Online share trading platforms make it cheaper and easier to buy and sell shares from Australia and overseas. You can use our stock broker comparison table below to compare fees and features and find the best deal for you.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Looking to start online share trading? There are a number of online platforms available, but it's important to compare them before you sign up.
This guide will teach you how online share trading platforms work, how you can make money from trading, what fees you'll pay and what all the investment terms mean.
How do online stock brokers work?
An online stock broker, allows you to buy, sell and trade online shares. In order to trade shares online, you'll need to sign up to an account. Trading platforms can be available on a website or app, and depending on the broker will let you buy Australian or international shares.
Many platforms also let you trade other types of investments, such as index funds, ETFs and more. You can also make use of online tools such as copying high-profile investors, in-depth research on stocks and easy access to data to inform your trades.
A huge benefit of trading shares online is that it's cheaper than a full-service stockbroker.
When you buy shares online, you'll pay a brokerage fee for each transaction, which typically ranges from $3 to $30 for ASX trades as opposed to $50 to $150 for full-service brokers.
What features should I look for with online stock broker platforms?
- Advice and research options. Online brokers sometimes offer market news and updates as well as other research tools that will let you investigate the trading history of individual stocks.
- Educational resources. If you're trying to learn how markets work or want some investing strategy, then educational resources can help.
- Bank account integrations. Some services let you transfer money easily from your trading account to a transaction or savings account. Others offer linked debit cards to use with your accounts.
- Access to Australian shares and global markets. Not all online platforms offer shares from every market. Check the platform lets you invest where you want.
- Investment options. Other products offered by some online brokers include forex, CFDs (contracts for difference), managed funds and options trading.
- Strong customer support. Check what level of customer support is available, what hours it's available and if the support team is based locally in Australia. This is particularly important for new traders.
How do fees work with online stock broker platforms?
- Broker fees. This is the fee that is charged every time you buy and sell shares. Brokers charge different fees depending on the product you're trading (for example, global shares, local shares and options), how often you trade in a month and the size of the trade.
- Monthly fees. Some brokers charge ongoing subscription fees or additional inactivity fees if you don't make any trades within a certain period of time. This may or may not suit you depending on your trading requirements.
- Foreign exchange fees. If you're interested in trading global stocks, you'll want to check what the foreign exchange (FX) fee is for converting your Australian dollars to the foreign currency of choice.
What can you invest in with an online stock broker?
An online stock broker lets you buy and sell assets on a number of exchanges including the ASX.
This means you can buy shares, ETFs, LICs, REITs, bonds, hybrids and options through a broker. Depending on the broker, you will be able to buy Australian assets or international. Keep in mind the more you trade the more you'll pay in most instances, with you paying a brokerage fee every time you trade.
Why invest in stocks?
Investing is an effective way to make your money work harder for you, especially in a low interest rate, high inflation environment. Smart investing allows you to grow your wealth and beat inflation. At the same time it comes with more risks.
Here are 5 reasons why you might want to invest:
- Diversify income streams. Investing can help you gain an additional revenue stream through dividends or share price appreciation (although you have to sell to realise these gains).
- Offset inflation. As you might've heard inflation has reached a 3 decade high. By default this means the money in your bank account buys less, reducing its impact. In order to beat rising inflation, you need your money to grow by more than the inflation rate. Shares can help with this.
- Compound benefits. Compounding is money on money. In the share market this occurs when an investment generates earnings that continue to grow through its share price or when dividends are reinvested. Over time this snowballs, so if you doubled a $1,000 investment 3 times it would actually be worth $8,000.
- Allows you to benefit as the country does. The stock market and the economy aren't always directly related, but a thriving economy usually translates into a rising stock market. Investors in the market directly benefit as corporate earnings increase or consumers spend more.
- Set yourself up in retirement. Unfortunately for most, saving for an adequate retirement is out of reach, even as banks lift interest rates. As such, successful investing can help you live the life you want in retirement.
How do you make money from shares?
Investors in shares are fractional owners of a business, meaning they will profit based on the future outlook of the business or by getting part of the company paid to them.
There are 2 main ways to make money from share trading:
- Capital growth. If you can sell your shares for a higher price than what you paid for them, you'll make a profit. This is known as capital growth, given that your initial capital (your shares) has increased in value.
- Dividends. Some (but not all) companies pay regular dividends to their shareholders based on the amount of profit they make, which can provide an ongoing income stream plus tax advantages for certain investors. Dividend payments are a great form of passive income and it means investors may never need to sell their shares in order to make a profit. Some companies offer dividend reinvestment strategies allowing you to increase your holdings by giving you more shares.
Tips for online stock trading
Here are some tips to help get you started:
- Read the news. It's important to stay up to date with the broader economy and learn how major events such as national elections impact the share price of various companies.
- Research companies before buying. If you want to buy shares in a company, research as much as you can about the company before making your final decision. It's a good idea to read the company's annual reports and meeting minutes to learn what's in the pipeline and what changes will be made that could affect their share price.
- Read books. Like most skills, investing can be taught. Many of the top investors have written books, meaning you can learn from some of the best investment minds.
- Upskill. It can be easy to lose a lot of money by making a poor investment decision or by simply clicking on the wrong button if you don't know what you're doing. Practise trading on a demo account first and consider taking an online investment course.
- Consider blue chip companies. This is a good strategy for people new to the share market, as blue chip companies often have more stable returns, are less volatile and often pay dividends.
- Diversify. Say you had $5,000 to invest in the share market. Rather than invest it all in one company, consider spreading it out across a few companies from different industries. Diversification will help lower your risk and ensure you don't have all your eggs in one basket.
Ask an expert: How do you pick the right stocks?
Many investors spend hours reading reports and studying charts to select the “right” share, only to disregard the most important factor – themselves. Every individual’s circumstances are unique. We all have different investment goals, amounts to invest, time frames, existing investments and risk appetites. All of these should be taken into account when selecting a stock.
An exciting new technology start-up or a promising medical research group might suit an investor with a higher risk appetite and many years of investing ahead of them. On the other hand, an investor in or near retirement might prefer a more stable, well-known business that pays a reliable dividend. It’s up to you.
How to sign up with an online stock broker
If you're looking to sign up to a stock broker you'll need to follow 5 steps:
- Find a broker
- Sign up to the broker and verify who you are
- Link you bank account to your stock broker
- Submit application
- Start trading
When you decide on trading, you have two main options - online stock brokers and full-service brokers. An online broker is cheaper than a full-service broker, but has the downside of having to do everything yourself. So you'll need to decide what works for you.
Is trading shares online safe? What are the risks?
As with any type of investment, there are risks to trading shares online. Some of the risks remain whether you trade online or not, for example, you can lose some or all of your investment. Other risks are with the online platform you choose to use.
Before you start using a platform, check whether the online broker has a good reputation and is a trusted provider in the community. There are several key details to look out for:
- Reviews. Find out other users' experiences with the platform by reading customer reviews.
- Experience. Find out how long it has been offering online share trading services. Is it backed by a large bank or financial institution?
- Encryption. Reputable online trading platforms rely on encryption technology to protect your sensitive information. This means that when you log in to a broker's website, no one will be able to see any of the information transmitted between you and the broker.
- Login information. Check out what information you will need to provide in order to log in to your account. While many providers only ask for a username and password, others may ask you to enter an additional security code.
- Online checks. Does the provider offer online checks and restrictions to reduce the risk of fraud? For example, do you receive an SMS code that you will need to enter before trading or do you need to answer an online security question?
- Previewing trades. When talking about online share trading security, it's also important to check that there are measures in place to prevent you from placing the wrong trade. For example, does the trading platform show you a preview screen outlining the full details of a transaction, such as the total cost and the total shares purchased, before placing a trade?
- Processes for dealing with fraud. Next, check to see what will happen if you're a victim of fraud via your trading account. Does the provider have processes in place to reimburse you for any losses you suffer through no fault of your own if you are the victim of fraud? Are there any exclusions to when this cover applies?
- Customer support. It's vital that if something ever goes wrong with a trade or you have a problem with your account, you can quickly access assistance from a company representative. Check to see when and how you can get in touch with the customer support team.
How to protect yourself when you trade online
- Watch out for scams. Just as online share trading technology has grown more sophisticated, so too have the methods used by scammers to trick people into giving up their account details.
- Keep your login details safe. This is an obvious tip, but one you should always remember. Never give your account login details to a third party and don't leave your computer unattended while you're logged in to your account.
- Keep a copy of your records. Keep a record of all your online share trading transactions. Your records could be in a digital or hard-copy format, but should always be stored in a safe place. This will ensure you have evidence to refer to if something goes wrong with your account or if you suspect you may have been a victim of fraud.
- Look after your computer. Make sure that you always keep your antivirus software up to date to protect your computer against malware and other viruses. In addition, check that you only ever log in to the trading platform via a secure internet connection.
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