How to choose the best online broker
In India, stockbrokers appeared over 200 years ago. The Bombay Stock Exchange was started in the 1850s by five stockbrokers who came together under a Banyan tree in front of Mumbai Town Hall. In 1875, a group grew significantly and formed the official “The Native Share & Stock Brokers Association.”
Nowadays, it’s impossible to count the number of brokers. Therefore, it becomes more and more complicated to find the best online broker for you. Below, you can find criteria that will help you find an honest and effective online broker. Be aware that you don’t necessarily need a broker to get started trading.
1. Which assets you can trade
The first thing you should pay attention to is the financial instruments the broker offers. It’s clear — if you want to trade a commodity, but commodity trading isn’t available on its platform, there is no point in checking whether it meets other requirements.
The most popular brokers always increase the number of assets they can offer to their clients to fulfill their requirements.
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To check the degree of the broker’s reliability, you can:
- Read user reviews. There are numerous websites, blogs, and social media groups where you can read the reviews of the platform’s current or previous users. Be careful if you find only positive opinions. You should understand that a company can pay for them.
Don’t be afraid of negative reviews. Compare the number of positive and negative opinions. If there are more good comments, this broker may attract your attention. Also, you can evaluate how important the points mentioned in negative comments are. For instance, if a user didn’t like that customer support replied in 30 minutes instead of 5, it may not be a big deal for you.
- Check their state authority. The second and more reliable way is to check which state authority regulates the firm. This information must be on the platform’s website. Regulation authorities examine brokers frequently. They have a set of rules every brokerage firm should follow.
If you want to enter the stock market in India, you will need trading and demat accounts. Although you can have them with different brokers, it would be better if you open accounts with one broker to facilitate easy fund and asset transfers. There are brokers that provide a 3-in-1 option so that you can link your trading, demat, and bank accounts.
You can’t have multiple trading and demat accounts with one broker.
Also, you can trade with a foreign broker that provides CFD trading on numerous financial markets. When trading with the best online broker for global trading, you need only a trading account.
You should keep in mind that besides funds needed for opening a trade, covering losses (if they happen), you will need to pay a commission to your broker.
It will depend on the number of services offered. An online discount broker allows you to open trades, while a full-service broker also provides account management and professional market analysis.
The average full-broker commission in India is 0.3%-0.5% per trade.
5. Tools and education
You should choose a broker that cares about your success and provides numerous educational materials. Today, due to tough competition, even discount brokers offer educational materials in the form of articles, videos, and free webinars.
Also, your broker should offer a demo account where you can practice trading without risking your funds.
6. Promotions and bonuses
Most brokerage firms provide promotions and bonuses. Although it may sound dangerous, brokers have enough funds to offer discounts and prizes to their clients. The most popular bonus is a welcome bonus. Find a broker that offers numerous rewards you can choose from.
7. Customer support
As investing relates to capital, you should be sure a broker’s support team can solve your problems quickly. First, the platform should have 24/7 customer support, as you may face issues at any time. This is especially true if you trade with a foreign broker that operates 24/7 (for instance, a forex broker) and is located in another time zone.
Also, there should be several ways to contact the support team, including via phone, live chat, and email. Before you start investing with a broker, send a request to its support team via all available communication options and check how quickly they reply.
Although it seems like the last thing you should think about, it’s vital to choose the best online broker for you. It should be your guide and friend in the complicated financial world. Otherwise, you risk losing your funds.