Broker Maintenance fees, while uncommon, still exist in today’s marketplace. The good news is, there are ways to avoid those maintenance fees. A maintenance fee is something that many investors believe is inconsequential, but that couldn’t be further from the truth. That annual fee that seems so small at the beginning can really add up over time.
Here at stockbrokers.com through our broker reviews you can see exactly which brokers have maintenance fees and which do not. As an investor you must take it upon yourself to avoid broker maintenance fees at all costs. Let’s take a closer look at 5 ways to avoid broker maintenance fees.
5 Ways to Avoid Broker Maintenance Fees
1. Shop Around – There are many brokers who charge maintenance fees, but there are also quite a few brokers who have no maintenance fees at all. In the same manner that you should only use no-load mutual funds, you should stick with a broker with no maintenance fees. Do some solid comparison shopping with the Online Broker Versus Pages before you sign up with a broker, and make no maintenance fees a high priority.
2. Ask Questions and Read Fine Print – Maintenance fees obviously aren’t going to advertised by the broker, but rather they will be in the fine print. It is incumbent upon you to read the fine print of the rules and regulations, and ask questions about any issue that is not clear. The single best way to learn is to ask informed questions, and smart investing is all about gaining knowledge!
3. Keep Track of Your Account Balance – While many stock brokers offer a low minimum amount for getting started, many of those same brokers charge a maintenance fee if your account doesn’t hold enough money. Know what the minimum account balance you can keep is (also shared on the broker reviews), and make sure your account balance does not drop below this amount. It’s important to note that with some brokers your account must maintain that minimum every single day of the year or else you will be charged a maintenance fee.
4. Link Your Accounts – Many financial institutions that charge account maintenance fees will waive the fee if you link accounts. For example, if you have an IRA you would be well-suited to transfer it to the same brokerage that you have your personal investment portfolio with, in order to avoid unnecessary maintenance fees. IRA accounts tend to have a maintenance fee even more often than a normal investment account so keep that in mind.
5. Stay Active – Many brokers will blur the lines between an “inactivity fee” and a “maintenance fee.” Inactivity can lead to an increased account maintenance fee. If you happen to have an account with a broker that charges a maintenance fee, you’ll want to make sure that you understand their activity rules as well.
Those are five ways to try to avoid broker maintenance fees. All in all, avoiding broker maintenance fees has become much easier over the past few years as more “no fee” brokers have emerged. Make sure you are well-informed before you select a brokerage, and keep those investment related fees to a minimum!