I‘ve been looking into the many options available to me lately when it come to discount online brokerages.
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, which I reviewed last time. It had a good mix of research tools, low cost and ease of use. Definitely one to look into, especially for active traders.
Sharebuilder is another one that I had heard good things about, and since I already have a savings account with Capital One 360, I thought I should give it a look.
ShareBuilder By Capital One Background
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.
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:
UPDATE: As of March 2013 Sharebuilder By Capital One slashed their prices from $9.95 per stock or options trade, to $6.95 per trade. That move makes them one of the most competitive brokerages out there.
Sharebuilder by Capital One has middle of the road, to expensive, fees when it comes to stock trades. They have $9.95 stock $6.95 stock trades. Compare to some others and they are very competitive.
On the other hand, 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.
Sharebuilder has a fee for options trades of $9.95 $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:
|Stock Trade Commission||Option Base Rate + Commission|
|Ally Invest||$4.95||$4.95 (+$0.65)|
|Motif Investing||$4.95/stock - $9.95/motif|
|Capital One Investing||$6.95||$6.95 (+$0.75)|
Investment Account Options
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 Tools & Tutorials
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.
One thing others have noted that is missing, however, is a forum or community of some sort where you can talk with other investors to get advice. Several other online brokers have something like that, and it would be nice to see Capital One add one for ShareBuilder as well.
Easy Linking To Capital One 360 Savings Or Checking
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 account if you have them. I personally already have an Capital One 360 Savings account (review here) and being able to easily link the accounts for automatic investments is nice.
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 lower cost option, someplace like OptionsHouse. 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.
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Derek Clark says
Berkshire actually split their B-Shares as part of the Burlington acquisition. You can get them for about $80 now. Just a heads up.
Peter Anderson says
Thanks for the heads up, I didn’t realize as I’m not investing in this myself as of yet. :) I read about how someone else was buying fractional shares of Berkshire B-Shares using ShareBuilder on another site, and didn’t bother to look into whether it was still selling for that amount. Here’s a news note on the Berkshire split.
I’ve been using ShareBuilder for a couple of years now. I actually used them for Berkshire fractional shares. Since the split I can say I own actual full shares now! Google on the other hand is still fractional for me.
I love that money transfers instantly between SB and Orange savings.