As many of you know, I have several brokerage accounts. In an earlier article I discussed that I do this, in order to protect my capital in the event that a broker I use fails. It would be unfortunate to be a financially independent person, but have my assets frozen for a few weeks, especially when I need that income to live off. As a result, my favorite exercise is to open a brokerage account, fill it up with $100,000 or so, and then use the dividends and new cash to open another brokerage account.
One of the brokers I have been using for the past 8 years is Tradeking. I think it is a good broker for new dividend investors, who are just starting out. The interface is user friendly, and the customer service is good. In addition, it has one of the lowest commission and other costs for new investors.
The nice thing about Tradeking is that it is also offering a $200 cash bonus for new investors who fulfill the following easy requirements:
1) Must be a new customer who opens an account by December 31, 2015
2) Must fund the new account with at least $3,000 within 30 days of opening
3) Must make at least 3 trades within 90 days of account opening
4) You must use the following link here
This is limited time offer, so you have to act fast if you qualify. After you meet all three requirements, you will earn a $200 cash bonus, deposited approximately 10 days after qualifying. This sounds like a very good return on investment on that $3,000. When I was building up my asset base, I frequently used bank and brokerage account bonuses to get “free money”. Even a couple hundred dollars invested wisely, could compound into a couple hundred in dividend income in the future. If you make 2 investments/month, this cash bonus is equivalent to receiving "free trades" for almost 2 years.
The account opening process is easy and straightforward. You need to add name, social security number, address and use one of the many funding options to fund your account. I use ACH, which allows me to link to my bank account.
Tradeking offers a low commission of $4.95/trade. This is one of the lowest commissions available to investors. With Schwab you pay $8.95/trade, with Scottrade - $7, while Sharebuilder or Merrill Edge charge $6.95 for a real-time trade. I prefer Loyal3, since it does not charge anything for an investment. However, the executions with Loyal3 are not placed in real time, and your investment choices are limited to 60 companies or so. With Tradeking, your executions are instantaneous, and you can invest in almost any stock listed on the NYSE or NASDAQ. In addition, you can buy ETFs or Mutual Funds. Your investments are SIPC insured up to $500,000. The company offers security, and I especially like the fact that they fill in schedule D for you at tax time.
These days, I do most of my investing using Interactive Brokers, which charges me 35 cents/trade. However, it requires a $10,000 minimum deposit and it charges you $10/month if your account balance is less than $100,000 or you spend less than $10 for commissions in that month. In addition, they cater mostly to the needs of more experienced investors. I know for a fact that some investors have found Interactive Brokers to be more confusing.
This is why I believe Tradeking is a better broker for those who are just getting started. Their customer service is top notch, and they have a lot of educational material available. In addition, you can reach customer service reps by phone, secure email or chat. In my interactions, I have found them to be helpful in ultimately resolving my queries.
TradeKing has received 4 out of 5 stars in Barron's 12th (March 2007), 13th (March 2008), 14th (March 2009), 15th (March 2010), 16th (March 2011), 17th (March 2012), and 18th (March 2013), 19th (March 2014), and 20th (2015) annual rankings of the Best Online Brokers based on Trade Technology, Usability, Mobile, Range of Offerings, Research Amenities, Portfolio Analysis & Reports, Customer Service & Education, and Costs. So you can say their customer service is on a good level, especially if you have a lot of questions.
Tradeking offers dividend reinvestment, or DRIPs for one or all securities you own. There is no cost associate with that service, and fractional shares are permitted. There are extra fees if you want to trade options – 65 cents per contract in addition to the commission of $4.95/trade. In addition, there is an inactivity fee of $50/year for those whose account value drops below $2,500. If you make one trade however, this fee is waived. The list of other fees is competitive, and pretty straightforward. They also offer IRA’s, without any annual fees as well. However, this $200 cash bonus offer is not available for new IRA accounts.
Overall, by opening an account with $3,000 and making 3 investments, you will be able to earn a cash bonus of $200. This turns out to a return of over 6%, which is not bad. This of course is on top of the returns you will already generate from dividend stocks. I have learned never to despite the days of small beginnings. Again, this limited time offer will expire at the end of December 2015, so you have to act fast if you qualify. You can start by clicking on the banner below or by clicking on this link.
Full Disclosure: I will earn an affiliate commission for each customer that signs up for using Tradeking.
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