Just like having a bank account, which requires you to pay certain fees, investing doesn’t come without certain costs. These differ depending on which broker you invest with.
Typically you can expect to pay a monthly fee just to use the platform you are investing with. You’ll also typically pay a fee to transact (buy or sell shares) on the platform that you invest on. These are called brokerage fees and usually range from around 0.25% to 4% of the value of your transaction.
There are also some unavoidable transaction fees you are charged when buying and selling your investments and these will always be charged no matter where you choose to buy shares.
Although technically not a cost, another thing to consider is that most investment platforms require you to deposit and invest with a minimum amount set by the stockbroker. For example, you may only be able to use their platform if you have $1000, to start with.
Transparency
Generally, it’s always a good idea to know exactly what costs you’ll be paying before you go through with a transaction in your investment account.
You'll want to do your research to understand the fees and the costs involved before you continue with a specific transaction. That way, you know exactly what you are in for, each time.
