TradeKing.com IRA Review

May 16th, 2008  |  Published in Retirement  |  3 Comments

TradeKing.com: Smart Money #1 Discount Broker 2006, 2007TradeKing.com is one of the leaders in the online discount broker business with their $4.95 market and limit equity trades and $4.95 option trades (+65 cents per contract). It was named Smart Money #1 Discount Broker in both 2006 and 2007 and likely will win for 2008 as well. It is comforting to know that a reputable publication like Smart Money is willing to stake it’s reputation and name it #1 in discount brokers two years running (it also happens to be #1 in online discount brokers as rated by me!).

So, what are the specifics of their IRAs? Well first off, TradeKing.com does not charge an annual fee for maintaining an IRA account, which is relatively rare. By comparison, Vanguard has a sizable fee that can be avoided if you request all electronic notifications. TradeKing.com also charges a $50 fee for closing your IRA or transferring out funds but that’s a standard fee in the industry.

Lastly, another nice, and rare, feature is that TradeKing.com has no account minimums. If you want a Vanguard account, the minimum you need to open an account is $3,000. While you’ll always want to put as much as you can into your IRAs in the beginning, it’s always nice to know that you can start with $100 if you really want to. Of course you won’t want to begin trading yet because even at $4.95 a trade, each transaction costs you 5% of your portfolio if it’s only $100.

So, TradeKing.com looks like a pretty good place to put your IRA if you haven’t yet picked a spot for it yet. Smart Money can’t be wrong two years in a row, can they?

If you’d like to learn more, he’s a far more in-depth TradeKing review at Blueprint for Financial Prosperity.

Sharebuilder IRA Account Review

May 7th, 2008  |  Published in Investing  |  1 Comment

Sharebuilder, owned by is one of the best online banks, is a popular broker that has offered a handsome new account promotional bonus for as long as I can remember (current bonuses run in the $50 range). This begs the question, would they make a good place to hold your IRA’s?

Sharebuilder made a name for itself for $4 trades if you were willing to wait until Tuesday for the transaction to execute. For many years, a real-time trade was not an option until recently, when the price was set at $9.95 a trade (which is still pretty cheap but not $4.95 at TradeKing). That being said, if you’re buying for the long haul or you’re buying on a set schedule, you don’t need real time trades because the Tuesday buying schedule will work just fine.

Here are the other benefits of Sharebuilder:

  • Free dividend reinvestment – This is where they got their name, share builder, and one of the best reasons to join Sharebuilder. Rather than having the dividends sit in cash after they’ve been paid out, you can elect to have free dividend reinvestment and build your holdings. This is a feature that many offer nowadays but was novel back in the days Sharebuilder started.
  • Fractional ownership – When they first started, it wasn’t possible to buy fractional shares and Sharebuilder gave you that option. In fact, back in the days before the internet, you couldn’t even buy odd lots (shares that didn’t number in round 100’s); however Sharebuilder gave you the option to buy 1.5 shares or 100.3 shares.
  • Scheduled purchases – The $4 trade fee applies to transactions schedule on that Tuesday, likely to assist in bulk purchases, but it also let you de facto schedule your purchases every month at a set time.

Overall, Sharebuilder, now a subsidiary of ING Direct, is certainly a great place to turn to if you are of the buy and hold mentality and have little to invest.

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The 151st Carnival of Personal Finance is up at the Alpha Consumer, please check it out! My post about the difference between lifestyle and life-cycle funds was listed this week.