Updated on May 31st, 2022
Originally published on August 1st, 2019 as a guest contribution from Benny Emerling at Benzinga.
If you are an investor looking to trade dividend-paying stocks, you are at the market risk of the stock prices uncontrollably rising and falling. This is why finding the best brokerage for your needs is of utmost important to your financial wellness.
The greatest appeal to investing in dividend stocks is that no financial analysis or complicated strategy is required. All you need to do is purchase your desired share of the stock before the ex-dividend date, then you can sell the shares on the ex-dividend date or any time afterwards. The ex-dividend date is the day the stock price often drops in accordance to the dividend amount.
This will allow you to increase your portfolio without any harm to your savings accounts. If you are a new investor, start with just purchasing a few stocks. If they’re dividend stocks, you can re-invest the dividends hold for the long run, and buy more stock at any time.
Dividend Investor Brokerage #1: Charles Schwab
Charles Schwab gives you access to high-tech trading tools, but there are also low fees, a range of investment options and highly rated customer service. The investment platform works online and through mobile applications, letting investors buy and sell securities, manage accounts, access research, enter transfers and evaluate a wide range of investment options.
There are also several options for commission-free ETFs and mutual funds from the Schwab fund family and Schwab’s Select List. Schwab offers $0 commissions on online trades. If you’re looking to avoid ATM fees, the Investor Checking account from Charles Schwab is also a great option. The mobile checking deposits compatible with Apple Pay and Google Pay.
This bank offers no foreign transaction fees for using your debit card overseas, making it great for the frequent flyer. This gives you access to ATMs anywhere in the world, automatically reimbursing you for charges from outside banks worldwide. This account also comes with extra rewards such as no monthly fees, automatic transfers to avoid overdrafts, making it a worthwhile investment for you.
Dividend Investor Brokerage #2: Ally Invest
If you’re a beginner looking to invest, Ally is a great low-cost brokerage also at $0 online trades. There are low commissions and automated investment plans making Ally a great starter-pack for those first starting their portfolios.
Even without the discount, Ally’s standing pricing and wide array of investment choices make it a competitive option for brokerages for dividend investors. This includes foreign currencies as well. If human contact is important to you, then Ally Bank Interest Checking could be the most viable option for you. Their customer service is accessible 24/7, so you will always have someone to guide you through any problem with your banking activity.
They are also very ATM fee-friendly. Lastly, they don’t require a minimum balance on your account, making it a great tool for beginning investors.
Dividend Investor Brokerage #3: Merrill Edge
If you’re looking to get the most rewards out of your brokerage, Merrill Edge is the best option for you. The brokerage, which is part of Bank of America, gets its name from Merrill Lynch, which has a long history of being on Wall Street, since 1914.
Today, Merrill Edge is a discount brokerage of Merrill Lynch/Bank of America, giving its users the ability to participate in the Bank of America Preferred Rewards program. This includes discounts and interest rate boosts, no-fees at other bank’s ATMs, waived monthly maintenance fees and great customer service. This is a hand-on sense of investing in brokerage accounts, so it appeals more to the seasoned investor.
Dividend Investor Brokerage #4: Robinhood
Robinhood is the best option for free trades, as it is one of the only brokerages that will let you access unlimited free stock trades for as long as you’d like. However, there are not as many options for features, investment tools and a limited scope of investment choices.
But you can trade for free, including cryptocurrency trades, such as Bitcoin and Ethereum. Robinhood is primarily a mobile trading service, but it is available online as well. While the investments are limited, it may be worth checking out for the free trading options.
The downsides of this option to consider are there are no retirement accounts, mutual funds or bonds.
Related: 16 Robinhood Alternatives to consider.
Dividend Investor Brokerage #5: Etrade
If you’re looking for multiple investment choices, Etrade is one of the oldest and most reliable platforms. Like many of its competitors, Etrade has moved to $0 online trades for U.S.-listed stocks, options and ETFs.
Etrade works on the web, or on their app. If you’re an active trader who likes to see thorough research before investing, Etrade is a great option. Or, if you’re a beginner trader than you can leave the investing to them by creasing customized managed portfolios.
By opening an account, you can put your money in stocks, bonds, ETFs or mutual funds. Other than brokerage, Etrade also offers IRA, small business and banking accounts. This is an easy to navigate platform.
Dividend investing can be a good strategy to grow your investment portfolio over long periods of time, by collecting stocks that pay high dividends or have fast growing dividends. For investors interested in dividend investing, we hope this guide can help you pick from the best brokerages depending on your investment needs, be it rewards, low prices or a wide range of investment options.
The following lists contain many high-quality dividend stocks:
- The Dividend Aristocrats List is comprised of 65 stocks in the S&P 500 Index with 25+ years of consecutive dividend increases.
- The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
- The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
- The Dividend Kings List is even more exclusive than the Dividend Aristocrats. It is comprised of 38 stocks with 50+ years of consecutive dividend increases.
- The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
- The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
- The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
- The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500.
- The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.