Which Brokerage Firm Is Best... and Cheapest?

By Candice Choi, AP Personal Finance Writer

NEW YORK (AP) — You should be tickled by the talking babies, even if you're sick of E-Trade's ubiquitous TV ads. They show discount brokerages are vying for your business.

In the past few months, a price war among the biggest brokerages has dropped trade commissions to their lowest levels ever. Fidelity last month slashed its rate to a flat $7.95 per trade, from a sliding scale that ranged from $8 to as much as $19.95. The move came just weeks after Charles Schwab lowered its price to $8.95.

Other costs, such as account maintenance and inactivity fees, have been largely wiped away by competition too. And prices can be even lower at smaller brokerages, where you may also find some unique features.

The only downside to all the choices? Deciding which fits you best. A look what you'll find at the most popular brokerages, followed by pricing snapshots.

THE BIG FIVE: MORE THAN TRADING

It's natural to start your search with names you recognize. The five largest discount brokerages based on customer assets are Charles Schwab, E-Trade, Fidelity, Scottrade and TD Ameritrade, according to the Aite Group. Those companies also happen to be good places to get financial services beyond trading.

Just which features you'll find depends on the brokerage, however.

For example, if you want to consolidate all your accounts in one place, take a look at E-Trade and Schwab. Both offer banking products such as checking and savings accounts, in addition to standard brokerage services.

Or you might value having a branch office nearby where you can get live help. If that's a priority, check the company's Web site to see if there's a location near you. Note that Scottrade says it has the largest physical presence with more than 450 branches across the country, while Schwab has more than 300.

If a concern is saving for retirement and finding a good mutual fund, Fidelity offers nearly 4,000 no-load funds while Scottrade offers nearly 3,000. No-load funds don't charge an upfront sales fee, but may include other fees.

If the ability to analyze investments is a selling point for you, Fidelity says it provides the most independent research reports of any of the big five.

Once you have a better idea of which brokerages suit you, check out the basic pricing below. Even if one has a lower trade commission, you might not like the other terms. For example, Fidelity and Schwab provide free paper statements, but the other three charge $2 per statement. And there's often a fee to close an account or even transfer a portion of your money out.

CHARLES SCHWAB

Trade commission: $8.95

Trade via phone: $13.95

Trade via broker: $33.95

Outgoing account transfer fee: $50 for full transfers, $25 for partial transfers

Minimum balance: $1,000

Extra: 150 free trades when you open an account with $50,000 and agree to make 36 trades per year

E-TRADE

Trade commission: $9.99

Trade via phone: $9.99

Trade via broker: $54.99

Outgoing account transfer fee: $60 for full transfers, $25 for partial transfers

Minimum balance: None, but it's $500 to open an account

Extra: Trade commissions fall to $7.99 if you make 150 or more trades per quarter

FIDELITY

Trade commission: $7.95

Trade via phone: $12.95

Trade via broker: $32.95

Outgoing account transfer/closure fee: None; $50 to close retirement accounts

Minimum balance: $2,500

Extra: Independent research from 125 companies on more than 8,000 stocks.

SCOTTRADE

Trade commission: $7

Trade via phone: $17

Trade via broker: $27

Outgoing account transfer/closure fees: None

Minimum balance: None, but it's $500 to open an account

Extra: Reimbursement of up to $100 in fees you're charged by other brokerages to transfer funds to Scottrade

TD AMERITRADE

Trade commission: $9.99

Trade via phone: $34.99

Trade via broker: $44.99

Outgoing account transfer fee: $75 for full transfers, $25 for partial transfers

Minimum balance: None

Extra: 30 days of commission-free trades if you open your account before June 30, and $100 for opening any non-IRA account with at least $25,000

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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