Online stock brokers, like just about everything else online, have made things significantly easier than they used to be. Not that long ago, to make an investment you would have had to call your broker, identify which stock you wanted to buy, and then have them buy it. But online stock brokers changed all of that. They bring the full power of investing to the investor’s fingertips with a few clicks of a mouse.
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And not only did they make it easier, but they made it cheaper than it’s ever been. If you are interested in or planning to open a new brokerage account, you have come to the right place. In this article we will break down what an online stock broker is, how to pick the right broker, and provide a list of the top online brokers in the industry today. Opening an account with an online broker is a significant step in the right direction for any investor. Let’s make sure you’re opening the right one for you.
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TD Ameritrade
TD Ameritrade is coveted for its zero minimum account balance, commission-free ETFs, and standout research functionality.
In addition to these features, TD Ameritrade also has physical branches all across the United States in case you wanted to visit and sit down with a financial advisor.
Their trading commissions are $6.95 (excluding their commission-free ETFs), which is on the higher side compared to some of its competitors.
That said, TD Ameritrade offers a large range of investment options – from stocks and bonds to futures and forex trades – making them one of the more advanced platforms available to investors.
Their range of products, numerous commission-free ETFs, zero account minimum, and advanced research tools make them a top choice among both beginner and advanced investors.
Trading Commissions: $6.95 per trade
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Account Minimum: $0
Best for: Beginner and advanced investors; investors who want a suite of products and support
Ally Invest
Ally is one of the top discount brokers in the industry, with a zero account minimum, low commission fees of $4.95 per trade, and over 100 commission-free ETFs.
In addition to these standout features, Ally also offers a few advanced features like forex trading, options, and free research tools for technical traders.
While they only charge $4.95 per trade for stocks, purchasing a mutual fund will set you back $9.95 per trade.
This is steep compared to others and isn’t great news for retirement investors who want to add mutual funds to their IRA.
That said, if you don’t purchase mutual funds that often and use Ally for other investment accounts, the price is negligible compared to having all of your investments under a single roof.
Where Ally really shines is with day traders and those who want to take a more active approach to their investing.
With $0 account minimums, it takes literally nothing to get started and see what their platform and tools are like.
Add in some of the lowest trading commissions in the industry, and Ally makes push for one of the top low-cost brokers in the industry today.
Trading Commissions: $4.95 per trade
Account Minimum: $0
Best for: Day traders and technical traders; investors who are more active than passive
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Charles Schwab
Charles Schwab is a do-it-all broker who offers low trading commissions of $4.95 per trade, $0 account minimums, over 500 commission-free ETFs, and nearly 4,000 no-fee mutual funds.
Yes, their no-fee offering is massive and it is one of their main selling points. The no-fee ETFs and mutual funds make Charles Schwab a great choice for index investors and retirement investors.
These investors could build a complete investment portfolio without paying a dime in trading commissions.
Their low trading fee of $4.95 also speaks to stock traders and investors who like to be more active with their accounts.
In addition to these low commissions, Charles Schwab offers some of the best research tools in the industry and is routinely touted for their strong customer service.
It’s hard to knock Charles Schwab for much. They offer something for just about any type of investor, and really shine with their no-fee ETF and mutual fund offerings.
Trading Commissions: $4.95 per trade
Account Minimum: $0
Best for: Index and retirement investors; beginners who are looking for a rock-solid broker to get started with
E*TRADE
E-Trade comes in with a $6.95 trading commission and a $500 account minimum ($0 for IRAs), making them one of the more expensive options for some investors.
And while their trading fees are $6.95 per trade, there is a scale discount, meaning that more active traders receive discounts on this fee.
E-Trade offers two distinct platforms – E-Trade and Power E-Trade – that are free for all customers. This is one of the areas where they really shine.
The original and default E-Trade platform is packed full of useful research tools, independent analyst research, quotes, news, charts, retirement planning, and learning resources.
Most investors will use the default platform as it is plenty for anyone but advanced traders.
Power E-Trade is for the advanced trader looking to trade stocks, options, and futures.
This tool packs exceptional technical analysis, research, and market tracking tools for those who require them.
E-Trade also boasts an excellent selection of educational resources.
Using their website, investors can view webinars on trading or take investing courses from independent research companies like Morningstar.
Trading Commissions: $6.95 per trade (with scaling discount)
Account Minimum: $500
Best for: Active traders or beginners who want to use their educational resources to start learning about more technical investing with options and futures
Fidelty
Fidelity is an industry behemoth, the largest keeper of the nation’s 401(k) retirement plans, and has $7.4 trillion in customer assets.
They offer $4.95 trading commissions, $0 account minimums, and proprietary Fidelity Zero index funds which have no expense ratio and no minimum investment requirement.
Because of Fidelity’s massive amount of retirement assets, they maintain a strong reputation for their mutual funds and other forms of index investing.
But their brokerage arm has many of the same tools you’ll find at other top online brokers.
In fact, they are almost unmatched when it comes to their research tools. They offer stock research from 19 different providers, including analysts opinions.
Fidelity shines all across the board.
Their mutual funds and ETF offering is second to none, their trading commissions are respectable, their customer support receives some of the highest marks in the industry, and their commitment to lowering costs continues to save investors thousands of dollars.
It’s hard to find a better overall online broker than Fidelity.
Trading Commissions: $4.95 per trade
Account Minimum: $0
Best for: Retirement and index investors, investors who want a lot of options; beginner and experienced investors alike.
Robinhood
Robinhood is a one of a kind online broker offering $0 trading commissions, $0 account minimums, and access to stock, ETF, options, and cryptocurrency trades.
Their rock bottom pricing (read: zero cost to do business) does come at different price: a lack of research tools. Best Online Brokers for Beginners.
While every other broker on this list has an extensive amount of research tools available to customers, Robinhood’s base offering does not.
However, for $5 per month, you can subscribe to Robinhood Gold and access professional research from Morningstar and NASDAQ.
Robinhood stands out from the pack with their $0 trading commissions, slick mobile app, and cryptocurrency trading.
If you’re looking for the cheapest broker to do business with, you’ll want to consider Robinhood.
Trading Commissions: $0 per trade
Account Minimum: $0
Best for: Low-cost investors, cryptocurrency investors Read: