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REDDIT

How to reduce the high costs of small regular ETF investments (Dollar Cost Averaging)

C
Apr 25, 2025 · 14:48


What's the most cost-effective way to invest small, regular amounts into a low-cost index tracker ETF—say, $500 per week?

Interactive Brokers charges a flat fee of $7–$9 per trade, no matter the amount invested. So, for a $500 trade, that works out to roughly 1.37% in fees each time. Over time, these costs would add up, obviously making weekly / monthly investments very expensive.

A way to reduce fees is obviously to invest larger sums less frequently. So, investing $7,000 in one go brings the fee down to just 0.11% of the total amount, which is clearly much more cost effective, but does not adhere to my notion of dollar cost averaging. I’d prefer to invest much smaller amounts over a longer period of time.

The advantage of Interactive Brokers is they offer narrow spreads, meaning you get more shares for your money.

Does anyone know of an alternative online broker that would be more cost-effective for smaller trades like $500, while still offering competitive spreads? A broker with zero commission isn't necessarily better if it comes with wider spreads.

Thanks !