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ShareBuilder Review – Discount Broker For Long-Term Automatic Investing

By Chris Bibey

Limited Time Offer: Click here and sign up for Sharebuilder to get $50 free!

ShareBuilder is the perfect online brokerage firm for anybody who has never invested or for those who just want to keep things simple. While this industry is crowded, ShareBuilder has done a great job in differentiating themselves from the pack. I’ve been a loyal customer for 3 years and am going to explain why.

ShareBuilder is owned by the same company as ING Direct. For this reason, it may be in your best interest to open an ING Direct online savings or checking account. Why, you may ask? Well, you can link your ING account to your ShareBuilder account for easier, faster transfers.

What ShareBuilder Stands for

Before we get into the finer details, let’s talk a bit about why ShareBuilder has become so popular. They offer many features, but automatic investing is what has made the company loved by so many.

What is automatic investing?  Once you open your Sharebuilder account, you can choose your favorite stocks and mutual funds and set up a regular schedule of when you’d like to invest more money in them.  For example, you can automatically invest a predetermined amount every week or month – thus freeing up your time and building your wealth without too much of your attention.

ShareBuilder strongly believes that long-term investing is the way to go.  This is easy to see once you get started. To encourage investors to get involved for the long term, ShareBuilder offers low trade rates as well as the ability to purchase fractional shares.  So even if you don’t have enough money to buy an entire share, ShareBuilder allows you to invest.

sharebuilder

Select your Account

Before you can start investing you need to select your account level. Options include:

  • Basic. With this plan you do not have to pay a monthly fee. You will be able to make $4 automatic investments, which is among the cheapest online options.
  • Standard. This plan costs $12/month, but with this fee you receive six free automatic investments along with the ability to purchase additional ones at a cost of $2 each.
  • Advantage. This is the priciest plan at a cost of $20/month. You will receive 20 free automatic investments along with the ability to purchase extras for $1 each.

Opening an Account

One of the biggest benefits of getting started with ShareBuilder is the simple application process. With 10 to 15 minutes of time, you can have your account open and ready for investing. Just like with all financial accounts, you will need your contact information, social security number, and employer information.

Along with the above, you have the ability to choose what you will be using your account for: general investing, IRA, or for a child.

If you have any questions during the sign-up process, you can contact ShareBuilder’s customer service team. Based on first hand experience, I find them to be one of the best in the business. With long operating hours and short wait times, when you call ShareBuilder for help, you are going to receive accurate answers sooner rather than later.

Transferring Money with ShareBuilder

It is good to know that ShareBuilder offers many ways to transfer money into your account, including all the usual suspects such as check, wire transfer, and ACH. They also have an “Express Funding” feature that allows you to place an order and use funds from your bank account to pay for it. While this costs $5 most of the time, if you link an ING Direct account, it is free.

Time to Make a Trade

Obviously, the reason you joined ShareBuilder was to buy stocks and make trades. If you are interested in ShareBuilder’s bread and butter automatic investment plan, all you need to do is set this up and forget about it. Each month on the same date a predetermined amount of money will be invested.

In addition to automatic investing, you can also take advantage of real time trades, options and margins trades, ETFs, mutual funds, partial shares, and more.

Research Center

As noted above, ShareBuilder is geared towards those who are new to investing. This is why the research center is such a big deal. With the ability to screen and research stocks, you have a better chance of making the right investment decision. Along with this, you will find tools that track the top market movers, options trading, and a watch list among many others.

It is important to note that not all the tools and information in the research center are free. There are some premium tools that are only available to those with a Standard or Advantage account.

Notable ShareBuilder Features

Among the many features to list and discuss, here are some of the most important:

  • No account minimums.
  • No inactivity fees.
  • Automatic investing made easy, at a lower price.
  • Access to stocks, ETFs, mutual funds, and more.
  • Fractional share purchases.
  • No fee IRAs. With no custodial fees you can avoid the $30 or more per year that most online brokerage firms charge.

Overall Impression of ShareBuilder

I have been a ShareBuilder customer for three years. Over this time I have grown to love the company. Like many, my favorite feature is the automatic investing. This “set it and forget it” way of doing things allows me to invest without being hands on. Along with this, I must note again that ShareBuilder has a great customer service team. This is true no matter how you get in touch with them, phone or online.

I use the Basic plan as to avoid monthly fees. That being said, I can easily see why many investors upgrade to the Standard or Advantage package.

ShareBuilder has a lot to offer at a reasonable price. No matter if you are a beginner or have been around the block a few times, you can benefit greatly by becoming a ShareBuilder investor.

Chris Bibey
Chris Bibey is a freelance writer who over the years has honed his personal finance experience by writing more than 100 feature articles on the subject. In his spare time, Chris enjoys sports - West Virginia football in particular!

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Comments

  • http://madsaver.com Mac

    Sharebuilder is a good investment vehicle. I’ve been with them for a few years myself, but haven’t used them in a while…not that I don’t want to, just very little money to invest. Always loved the automatic investing though, makes things quite easy. And live trades are priced reasonably well too, in case you ever want to go that route.

  • Sherry B

    I’ve been using Sharebuilder for a about 18 months. My 23 year old son got me started. Before Sharebuilder I had never invested on my own. My portfolio is up 67% so far this year!!! I’m a VERY happy customer!

  • gina

    Something interesting to think about. I have not used Sharebuilder, mainly because I do not have much currently to invest (I am paying off debt right now). But I do like that it can be automatic–something that would be so useful to me!

  • Jeremy

    I think SogoTrade is pretty good. It only cost $3 to make a trade (unlimited shares). They have good online and phone support, quick execution and a good inventory of shares that you can short! Oh and you only need $500 to open your account. You also get 100 free trades when you open your account. You can also buy/sell options for 5$ + 0.65 per contract. Can’t beat that.

  • http://fundtips.blogspot.com/ Daddy Paul

    If I were to buy stocks again I would go back to Interactive Brokers. They have the lowest commissions. That said picking stocks is a game I do not wish to play and I would just as soon keep my money in no transaction funds from Fidelity.

  • http://madsaver.com Mac

    Never heard of SogoTrade or Interactive Brokers. $500 isn’t too bad to start out with, that’s doable. But one look at the Interactive site and I knew it wasn’t for me. Way too business-like, probably meant for big spenders, of which I am not. When I’m back in the black, I’ll check SogoTrade out, thanks!

  • JulesinLA

    Thanks for the clear, thorough and succinct information on SB!

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