minimum account balance requirements or you fail to make a certain number of trades per quarter or year, you may be charged a fee. If you plan on trading on margin, essentially a line of credit from the broker with your investments as collateral, margin interest rates can vary greatly and should be compared carefully.The company may also charge fees for withdrawing cash from your account, requesting a stock certificate, stock reorganizations, or processing worthless securities. These can all add up and should be considered when comparing different online trading companies.
4. Organize the different fee structures to decide which one is best for you. Fees and commissions can be complicated. You may find it easier to keep track of the different options by copying and pasting the fees and commissions into a spreadsheet or database program. This will allow you to set up trading scenarios that you can apply to each different fee structure with relatively little effort.