ShareBuilder offers automatic investment plans that are inexpensive to purchase. For investors who do not believe in timing the market, or who simply don’t have time to follow it and prefer to dollar-cost-average their investments with monthly, biweekly, weekly or daily set amounts, ShareBuilder’s investment strategy is the ideal way to go. The downside of automatic investment plans is that investors have no say as to the price at which they are purchasing the investments.
At $9.99, ShareBuilder is a comparatively high cost real-time commission for stocks and ETFs. As with E*Trade there are no account maintenance fees or inactivity fees and there are no surcharges on either extended hours orders or large-sized orders. There is also a $0.007 charge for each share of penny stock trades.
In contrast, E*Trade has a reputation for being one of the best online brokerage firms and offers efficient trading tools, independent research, banking services and good customer service. E*Trade commissions are identical to its competitor at $9.99 per stock or ETF trade. However with E*Trade, stocks and ETFs are $9.99 when you have 0-149 trades within the quarter and $7.99 for more than 150 trades per quarter. As for options, there is a fee of $9.99, plus seventy five cents for each contract if there are 0-149 trades in each quarter. Anything over 150 trades per quarter will cost $7.99 and seventy cents for each contract. Mutual fund transactions are $19.99 and future contracts are $2.99 per contract plus additional fees. The minimum amount of money required to open an ETrade account is $1,000.
At ShareBuilder the basic plan is $4 per investment. The standard plan costs $12 a month and for this amount you get 6 automatic investments, after which each additional investment is $2. There is also an advantage plan that costs $20 a month and offers 20 automatic investments with each additional investment costing just $1. Real-time stock and ETF trades are $9.99. When it comes to options there are two choices; the Early Exercise and the Automatic Express. The first costs $30 per early exercise and there is no trade commission, while the second is $20 per automatic exercise and also has no trade commission. ShareBuilder has 70 free funds from premier, no-load mutual fund families. Unlike E*Trade, which charges $1000 to open an account, there is no minimum amount required to open an account with ShareBuilder.
For investors who are just starting out, brokers that offer a more vibrant online community than either E*Trade or ShareBuilder may allow users to ask important questions and learn about different investment ideas from more experienced traders. In addition, beginners should look for a virtual trading environment that allows investors to simulate trades without actually risking any money.
ShareBuilder is generally best recommended as the go-to place for automatic investment plans. On the other hand, E*Trade is considered to be a decent choice for IRA accounts and for “buy-and-hold” investing. When it comes to other needs, be sure to also check out other online brokerage companies that allow customers to pay considerably lower commissions, thereby potentially saving thousands of dollars throughout the years in unnecessary investment costs.