BrokerInvesting or trading in stocks would usually require the help of brokers to manage the different trading transactions. The increase in investors during the recent years has led the demand for brokers as well as the competition between them grow along the way. This has further led to many of them going online and sometimes offering their services at discounted rates that many investors find very appealing.

But what many investors might not know about is that what such discount brokers offer as drop down rates isn’t always the deal that investors get most of the time.

The usually advertised discount costs or rates usually come with certain conditions, some of them of which investors may not learn about until later on. Here are some of the things that many discount brokers may not be telling you outright.

Hidden Fees

Discount brokers may tell people that their services are provided at very low rates or commissions. But that is just one of the ways that these brokers earn their money. They sometimes also include charging certain fees along with their advertised rates. Here are some of the other more popular hidden fees that many discount brokers offer.

Inactivity Charges

Some brokers may charge clients for not actively trading. Brokers make money when there is some trading going on. Inactive accounts may hamper their ability to earn through commissions because of lack of trades.

There are online brokers that may charge from as little as $3 to as large as $100 for inactive accounts. Buy and hold investors should try to take a careful look at these charges before they consider getting the services of such brokers.

Annual Maintenance Fees

Many brokers now charge smaller investors annual maintenance fees on their accounts, especially if they don’t trade frequently. The annual maintenance fees are charged usually to accounts falling under a certain asset value.

Account Transfer Fees

If you so decide on transferring your account somewhere else, some brokers may also be charging fees in case you do that. Most of the time, brokers would not like you to transfer your business somewhere else. Fees such as this aims to discourage you from doing so.

Paper Statement And Confirmation Fees

There are also other broker who charge clients for requesting mailed paper statements and confirmation .

Different brokerage firms usually charge such fees differently. But surely, most investors would not know about them the first time they see the ads about the brokers. What will get the attention of the investors is the very low rates and commissions they offer for their services.

But this is usually just the top of it. Investors should be more careful in determining the right broker for them. This means doing some research and knowing more about what such brokers offer aside from those being advertised. A closer look would usually give investors more information that will help them decide wisely.