How to open an online broker account


The choice of selecting an online broker to make your trade is not always easy. At first glance, it looks complex with tons of paperwork to fill in. In reality, it is quite easy and you don’t need to go to your bank to do it. You can do it online in your pajama! Here are a few things you must look at before selecting an investing platform that will suit your needs:


I guess that this is probably hits the nerve of all traders; the transaction fees! If you are going to buy and sell different stocks or ETFs you certainly want to have a low commission broker. This means you are better off with online brokers rather than the brokerage division of any big bank or financial institution.

You can usually find a low commission broker offering trades around $5. If you are looking for examples, you can always try Trade Wiser, a free comparable brokerage site.


Another important point is that your broker allows DRIPs (Dividend ReInvestment Plans). The fact that you can increase the amount of stock in your account through the dividends received is an easy way to increase the value of your portfolio steadily without fees. While most brokers allow DRIPs, it is very important to validate if yours does! I’d say that it is also important to confirm that your broker offer DRIPs for all stocks (some, for some reasons, offer DRIPs only for specific stocks). This will help you avoid potential problems with your investment strategy later on.

Periodic Investment

You can obviously make periodic investments with any mutual fund with any brokers. However, some brokers also allow periodic investments with ETFs. When I did my own research to open a new brokerage account, I noticed that not all of the brokers offer the same service with major ETF companies.

Research Tools

How are you going to do your research to pick the right investments? Looking at financial blogs is a great start but I would push my analysis a little bit further if I were you. Some brokers offer technical analysis services, graphs, historical and even financial analysts’ recommendations and reports.

While you can easily find stats such as dividend payout ratios, history, dividend growth and yield, a more in-depth analysis done by  CFAs couldn’t hurt either ;-).

Since the goal is to do dividend investing, I would not pay more for a high tech technical analysis system. Your goal is to purchase steady dividend payers and not to determine if it’s the right time to buy or sell according to momentum.

Action of the day: open an online trading account

Now the fun stuff! : it is finally time to open a broker account! Instead of going on a Sunday afternoon and go through tons of online broker website to try the best one, I’ve done something a lot more powerful for you; I asked 14,364 people what they use. I’ve sent an email to the readers of The Dividend Guy Blog and the Dividend Monk and asked them for their favorite platform. I’ve received thousands of answers. Here are the preferred ones. Note that the two brokers mentioned above are referred with affiliate links.

For Americans, I suggest TradeKing    

This broker has been chosen for the following reasons:

Low commission fees (TradeKing is at $4.95 per trade)

$0 minimum deposit (which means that you can open your account today and not drop a penny)

Great Customer Service (from all the reviews I’ve read, both brokers show great feed back from customers)

Easy to use (this platform are user-friendly. You certainly don’t want to waste your time on learning a platform!)

For Canadians I suggest Questrade

Since Canadians are “stuck” in a ogopoly in regards to financial services, very few “low cost” options are offered. Most Canadian banks offer broker accounts but their trading fees are around $9.95 for most of them. Questrade is a great alternative as their trading commission starts at $4.95 per trade. They are also known for offering great customer service if you need to call them.

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