I am a long term term investor who makes only 1 or 2 trades per year.
My first trade will be investing $1,000 in an index fund, probably
Vanguard, unless someone can explain why I shouldn't use them.

My criteria for a online brokerage account is: 
Lowest possible fees
Low maintainence (I just want to make my trade and forget about it) 
Reasonably easy to use web site
Company that is stable and is not likely to go out of business
Reasonable customer service should I have a problem
An account that I can keep long term and will serve me in 5-10 years
time should my investing needs change

I don't want to pay for value added services because I won't use them.
I am quite prepared to make alot of compromise on my criteria if the
fees are particularly low, or best of all, free.

Hi there,

Quick Answer: Scottrade

Because you are intending to trade infrequently, a broker that does
not charge inactivity fees is a good start. Of the large, known
brokers, this narrows the field down to BrokerageAmerica, Brown & Co.,
Merrill Lynch Direct, Muriel Siebert, Morgan Stanley Online and
Scottrade.

Of these we can dismiss two because they charge too much per order:
Merrill Lynch Direct ($29.95) & Morgan Stanley Online ($29.95).

Here is what I found out about the others:

BrokerageAmerica
================
http://www.brokerageamerica.com/index.php?section=productservices&subsection=investmentchoices
Market Limit order: $5/$10 (cheaper if you buy more than 1000 shares)
No-Load Mutual Fund (like Vanguard) order: $15
Other fees: 
http://www.brokerageamerica.com/index.php?section=productservices&subsection=feescommissions

Nothing on their site mentions how long they have been in business,
although I did find these, which indicate that BrokerageAmerica is
quite a new company:

"Mr. Sycoff founded Andrew Garrett, Inc., the parent company of
Brokerage America, in 1992".
http://www.brokerageamerica.com/index.php?section=aboutus&subsection=managementteam

"Mr. Camillo joined Andrew Garrett Inc., the parent company of
Brokerage America, as President and Chief Operating Officer in
November 2000".
http://www.brokerageamerica.com/index.php?section=aboutus&subsection=managementteam


Brown & Co.
===========
http://www.brownco3.com
Market/Limit order: $5/$10
No-Load Mutual Fund order: $5

Major downside: You'll need $15,000 just to open an account!
http://www.brownco3.com/visitor/account_qual.html


Muriel Siebert
==============
http://www.murielsiebert.com/
Market/Limit order: $14.95/$14.95
No-Load Mutual Fund order: $35
Other fees:
http://www.murielsiebert.com/html/siebertnet_commission_info.html

Ranked 2nd of all online brokers at SmartMoney.com, with the comment
"Site not compatible with some browsers. Our trades got stalled when
using Macs with Internet Explorer."
http://www.smartmoney.com/brokers/yourselfer/index.cfm?story=rankings

Their website says "Siebert has been in business and a member of the
New York Stock Exchange since 1967, longer than any other discount
brokerage firm"


Scottrade
=========
http://www.scottrade.com
Market/Limit order: $7/$12
No-Load Mutual Fund order: Free
Other fees:
http://www.scottrade.com/commissions.asp

You need a $500 minimum equity balance to be activated. At least 75%
of all trades need to be done on the internet.

In business since 1980, online since 1996, 160 branch offices.

Ranked 6th of all online brokers at SmartMoney.com, with the comment
"speediest service: E-mail replies averaged 15 minutes; reps answered
our calls on first ring each time."
http://www.smartmoney.com/brokers/yourselfer/index.cfm?story=rankings

Ranked 3rd at Gomez, based on overall cost:

"Scottrade appeals to active traders with its low commission schedule
($7 for online market orders, $12 for online limit orders) and its
active trader content -- streaming real-time quotes, intelligent
defaults to trade from holdings and quote screens, and time and sales
information. It is no surprise that this firm, which has branch
offices, continues to grow its account base while other firms
experience flat growth. Scottrade also provides clients with robust
investment selection tools such as stock, mutual fund and fixed-income
screeners, and third-party investment research from S&P."
http://www.gomez.com/benchmarks/scorecard.asp?topcat_id=3&item_id=409&itemclass=SCORECARDCATEGORY

------------------------
Based on your criteria, and the opinions of others found on the web, I
recommend the following online broker: SCOTTRADE, followed by Muriel
Siebert

Reasoning:

Scottrade fits all of your criteria
Muriel Siebert does as well, but costs more
BrokerageAmerica is cheap, but has less history than the others, and
is therefore more likely to disappear in the future
Brown & Co. require a deposit of $15,000

------------------------

I also found a paragraph within a BusinessWeek article that virtually
answers your question, (with an accompanying comparison table):

"Although no broker offers everything, Scottrade seems to have a good
balance between cost, products, and service. It charges only $7 for a
stock trade, and there's no transaction fee for some 1,738 no-load
mutual funds, including those run by some low-cost companies such as
Vanguard and T. Rowe Price, which normally don't participate in
no-transaction-fee programs. In addition, Scottrade levies no
inactivity fees and has no plans to add them, says Bruce Morton, the
company's marketing director. You can get help with a trade and other
information on the phone or at one of 185 walk-in offices, but
Scottrade does not offer financial advice."
http://www.businessweek.com/magazine/content/02_21/b3784601.htm

Comparison Table:
http://www.businessweek.com/magazine/content/02_21/b3784602.htm

Kiplinger.com have also rated brokers, but like SmartMoney, they
aren't basing their scores on your criteria:
http://www.kiplinger.com/php/brokers/2002/brokers.php3



Search Strategy:

Keywords used:
broker comparison
://www.google.com/search?q=broker+comparison&num=30

Google Directory Category used:
Online Brokers
http://directory.google.com/Top/Business/Investing/Brokerages/Online_Brokers/

Website I went directly to:
The Motley Fool
http://www.fool.com

I trust this answers your question. If any portion of my answer is
unclear, please ask for clarification.

Best wishes,
robertskelton-ga

This answer was excellent. The result was that I opened an account
with Scottrade with full confidence. Amazingly, I won't be paying ANY
trade fees or account fees which more than offsets the $12 I paid to
have this question answered.

I liked the through and logical approach to answering my question.

I will definately use this service again!

Maybe you do not need a broker.

If you primarily want the vanguard index fund, You should be able to
buy the shares in the Vanguard funds directly from Vanguard, without a
middleman.

However, if you have a broker, you do have a bigger world of
alternatives. For instance, you can buy index funds like QQQ
(Nasdaq-100) and SPY (S&P 500)
that are directly traded on a stock exchange.  This can be useful if
you are later in a hurry to get out -- because a traditional mutual
fund like Vanguard will only let people in or out at a price
determined at the end of the trading day whereas the exchange traded
funds can be sold instantly with a market order.