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Live Off Dividends

Which brokerage is the best for dividend investing?

Updated: Dec 3, 2023


Dividend Broker

This question is a really hard one for many out there because it isn’t easy to change after a month or two if you don’t like it. It isn’t like changing your e-mail address so better take your time and choose wisely!


Unfortunately, there is no brokerage that could fit everyone but I will guide you a little bit on which can be the best for dividend investing.


Let’s begin


Why do you need a brokerage account? These firms are the connections between us investors and the stock exchange. Only through them is possible to buy ETFs, stocks, and so on.

The first important question is, what is your goal? - Speculative trades, short trades? - Long-term investing? - Stocks and futures to buy?

Side note: Be aware of brokerage which is promoting themselves everywhere and wanna give bonuses to join them and so on. Normally there are hidden costs that will reveal themselves later on.


I prefer to choose a brokerage outside of my country. - More stocks and ETFs to choose - More likely to find cheaper fees - Better platforms and better diagrams/charts that you can draw with their website/app


What to look for about the brokerage


- What do they offer? I mean do they offer only access to the American stock market or also to the European and Australian for example? How about the ETFs?

- In which country do they have their headquarters? It is good to know which language we have to use if we have any trouble with the firm and secondly what about the investor protection fund? We have to have good trust in the company and the country. There were already many troubles throughout Europe with brokerages that’s why take a look at how much is the company’s investor protection fund per person.

- Other things to take a look at: How old is the brokerage? Do they have many trustworthy old customers? Do they have a bank in the background?

- Do they offer different tools for the investors to work with?

- Maybe something to study from?


This was about the basics. What else do I find interesting when it comes to dividend investing:


- No account management fee. It is important when you want to leave it alone to just grow your portfolio from dividends and not buy stocks/ETFs or deposit cash.

- Obviously the overall buying fee/transaction.

- When you want to withdraw money from your account it has to be also free.

- Crediting dividends has to be also free.

- Inactivity fee zero for the same reason as the account management fee.

- Investor Protection Fund


So what have we got?


I live in middle Europe so will compare and write a few words about the brokerages which are available for everyone in Europe. Focusing on dividend investing!

Dividend Investing Brokers

Just a few closing words but not about all brokerage accounts...


1. Tradestation US

Founded in 1982, insured by the protection fund up to 500.000$, a bit expensive but if you have a massive portfolio then it is better to put your money into a brokerage like this for the protection that you get with them.

2. Saxo Bank

Founded in 1992, a Danish Investment Bank has a very wide product range, is expensive, and is not for beginners.


3. Tastyworks

Inexpensive American brokerage with the $500.000 Protection Fund, a clear and simple platform.


4. Etoro

It aims the beginners mostly, Cyprus Stock Exchange Authority, the NOT trading fees could be expensive.


5. Interactive Brokers

One of the famous brokerage firms. They removed the inactivity fee and the minimum starting amount so it can be a perfect lifetime brokerage account, a strong company after all.


6. Lynx, Captrader

They are like small brothers and sisters from Interactive Brokers, service comes from IB.


Closing Thoughts


As I said the perfect brokerage doesn’t exist. Everybody wants something different, and it depends on goals and situations.

Choose a brokerage account where you can accomplish your goals cheaply. I personally use Captrader because I wanted to have an international account and not a Hungarian, I think my money is safer out there with that background.


I opened my account there because at IB there was still the minimum starting amount and the inactivity fee that’s why I chose Captrader.

I would consider also Etoro if you are comfortable with the Cyprus Exchange Authority and for the bigger guys, Tradestation would be a good idea with that Investor Protection Fund.

 

Hope this was useful for you! If so, hit the like button to make me feel good. Please note that the above content is not investment advice and shall be considered only for informative purposes.


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