By Dan Hyde Updated: Interested in exploring the world of stock market investing for the first time ' or just looking for a cheaper and better way to invest? Anyone with enough spare cash can invest in shares via an online broker. If you get it right, there's potential to bring home the sort of profit that makes returns on savings accounts look like a handful of old coppers.

And although it was once the preserve of the super-rich or professional trader, then those who had their own stock broker, now the stock market is at the finger tips of anyone with enough an internet connection and the spare cash to make investing worthwhile. Take this simple example: Sounds a little better than 2. Although picking such a short-term profit is fiendishly difficult.

For decades, many a wisened investor has sworn by the adage that shares always outperform savings in the long-run. And the facts speak for themselves: UK shares managed to return an annual average of 7. But investing in stocks and shares is always a gamble ' as many have found to their peril ' because the markets work in strange and often unpredictable ways. For example, few would have forecast the FTSE would be at roughly the same level now as it was a decade ago. The key is to approach investing the correct way and with careful, informed judgement.

With this foundation, shares have the potential to earn you some of the juiciest returns that money can buy. But before you can do that you need a share dealing account and choosing the right one can make a big difference to your finances. So, whether you're fed up with puny savings rates and fancy a brave new financial venture, or you're just keen to brush up on your investment plan: It couldn't be easier.

Choices here are three-fold: A stockbroker is simply a company authorised to buy and sell shares on behalf of its clients. Usually, any dealings between you and your broker will take place by telephone or post. Traditional stockbrokers are most useful for the advisory services they provide.

This service comes at a cost, though, and is appropriate only if you require a large amount of help with your investment programme. As part of an advisory package, a broker will match its stock suggestions to your individual circumstances and portfolio. If you'd rather steer completely clear of all decision-making ' and have significant funding to do so ' brokers also provide a 'discretionary' service. This effectively means you agree an general investment strategy with a broker, then hand over total control over all share dealings to his or her expertise - but it comes at a high price.

Try our power portfolio for a money-free taster. An alternative approach is to explore the stockbroking services operated by your bank. Many banks have a dedicated brokerage arm, which is useful if you value keeping your finances streamlined. Some operate a traditional broker service, others offer a low cost no advice service.

An example here is the First Direct service, available to First Direct 1st Account holders only. Dealings often take place by telephone, but the internet is fast becoming the prefered choice across the board.

Cheapest-ever broker lets you trade shares for less than £2 - Telegraph

This service usually operates in a similar way to that provided by online-only brokers For most people, online stockbroking is the cheapest and best route into buying and selling shares. Online brokers operate on an 'execution-only' basis, meaning that the broker simply takes your order and 'executes' it for you.

This can make the whole process of stock market investing very simple. You sign up to an online broker's website, deposit some money into your new account, then pick the shares you want to buy.

The rest is taken care of ' money spent will simply be withdrawn from your pot each time. The simplicity means that you can be up, running and buying shares in a few hours. A Russian chimp has shown that anyone can make a mint from the markets. Usual procedure with online brokers is for your shares to be held in a nominee account.

All this means is that you don't receive share certificates or voting rights, ruling out the need for unnecessary paperwork. Other than that you own the shares, get paid dividends and so on. Like any service, online accounts command fees ' but these are usually much cheaper than the rates charged by traditional brokers.

And with the rise of the internet, there's a wealth of different options adn a lot of competition. Online brokers cannot legally give customers any advice.

This means that any decision making is entirely your own. However, tools - such as such as share-price graphs and company reports - are usually provided to make things easier. You can also monitor your portfolio with ease. Beware of rogue traders, falsely advertised as stockbrokers.

Read Tony Hetherington's investigation files to find out more. Before you dive head-first into the world of investing, use this checklist to make sure you pick the best account for your needs:. But charges also vary depending on how active you are, as most brokers offer a discount to their more frequent traders.

Many investors will not reach this, so make sure you evaluate your options carefully. Be aware that stamp duty currently 0. Secondly, consider administration charges. Some providers charge a quarterly account management fee while others, such as Selftrade, charge annually.

So check what functions the broker's website will provide in this regard. Does it offer extra charts, graphs, tips, and news - or must you go elsewhere? One option is to use our free, comprehensive and up-to-date market data, news and share tips more on this in 'How to make money out of shares ' below. Some also allow investments in funds eg OEICS and Unit Trusts , Gilts, Corporate Bonds and Investment Trusts.

Best Online Stock Brokers for - Online Stock Broker Reviews

If this is important to you, it's worth checking the details. Reinvesting does usually incur an additional cost, though, but can work out cheaper in the long-run.

Once you've decided on your needs, you should weigh up the services provided by the major online stockbrokers use links for further details. Some of the best rates come from smaller, less well-known dealers.

Best Online Stock Brokers For Cheap Trading | PT Money

As always, it is very important to read the terms and conditions carefully before you sign up to any of these accounts, because sometimes there are extra costs hidden behind what may otherwise seem a good deal. This is Money also provides a comprehensive sharedealing service in partnership with The Share Centre. And if you fancy a dry run, try our power portfolio for a money-free taste of investing.

A share price is like a barometer of investors' confidence in a company's prospects. If everyone thinks a company is going to grow and do well, they all want to buy the shares, and this pushes the share price up. Equally the reverse is true and low-confidence will send prices plummeting. Read our markets and investment section for tips and advice, trend predictions, and the latest company news. The value of your shares can fall at any time.

There are two main ways you can make money with shares. Firstly, you hope that the value of your shares will grow over time, which may or may not mirror the growth in the underlying company. This increase in value is called capital growth. The other way you make money from shares is through dividends. These are payments taken from profits the company makes to its shareholders, usually every six months.

If the company is doing well it may announce a big dividend; or if times are hard, it may not make a dividend payment at all.

The more shares you own, the bigger the dividend payment you receive. Essentially, it's important that you're fully clued-up at all times. It's worth considering subscribing to our new in-depth investment area, Midas Extra. This will help keep you ahead of the crowd, with exclusive weekly insights, expert tips, and guidance from the UK's leading market professionals. One attractive alternative to shares is investing in funds. This is a route often recommended to small investors by experts.

When investors talk about funds they are typically referring to either unit trusts, or open-ended investment companies, Oeics. These may sound complicated but they are essentially just funds where investors' money is pooled to invest in shares, bonds or other funds. The idea is that as the fund invests in lots of different companies' shares or bonds, the risk of you losing all your money is less than it would be if you were in a single company's shares.

Another option is investment trusts, but these are becoming less common. The crucial difference between them and unit trusts and oeics is that investment trusts are listed companies with shares that trade on the stockmarket.

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