I‘ve been doing a lot of research when it come to discount online brokerages lately. It seems like just about everyone has a service that they like best, and that they prefer using. The first one I had heard recommended was OptionsHouse. It has a good mix of research tools, low cost and ease of use. Definitely one to look into, especially for active traders.
ShareBuilder by Capital One is another one that I had heard good things about, and since I already have a savings account with the same company, Capital One 360, I thought I would give it a once over.
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ShareBuilder by Capital One History
From Wikipedia:
ShareBuilder (formally ShareBuilder Securities Corporation) is a United States based online brokerage firm founded in 1996 (as NetStock Direct). It encourages recurring, automatic purchases of shares of stock, ING Mutual Funds (Class O) and exchange-traded funds. All transactions occur online and are entirely at the discretion of the account holder, thus it is an execution-only service. The company does not have brokerage sales representatives or advisors. Account holders can use ShareBuilder’s online research tools to investigate stocks, similar to other online brokerages such as Scottrade, TD Ameritrade and Fidelity. In 2005, ShareBuilder began offering 401(k) plans to small businesses. On November 19, 2007, ShareBuilder Corporation was purchased by ING Direct, a subsidiary of ING Group for US $220 million. In June 2009, ShareBuilder moved its headquarters from Bellevue, Washington to 83 King Street, in the Pioneer Square district of Seattle, Washington. In February 2012, Capital One Financial Corporation completed its acquisition of ING Bank, fsb, and its subsidiaries, including ShareBuilder Corporation. ShareBuilder is no longer affiliated with ING Group
Company Awards
ShareBuilder has earned a bunch of awards and has been recognized as one of the top online brokers for beginning & long term investors. Among the awards:
- Forbes Best-of-the-Web awards in January 2003 and January 2004
- Kiplinger’s Personal Finance ranked Sharebuilder #1 in “25 Ways to Invest $1,000.”
ShareBuilder Fees, Commissions And Minimums
Probably one of the most important things to consider when opening an online brokerage account is to consider what fees, commissions and minimums you’ll see when using an account. Here is what you’ll find at ShareBuilder:
Stock Trades
Sharebuilder has competitive fees when it comes to stock trades. They have $6.95 stock trades. Compare to some others like OptionsHouse at $2.95 or TradeKing at $4.95 a trade, and they are a bit higher, but there is a caveat.
If you’re less of an active trader and more of a buy and hold investor, their automatic investments may be a good fit for you, and more affordable. Automatic investments, done on Tuesdays, will cost only $4. If you sign up for their Advantage plan, you’ll get 12 per month for free included in the $12/month subscription, and it’s only $1 for each additional. They offer a dollar cost averaging plan as well.
Options Trades
Sharebuilder has a fee for options trades of $6.95 per online trade, + $1.25 per contract.
Fees And Minimums For An Account
ShareBuilder doesn’t have account maintenance fees, monthly minimums or inactivity fees. All prices are charged on a flat rate, and what you see is what you pay.
There is no minimum account funding level, although if you want to get the $25 bonus mentioned above, you need to fund with at least $25.
Here’s a basic fee comparison with other discount brokerages:
| Account Minimum | Mutual Fund Commission | Stock Commission | Annual IRA Fee | Reviews | |
|---|---|---|---|---|---|
| OptionsHouse | $1,000 | $9.95 | $3.95 | none | OptionsHouse Review |
| Motif Investing | $1000 | $9.95 (per motif/bundle of stocks) | |||
| TD Ameritrade | none | $0 | $9.99 | none | TD AmeritradeReview |
| Zecco | none | $10 | $4.50 | $30 | |
| TradeKing | none | $14.95 | $4.95 | none | |
| Scottrade | $2500 | $17 | $7.00 | none | Scottrade Review |
| Vanguard | none | $0 | $7.00 | $20 | |
| tradeMONSTER | none | $15 | $7.50 | none | |
| Fidelity | none | $0 | $7.95 | none | |
| Schwab | $1,000 | ? | $8.95 | none | |
| ShareBuilder by Capital One | none | $19.95 | $6.95 | none | ShareBuilder by Capital One Review |
| Etrade | none | Up to $19.99 | $9.99 | none | |
| optionsXpress | none | $14.95 | $14.95 | none |
Other Investment Account Types
ShareBuilder offers a plethora of other investment account options for investors. Among them:
- Individual Account
- Joint Account
- Traditional/Rollover IRA
- Roth or Conversion IRA
- ShareBuilder ESA (Education Savings Account)
- Custodial Account
ShareBuilder Research & Tools
In the past ShareBuilder may have been a bit short when it comes to the research and education departments. Within the last few years, however, ShareBuilder has really built up their library of educational tutorials and investment tools.
They now have a variety of tools including such things as an investment screener, a portfolio builder, fund/stock/ETF selectors, reports, simulators and calculators.
They also have a wide variety of investment information for beginning investors including tutorials and articles in their investor library.
Capital One 360 Savings Or Checking – Easy Linking
Another thing that I like about ShareBuilder is that you can easily link it to your Capital One 360 Savings or Capital One 360 Checking if you have them. I personally already have an Capital One 360 Savings account and being able to easily link the accounts for automatic investments is nice.
Conclusion
When considering an online discount brokerage ShareBuilder is definitely one of the best options out there for long term investors who want to set up automatic investments and do long term dollar cost averaging. If you’re more of an active trader you may want to look elsewhere for a slightly lower cost option, although they're still pretty competitive. But if you just want a plan that will allow you to automatically invest over the long term, ShareBuilder would be a good place to check out.
Have you used ShareBuilder, or considered using them? What has your experience with them been like? Are you happy with them? Tell us your thoughts in the comments.
To open an account with Sharebuilder by Capital One click here
Sharebuilder is probably the best thing going for people looking for easy, automated purchases of individual stocks. I’m not really sure how many people actually fit that market segment, but the service is practically designed for them.
With that said, investors that fit this profile should first check to see if they can access the stock through a fee-free DRIP. The only difference here is that most DRIPs are free, but they usually allow for additional investments at the 1st or 31st of each month compared to every week with Sharebuilder’s $4 deal.