Finding out about minimum balances, fees, and costs

Finding out about minimum balances,
fees, and costs

Traditionally, brokerage firms have required a fairly substantial
minimum balance to open an account — upwards of
$1,000. Online brokerage firms tend to be far more liberal
about minimum balance requirements. You can generally
open online accounts with nominal minimum balances.
Chapter 6 explains how you open an online account.
Each online brokerage firm has to post a schedule of all its
commissions, fees, and service charges on its Web site. Online
brokerage commissions and fees are almost always
Chapter 1: Scoping Out Online Investing 7
substantially lower than the costs associated with traditional
full-service or discount brokers.
Lower online commissions and service fees are due in large
part to lower overhead — fewer buildings to maintain and
decorate to impress clients, and fewer brokers sitting in them.
The competition of having so many brokerage firms posting
their fee schedules on the Web also drives costs down. (Chapter
6 tells you more about how to compare fees and services
for various online brokers.)

Scrolling Through Online

Investment Options
When people think of investing, they usually think of stocks.
But one of the basic goals of sound investing is to accumulate
a diverse portfolio. Your portfolio is your collection of
assets, and it should include an array of investments with
different levels of risk — maintaining this variety is called
diversification.