The Beginning Investor's Kit

Exercise: Top Online Brokers
With more than 100 online brokers to choose from, how do you select the right one? Choosing an online broker depends on your financial goals and investment habits. Survey the following list of top sites to find one that best suits your needs. Each was selected based on cost per trade, minimum investment requirements, services, and dependability.

American Express: Here's a solid model with a wide variety of products from mutual funds to insurance. What's more, there's no minimum investment to open an account. Each trade costs $14.95, but if you deposit $100,000 in an account, you can trade for free.

Ameritrade: Trade for as little as $8 a transaction, and choose from a large list of top-performing mutual funds. The site boasts more than 4,000 funds in all. The minimum investment is $2,000, and you can also buy stocks listed on the Canadian exchange.

Charles Schwab: Schwab is still considered the leader of the online broker pack. And for good reason: its easy-to-use site is loaded with money tutorials, screening tools, and investments from bonds to life insurance. In addition, there's terrific customer service: for example, Schwab will send you an email when your trade is completed. While the basic $29.95 per trade cost and $5,000 minimum balance is higher than others on our list, many investors think the price is well worth it.

DLJ Direct: A great full-service site, you can access real-time news and research from DLJ's stable of analysts. Also download free software to speed up your online transactions. There's no minimum investment and trades cost $20.

E*Trade: This site offers great resources for the novice investor, including message boards and chat rooms where you can discuss your questions. Some complain that E*Trade has been prone to outages, but signs indicate their problems are behind them. Minimum investment is $1,000 and trades are $14.95. Take advantage of promotions where you may receive anything from frequent flier miles to cash for opening an account.

Morgan Stanley Online: Morgan Stanley's expert stock analysis is only a click away, along with easy-to-use tools for buying a home or figuring taxes. Minimum investment is $2,000 for $29.95 trades. Once you become comfortable with online investing, consider upgrading to a full service Morgan Stanley Choice account. With a minimum investment of $50,000 and a fee of 0.3 percent to 2.25 percent of your assets, you will have your own personal investment advisor and other perks such as free trades and bill paying.

My Discount Broker: My Discount Broker touts speedy trades, which may come in handy if you use their new IPO center. No minimum investment required and trades are only $12.

National Discount Brokers: This easily navigable site offers no-load, no-transaction fee mutual funds along with no minimum balance. Account status screens spit out information in greater detail than most sites. What's more, you'll pay only $14.75 per trade.

Quick & Reilly: For $14.95 a trade and no minimum balance, you can access a long list of stock and fund screeners. Banking services are also available.

TD Waterhouse: This site packs in extras such as check-writing privileges, wire services, and IRA accounts--all at a lower cost than most broker sites. Consider: $12 per trade and $1,000 minimum balance.

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