Best Online Brokerage For Dividend Investors

It has been a little while since I have reviewed online brokerages and I think it is about time to take another look at what some of them have to offer.  The information in my previous reviews is somewhat old, so the major benefits and prices may need to be reviewed.

The reason that I bring this up is that I am currently reviewing my portfolio and I am wondering if I should consider moving my brokerage account.  I currently have accounts with Fidelity (IRA), Scottrade (Open account), and Credential Direct (Canada).

Since spring and summer tend to be a little slower as far as investing goes, I’m sure that some of the brokerages are going to be promoting trade specials for new accounts and possibly creating new active trader promotions.

Several online brokers, such as E-Trade, are offering high interest savings accounts for your cash position. This is an attractive feature for me because I like to save some cash for buying opportunities that may arise. That said, with the recent new highs being made each day, the buying opportunities are few and far between. However, it is important to have capital ready to deploy when one of those great dividend growth stocks gets itself into buying range.

I would encourage you to read through the features and benefits of each broker that was reviewed in the previous articles and decide which options or features are most important to you. If you are like me and invest in high quality dividend paying stocks, you won’t be doing much trading, so the active trader prices may not apply. That is, of course, unless you are currently building multiple large positions in dividend growth stocks with a large amount of cash.

I would highly suggest that you deal with a reputable online broker even if it means paying a little bit more per trade. Some of the newer “fly-by-night” operations make me a little nervous with their too good to be true offers.

Selecting the right online broker is like investing in a stock…you have to be prepared to investigate and complete your due diligence to ensure that you are getting the most bang for your buck!

Which online broker do you use?

9 comments

  1. i like TDAmeritrade because of their excellent service.
    I tried opening an account with zecco but they’re a bunch of morons and they’re service is AWFUL.
    I’m thinking of opening an account with Bank of America but their site does work well on certain browsers under linux operating system (so i’m holding back until then)

  2. I think the most important feature for dividend investors is to have a free DRIP option, and almost more importantly is the ability to drip fractional shares. By this I mean if you get a dividend for less than the price of a stock, you still get a fraction of that stock. I have used firstrade.com for years. Trades are a low $6.95, and they have free DRIP, and buy fractional shares up to .000 decimals.

  3. I opened an account with Zecco in March and I am very happy. You need to carefully complete the instructions to set up the account. Now that the account is set up it is working great. I have transferred most of my stock out of Scottrade and into Zecco. I love the ACH feature for money into and out of the account.

  4. I too use Scottrade and have been relativity pleased. Prior to Scottrade I used TD Waterhouse until they started trying to fee me death – I have noticed they have since dropped most of the fees that chased me off (e.g. inactivity fee, etc.) Zecco is one I have looked at, but but have never quite got comfortable with. Like the comments above, for every good experience there is a bad to offset.

    Best Wishes,
    D4L

  5. I use several brokerages because of personal/work/retirement issues.
    I use fidelity for work and retirement, which is ok, although commissions are a little high.

    Sharebuilder is fine for fractional shares and their multiple account opening bonuses.

    Schwab is pretty nice because you can have both a checking and a brokerage account, again with a little bit higher commisions..

    Zecco… I tried opening an account there. Unfortunately though the process was very frustrating and not efficient. At the end of the application process i was informed that my application is on hold and that they would send me a paper package in the mail. I never received this package, and its been several weeks since then..

    I am also trying out TradeKing.. Will report about them later..

  6. Hello, everyone. Newbie dividend investor here…

    I have been using Schwab. As have been mentioned before, it is convenient to have a (fairly) high interest bearing checking account and a brokerage account from the same company.

    DRIP is free. Allows fractional shares for DRIP as well. Commissions are higher, but the fact that they have been around for a while lets me sleep better at night. I chose Schwab for their checking account after my old online bank folded back in December. I had a hard time getting my money from that old bank, so stability is a little more important for me now.

  7. I use fidelity. Only because it has my 401K. Its bit pricey at $10.95, but provides free DRIP, fractional shares, and ease of portfolio management. For my longterm objective and seldom trader, I think the few extra bucks in fees is a wash. I also use sharebuilder to lesser extend. But I do not find it flexible enough for my needs. But it would be good for regular ETFs investing for DCA.

  8. @Ty – Yes, I am a little concerned about companies that do not have a history of “Brick and mortar business” not that it should make a difference, but it does to me. At least there is a place to go raise some heck if things go south!

    @Dividend Tree – I like the idea behind Sharebuilder, but it does need to allow for some greater flexibility to appeal to a broader audience of investor. However, that may not be their focus and that is fine.

    Thank you for the comments and keep on investing!

  9. I agree that Zecco can be frustrating to deal with sometimes, but it’s hard to beat free trades, especially in a ROTH IRA. They will also reinvest dividends. Scottrade doesn’t offer dividend reinvestment, but I keep my account open there for the great research tools and real time quotes.

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