Investing the Easy Way with ShareBuilder

At some point in your life you will need to start investing for one thing or another, whether it be your children's college fund or if you are saving for retirement, you will need to start putting some money a way and get a decent rate of return for your money. In order to start investing, you will need some sort of brokerage account. You can do this through a traditional bricks and mortar investment company or one of the new online firms that have come forth in the last decade. Recently we tried out one of the services for the non-professional investor, called ShareBuilder.

ShareBuilder has been around for ten years now and is a rather unique investment company. It is geared at those who do not have a great amount of money to start investing or do not know a great deal about the subject. The entirely web-based company allows you to purchase partial shares of stock, which are known as iShares. This way customers can invest in companies with high stock prices such as Google without paying nearly $500 for one share of the company.

The company offers six different account types. The first one is a standard individual account for one person. The second is a joint account which is shared by two adults, usually a wife and a husband. Both Traditional and ROTH IRAs are available. Sharebuilder also has Educational Savings Accounts to help save for your child's college, and it also has a custodial account, which is an account that parents invest for the benefit of the child.

Setting up the account was quite easily. You enter some simple contact information, and setup the ability to transfer to your checking account, and it's done. Whenever you want to deposit some money into your ShareBuilder account, all you have to do is go to their website and you can electronically transfer funds from your checking account. Investing was rather easy, but if you don't use their automatic investments, the fees are above average.

One of the major features on the website is automatic investing where you can designate a certain dollar amount every month to be invested in a mutual fund. Each investment costs $4, which is rather inexpensive. However if you want to invest in more than one mutual fund or stock per month and do not invest a great amount of money, it can get rather expensive on a percentage basis.

One nice feature of ShareBuilder is its automatic money market investment. Whenever you have funds in your account which are not being used as part of a mutual fund or stock, those funds will be automatically put into a very safe money market account which earns about 4.5%. Unlike many other online money market accounts, Sharebuilder does not limit you to 6 transactions per month, which is quite limiting if you have multiple sources of income.

The one criticism about the company is that it gears it self to the non-professional investor who does not have a great deal of knowledge about the subject, however it provides very little information that attempts to each its customers how to choose investments wisely.