Update: ShareBuilder is now known as Capital One Investing. Capital One purchased the US assets of ING Bank, which included ING Direct (now Capital One 360), ShareBuilder (Now Capital One Investing), and ING Direct Business (now Capital One Spark Business). Much of this review is still current, but now reflects the Capital One Investing brand instead of ShareBuilder.
Several people have asked me how ShareBuilder compares to some of the other online brokerages, such as Ally Invest (formerly TradeKing) and TD Ameritrade. ShareBuilder is consistently rated in among the top online brokerages and this ShareBuilder review should give you a good idea about the pros and cons of investing with ShareBuilder.
ShareBuilder is owned by the same parent company that owns Capital One 360, one of the most popular high yield savings accounts. One of the nice features about this is the ability to link your Capital One 360 account with your ShareBuilder account. But more on that later. Let’s jump into what makes ShareBuilder an attractive option.
ShareBuilder’s claim to fame – automatic investing
ShareBuilder is unique among discount brokerages because they promote automatic investing more than day trading. The folks at ShareBuilder believe the path to wealth is by growing your shares through long term investing, automatic investments, and dividend reinvestments, not short term investments or day trading. To encourage automatic investing, ShareBuilder offers very attractive rates for automatic trades and also allows fractional share purchases, so every penny of your investment goes toward purchasing the stock.
Select your ShareBuilder account level
ShareBuilder has 3 plan options for customers. They are the Basic Plan, the Standard Plan, and the Advantage Plan. The Basic plan is free and offers $4 automatic investments, which places ShareBuilder among the least expensive options among online brokers. The Standard Plan costs $12 per month, and offers 6 free automatic investments an additional automatic investments at $2 each. The Advantage Plan is a little pricier at $20 per month, but offers 20 automatic investments with additional investments for $1 each.
Real time trades and options trades cost the same regardless if which ShareBuilder plan you choose. ShareBuilder also offers a free trades for a wide variety of ING owned mutual funds.
Here is a quick breakdown of ShareBuilder plan options and pricing. For more pricing information, visit the ShareBuilder home page.
|ShareBuilder Price Plan||Basic||Advantage|
Included with Program
20 per month
|Real Time Trades||$6.95||$6.95|
+$.75 per contract
+$.75 per contract
Opening a ShareBuilder Account
Opening ShareBuilder account account is easy and only takes about 10-15 minutes. You will need to have the standard information required to open any financial account, including identification, address, SSN, employer information, trading experience, financial information, etc.
Transferring Money and Making Trades
Transferring money. ShareBuilder offers the usual money transfer methods, including ACH, wire transfers, checks, etc. ShareBuilder also offers Express Funding, the option of placing a real-time order and transferring funds from your bank account to cover the cost of the trade. The Express Funding service costs $5.00 per trade, but is free if you link your ShareBuilder account with the Capital One 360 high yield checking account (you can link your Capital One 360 savings, checking, and ShareBuilder accounts). This is a great option compared to some brokerages where you may need to wait 5 days to have access to transferred funds.
Making Trades with ShareBuilder. Trading on the ShareBuilder platform is easy and intuitive. It is easy to set up automatic transfers to your brokerage account and set up automatic investments. ShareBuilder also offers the full range of brokerage services in addition to automatic investing, including real time trades and real time research and information, options and margins trades, mutual funds, ETFs, Dividend reinvestments, partial share purchases, and more.
ShareBuilder’s Research and Education Center
Research. ShareBuilder has quite a few research tools available, however, it must be noted that some of them are Premium Tools which are only available to account holders who have the Standard or Advantage accounts. At $12 and $20 respectively, I decided not to sign up for them (once you leave the Basic Account, you cannot go back). Some competitors, such as TradeKing, make all of their resources available to all account holders without additional fees. One of the more fun tools to play with is the “What If You Had Invested” tool. It allows you to play “what if” scenarios with your portfolio. Of course, this doesn’t help your portfolio now; it’s just fun to play with. Other research tools include tools for screening ETFs and stocks, options trading tools, watch list, market movers, and more. Education. The ShareBuilder education center is basic, but effective. The main topics include beginning investment courses, types of investments, retirement, taxes, and investment advice.
Manage your taxes with GainsKeeper
ShareBuilder offers GainsKeeper to track your realized and unrealized gains and losses. GainsKeeper also tracks all your trades so you can maintain your investing records. The Gains & Losses tool allows you to export your tax related gain/loss data into a TXF formatted file, which can be easily imported into popular tax preparation software packages such as TurboTax and H&R Block Online. You can also export your gain/loss data into an Excel file or a text file, which can be imported into Quicken and some other programs.
Other features at ShareBuilder
- Mobile apps. ShareBuilder offers customers the opportunity to trade and check their account balances via their smartphone or tablet.
- No fee IRAs and ESAs. ShareBuilder does not charge IRA custodial fees or fees for Educational Savings Accounts, or Coverdell ESA. This is a new feature as of November 1, 2008, and applies to all IRA accounts held at ShareBuilder. Many brokerages charge $20-30 per IRA account, which can add up quickly!
- No load, no transaction fee for ING Mutual Funds. All ING Funds have low management fees and are free to trade within ShareBuilder.
- No account minimums and no inactivity fees.
- Automatic investing at discounted rates.
- Access to mutual funds, ETFs, and options trading.
- Dividend Reinvestment Plans (DRIPs) and fractional share purchases.
- Free education and research section.
- Tax management software.
- Money Market Cash Account. ShareBuilder offers a money market account where you can store your cash when you don’t have it invested in any equities.
- Excellent customer service.
How Does ShareBuilder Compare to Similar Brokerages?
ShareBuilder Review – My Final Thoughts
ShareBuilder is a no frills, no non-sense brokerage built primarily for people who want to automatically invest into the same stock or fund. And at $4 per trade or less, ShareBuilder is a good vehicle to use for managing your investments. The no load, no transaction fee ING Mutual Funds are another great benefit of using ShareBuilder for your investments, as is the ability to link your ShareBuilder account to your Capital One 360 account. ShareBuilder is also good for people who invest via DRIPs because you can purchase and own partial shares through ShareBuilder. However, ShareBuilder is a less attractive option for people who like to make frequent real time trades. It is not difficult to beat ShareBuilder’s $6.95 real-time trades – just look to Ally Investing at $4.95.