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Residents of South Africa interested in stocks have more opportunities than ever. Large broker brands allow them to enter the global exchange and trade shares online. Discount brokerages provide cheaper services. It is worth learning what these companies can do for you.
Forget the old-school stock exchange. In the past, every operation required phone calls between the broker and the client. Today, you can buy almost any type of securities online.
The marketplace is a better option for the average trader and entry is affordable. This has also benefited the stock exchange and the global economy in general. It is estimated that over 15 million people engage in trading over the Internet. Many of them buy and sell stocks or derivatives.
Competition in Discount Brokerage
These providers are divided into several categories. The differences are often subtle. Here is what to expect.
- Any provider will give you access to various trading instruments.
- The fees will be relatively low.
- All digital platforms are user-friendly.
- Often, you will be allowed to create taxable brokerage accounts as well as personal retirement ones.
- Some discount brokers also manage mutual funds and other investments.
There are also regional distinctions. For instance, in the U.S., most discount firms offer 401(k) plans. Generally, as the brokerage field is competitive, companies have been lowering their fees to attract more clients. Firms that want to get to the top offer modest commissions and costs for investors.
The Most Popular Names
Today, there are many discount brokers. Here is a list of the most popular brands. Today, they compete with rivals that are coming onto the scene regularly.
1. Charles Schwab
This company is considered a pioneer in the field. Founded in the mid-1970s, it now boasts roughly 11 million active clients. The brand provides equity trades $4.95 per each, 200+ ETFs without commissions and 3,000+ mutual funds without transaction fees or loads (fees for purchase or sale).
This company emerged in the 1990s. Back then, E-Trade disrupted the conventional relationship between investors and brokers. Today, it still offers attractive conditions. Traders or stocks and options are changed to $6.95 per trade. This amount drops to $4.95 for 30 or more trades monthly.
A service called Core Portfolios allows investors to have their assets managed professionally. The concept is similar to copy trading in Forex. The difference is the initial investment. E-Trade requires a minimum start-up budget of $5,000. There is also a fixed annual fee of 0.3%.
In comparison, currency traders may enter the market with just $10 on cent accounts. For stock and CFD trades, global brokers require a deposit of $100. Learn what is copy trading in Africa and how to delegate financial decisions to a ForexTime expert.
3. TD Ameritrade
This contender was founded in the 1990s. Today, it is among the most popular brokers. The number of client accounts has exceeded 11 million. Trades cost $6.95 apiece. The company has 300+ ETFs that do not require a commission. TD Ameritrade offers Thinkorswim, an advanced platform for frequent investors. Both desktop and mobile environments work seamlessly.
This is not just a brokerage for trades over the Internet. Fidelity provides advisory services (including robo-advisors), and it has unique investment products. These include mutual funds that the brand markets and manages. Fidelity also administrates multiple 401(k) plans.
Trading of most securities costs $4.95 per transaction. However, there are also iShares ETF products that are commission-free. Lately, the company has unveiled its own index funds. These four funds have zero fees and no expense ratios.
Vanguard is a prominent proponent of low-cost investments. Today, it offers accounts that allow clients to trade the brand’s own ETFs and mutual funds. They also have free access to 1,800+ other ETFs. These are also commission-free.
The fee for stock trading begins at $7 and decreases the more you invest. Vanguard is an administrator of 401(k) plans. It offers 520+ college savings plans, taxable brokerage accounts, annuities, as well as traditional and Roth IRA accounts.
6. Ally Invest
This company is among the younger brokerages in the field. Clients may act as self-directed investors and use a clean digital platform. There are Cash Enhanced Managed Portfolios, which require zero advisory fees. Securities may be traded for only $4.95 each. The fee drops to $3.95 for clients whose balance is $100,000 or more. It is also possible to trade bonds for $1 per transaction.
Other Discount Brokerages
These are the top 5 popular brokerages today. There are many new companies with low or non-existent fees. For instance, the Robinhood app is all the rage. It suits the needs of rookie investors and charges no fees. Today, even major banks offer discount brokerage services.