Looking for the best discount broker in india? But what is a discount broker?
Now that you’ve decided you want to start investing your extra money, you have to start strategizing and purchasing investments. How do you buy investments? You can’t go to the store and get them or order them and have them shipped to your house. If you want to buy stocks, you need to use a broker.
A stock broker is an individual at a brokerage firm that goes on the floor at the stock exchange and buys stocks. Stocks traded on the NASDAQ are done electronically. As investors, when we talk about brokers, we are usually referring to the brokerage firm as a whole.
There are two main types of brokers: discount brokers and full service brokers. Full service brokers were around before discount brokers started up in the 70s. Discount brokers have only recently started offering brokerage services entirely online.
A full service broker is a broker that helps investors choose investments, gives them advice, and charges a lot of money. Some brokers easily charge over $100 for a trade that would only cost $10 or less at a discount broker.
Full service brokers offer services you may or may not need. If you want to be completely hands-off with your investments and leave it to the pros, a full service broker is fine. However, if you want to make as much money as possible, save money on fees, and choose your own investments, use a discount broker.
A discount broker only charges you for the actual trade. You won’t get advice or any help beyond the tutorials available online, but many investors don’t need this. Even if you aren’t comfortable choosing individual investments, go with a mutual fund. No load mutual funds don’t charge extra fees, and they allow you to invest without doing a lot of initial and ongoing research.
What is the benefit of choosing a discount broker over a full service broker? The main benefit is that you get to save money. Every dollar you save, whether it’s on trading fees or grocery bills, can be invested. Every dollar that is invested has the opportunity to earn lots of money and compound over time. Use a discount broker and you can save all those extra fees.
Some people don’t like full service firms because they get paid large commissions every time you make a trade. That means they are more likely to encourage you to make more trades so you spend more money and they make more money off you. Not all full service firms are like this, but you won’t have to worry about any of this if you choose a discount brokerage firm.