ShareBuilder has several features that make it stand out from the other, more well known on-line brokers; e.g. Fidelity, Vanguard, ScottTrade, TD AmeriTrade, ETrade, etc.
NOTE: “ShareBuilder” is now owned and operated by Capital One Investing. You will see their logo instead of ShareBuilder but everything else is the same.
Unique Features of Sharebuilder
No Minimum Account
Most brokers require that you fund your account with some minimum amount, say $1000. At ShareBuilder, you can start with as little as $25.00.
No Minimum Amount
Some funds require a minimum initial investment amount, $500 to $1000. Sharebuilder pools investors’ money so that there is no minimum amount you need in order to start purchasing a fund.
Purchase Partial Shares
ShareBuilder is the only broker that will purchase partial shares! That is, you don’t have to buy whole shares. With $100, you can buy 0.75 shares of something that is being sold for $133,33 a share. Without this feature, you may be unable to make monthly purchases because the amount you want to invest is less than the price of a share.
VTI is an Exchange Traded Fund (ETF, more about ETFs later). ShareBuilder is the only brokerage house that will automatically withdraw funds from your checking account AND purchase ETFs!
Automatic Withdrawal From Checking Account
ShareBuilder will automatically withdraw funds from your checking account according to your instructions; once a month in our case. These funds are then invested in whatever securities you decide – VTI in your case.
Low Execution Fees
With ShareBuilder the fee to execute your trade is only $3.50 per transaction. All other brokers charge at least $7.95 per trade execution.
Should you decide you want a diversified portfolio, you can get 12 trades per month for only $18.00. If your account was held by Fidelity a diversified portfolio of, let’s say seven securities, your monthly transaction fees would be 7 x S7.95 or $55.85. That means of your $500 monthly investment, only $444.15 would actually make it into the market. 12% of your investment would go to Fidelity.
No Transaction Fees
In addition to a trade execution fee, some brokers charge a “transaction fee” in addition to their trade-execution-fee. For example if you purchase a Vanguard security from your Fidelity account, you will be charged an extra $75.00 per trade! ShareBuilder has no transaction fees.
ShareBuilder allows you to go on automatic pilot even with minimal investment amounts per week. Set it up and never give investing another thought. No minimum investment amount, purchase of partial shares, purchase of ETFs, automatic withdrawal … these are the features that make ShareBuilder unique. These features make it easy to stay with the plan. That is an important feature. That’s what keeps you in the dollar averaging mode.
That’s it. That is why you should use ShareBuilder. Investing is automatic. You don’t have to do anything. You don’t even see the money or have to write a check. It’s very low cost. It’s easy to get started. It is about as painless as it can get.
Here is a link to the ShareBuilder* account setup page. You will be given the opportunity to select the ShareBuilder plan after you have created the account.
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