If you’re looking for a Forex broker, you may have noticed that there are multiple account options out there. Some brokers may stick with Standard/Classic accounts, while others may offer these in addition to Mini/Micro/Cent accounts, Premium accounts, VIP accounts, or even tier-based accounts (Silver, Gold, Platinum, etc.). The exact names may differ, but most accounts fall into one of three categories: Mini/Micro/Cent, intermediate (Standard, Silver, etc.), and VIP/Premium accounts.
Starting Deposit
The size of your initial investment plays a huge role in the type of accounts that you will have access to. Most brokers set an initial deposit requirement for each of their account types, which could be from $5 to $100,000, or more. Here’s a quick overview of what you should expect:
- Smaller accounts, like Mini, Micro, or Cent accounts, should require smaller deposits of around $100 or less. You should never have to pay $500 or more for one of these accounts.
- Mid-level accounts, like Standard/Classic accounts, or possibly Silver, Gold, etc. can also offer starting deposits of $100 or less, although these accounts often require at least $100 or more to get started. This could even go towards the $500 range, or higher for tier-based accounts.
- The best accounts offered are usually VIP or Premium and initial deposit requirements typically fall in the category of thousands of dollars, or even into the hundreds of thousands of dollars.
Entry-Level Accounts
Mini/Micro/Cent accounts restrict the trade size to around 0.01 lot (one micro lot), which helps to control the risk factors on those accounts. The smaller trade sizes and lower starting deposits can be good for beginners, but these accounts aren’t without their faults. Most brokers don’t offer benefits to these account holders, and you can expect to see higher spreads on smaller account types.
Mid-Level Accounts
If you’re trading with a good broker, it is possible to find some benefits and nice spreads on a typical Standard or Classic account. Of course, any more expensive account offered by the broker will likely have more advantages, but this is a good place for novice traders to start, especially if you don’t have a ton of capital to invest. Many brokers offer deposit bonuses and other perks to these account holders.
VIP & Premium Accounts
These accounts are the best of the best. Traders get the most benefits, best spreads, and lowest commission rates. The downside is that the deposits required on these accounts are often extremely high, placing them out of reach for many entry-level and even intermediate traders.
Choosing the Best Account Type
Before choosing your brokerage account, be sure to take the following things into consideration:
- Figure out how much you’d like to invest and do some comparing to see what that will get you. $100 might get you a Micro account with one brokerage, while it could get you a Standard account with better spreads through another.
- Always check the spreads and commissions associated with each account. Average spreads fall into the 1.5 pip range. VIP and Premium accounts will often offer much lower spreads, but you’ll need to pay closer attention to smaller and mid-level accounts.
- You will need to check the minimum and maximum trade sizes for any account you’re considering. Most Mini/Micro/Cent accounts offer a minimum trade size of 0.01 lot with lower maximum trade size. Some high-tier accounts require a minimum trade size of one lot.
- Check leverage options for any account you’re considering to be sure that options are suitable for your trading style. Accounts with lower deposit requirements usually offer the highest leverage options with brokers.
- Know that some advantages shouldn’t be based on account type. For example, fee-free withdrawals are offered by many brokers, but some may only offer this to VIP account holders while forcing lower-tier account holders to pay large withdrawal fees.
- Remember to look at other factors of any broker you’re considering. Available funding methods, fees, educational options, and other important factors will affect your experience, regardless of how good of an account you’ve chosen.
Conclusion
Choosing a live account is an important decision, as it will undoubtedly affect your profits and trading opportunities. You’ll need to figure out how much you have available to invest and do some comparing to find the best brokerage and spreads possible. As you move up in your Forex career, you will likely be able to afford better account types or to advance to higher tier levels if your broker operates on a tier-based system. Once you’ve considered deposit requirements, leverage, trade sizes, spreads, commissions, and other factors, you’ll be ready to choose an account type and get started trading.
