Investors should know the best online brokers to trade with. Some online stock brokers are known for their award-winning customer service while others are known for inexpensive stock trades or powerful trading tools. This guide will highlight some of the best brokers available today with tips and advice for choosing a broker.
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Here are some of the online brokers that offer investors the most value for their portfolios.
1. TD Ameritrade
Stock Trades: $6.95 | Option Trades: $6.95 + $0.75 per contract | Minimum Deposit: $0
Current Offer: Trade free for 60 days + Get up to $600
TD Ameritrade was ranked #1 Broker Overall 2019 by StockBrokers.com* with its $6.95 stock trades and became the first broker to support 24/5 trading (24 hours a day, five days a week). Its platforms (thinkorswim was #1 desktop platform), tools, mobile apps (Mobile Trading was #1 Trader App), research, customer service (#1 for phone support), and education (#1) are all award winning. Full review.
Stock Trades: $4.95 | Option Trades: $4.95 + $0.65 per contract | Minimum Deposit: $2,500
Fidelity is best known for its value driven customer experience. Regular stock trades are just $4.95 each and Fidelity was rated #1 for order execution quality, which drives down trading costs even further. Beyond cost and ease of use, Fidelity also finished #1 for research tools. It’s Viewpoint articles are top of class and Fidelity is the only broker to offer 12 third-party research reports for individual equities. Full review.
Stock Trades: $6.95 | Option Trades: $6.95 + $0.75 per contract | Minimum Deposit: $500
Current Offer: Trade Free for 60 Days & Get Up to $600
E*TRADE shines for its Power E*TRADE platform for options trading alongside its mobile apps. Power E*TRADE has been rated the #1 platform for Options Trading the past eight years. E*TRADE was also rated #1 for Mobile Trading in the StockBrokers.com 2019 Review*. Like TD Ameritrade, E*TRADE charges $6.95 per trade but offers a reduced rate of $4.95 (options $4.95 + $.50 per contract) when placing at least 30 trades per quarter. Full review.
4. Merrill Edge
Stock Trades: $6.95 | Option Trades: $6.95 + $0.75 per contract | Minimum Deposit: $0
Merrill Edge is the online investing arm of Bank of America (BofA), which is open to all investors, regardless if they are a current BofA customer. Thanks to its Preferred Rewards program, investors can get 30 free equity trades per month with a $50,000 three-month average combined balance, and 100 free equity trades per month with a $100,000 three-month average combined balance. Other rewards perks include credit card bonus cash back, savings interest bonuses, priority customer service, and more. My wife and I have personally been using the program since it launched in 2014 and I have yet to pay for a single stock trade. It’s awesome. Full review.
Stock Trades: $5.00 | Option Trades: $5.00 + $0.50 per contract | Minimum Deposit: $500
Current Offer: All-New Pricing. Now Only $5/Trade + No Software Fees
TradeStation offers one of the most advanced desktop trading platforms in the industry. With its competitive commission rates for stocks and options trading, investors who have previous market experience will find themselves right at home. TradeStation’s target customers are traders that seek highly-customizable trading tools. Full review.
6. Ally Invest
Stock Trades: $4.95 | Option Trades: $4.95 + $0.65 per contract | Minimum Deposit: $0
Current Offer: Up to $3,500 cash bonus + commission free trades for new accounts
Ally Invest offers investors $4.95 stock trades and banking services through Ally Bank. Despite having an easy to use platform, from my experience, unless you are already an Ally customer, you will find that there are better offerings available like TD Ameritrade and Fidelity above. Full review.
Tips for Choosing a Broker
Having the best stock broker to serve individual needs is very important for any investor. For example, cheap trades most often come at the expense of less research tools and a more simplified trade platform. Consider these 12 key factors to help compare all stock brokers and ultimately find the best broker to suite your needs.
1. Trade Commissions
What does it cost to buy shares of stock? Does the fee change based on the type of order or size of order? To keep it simple, look for brokers that offer flat-fee trades, ie charging a flat rate regardless of the type, price of the stock, or size of the order.
2. Customer Service
When picking up the phone or emailing a broker, is a well trained customer service representative ready to assist? How any investor is treated as a client is more important to some than others. But, even for those that don’t rely on customer support that often, to know that they have award winning service there when they need it is comforting.
3. Trading Tools
Trading successfully is a lot easier when investors have great tools at their disposal. A top stock broker should offer access to a wide variety of trade tools to help make the most of each and every trade. From real-time streaming quotes to last sale tickers, quality stock scanners, mobile trading apps, and level II quotes to name a few. Strong tools are essential for active investors.
4. Account Minimums
Some brokers allow you to open an account with no minimum deposit while others may require several thousand dollars. Also know that some brokers require higher minimums to gain access to premium platforms, functionality, and personalized support.
5. Market Research
A good online broker will provide a variety of market research tools. The rule of thumb here is simple: the more you pay per trade, the better the market research (both fundamental and technical) that is provided.
6. Investment Options
A online stock broker should offer access to not only trading stocks, but also a strong selection of no load mutual funds, commission free ETFs, and complex options. Other unique investment offerings to look for could include direct market routing, conditional orders, futures trading, and forex trading.
5. Other Fees
Fees beyond trade commissions include inactivity fees (common with active trading brokers such as Interactive Brokers, Lightspeed, and TradeStation) and IRA fees for having a retirement account. While most brokers do not charge predatory fees, it’s still important to do your due diligence. Just like a bank account, stock brokers also make a portion of their profits off miscellaneous fees.
8. Retirement Accounts
Funding a IRA, Roth IRA, or other retirement account with no annual fees is an extra perk many online brokers offer. There is no reason why you should pay an annual fee to have an retirement account. If managing your own portfolio is not of interest, all full-service brokers offer optional advisory services as well. Furthermore, robo-advisors such as Betterment are growing in popularity. Once again, the experience at larger established brokers is going to be superior to smaller brokers.
Larger online brokers offer banking and other financial services. This goes beyond money market accounts and CDs. Checking accounts, mortgages, debit cards, and credit cards can also be offered. The leader in this space is, hands down, Bank of America, Merrill Edge.
10. Account Security
Because of the web today, all online brokers invest heavily into account security. SSL websites (look for “https” at the beginning any URL) are used by most brokers and some are now even offering two-factor authentication (using your phone to confirm a code before logging in). Just like shopping online and choosing a trustworthy website to purchase from, the best bet is to choose a well-known, established broker for your portfolio.
11. Speed & Order Execution
For the active trader, execution speed and fill price are very important. I won’t get too in depth here but I have tested many of these brokers and there can be noticeable differences in trade execution times and quality. For the majority of investors, saving a penny per share on a 100 shares order isn’t the end of the world, but for active traders it is something to look into. To understand Order Execution, read this guide.
12. International Trading
For investors in the United States this is not a problem but for investors living outside the US, when comparing brokers it is important to make sure they offer service in your country. Here’s a good list of international brokers to start with.
Best Stock Brokers Summary
|Recommended for||Online Broker||Trade Cost||Rating|
|Traders||TD Ameritrade||$6.95||5 Stars|
|Free trades||Merrill Edge||$6.95||4.5 Stars|
|Day Trading||TradeStation||$6.95||5 Stars|
|Options Trading||E*TRADE||$6.95||4.5 Stars|
|Commission Free Funds||Charles Schwab||$4.95||4.5 Stars|
|Banking||Merrill Edge||$6.95||4.5 Stars|
Questions & Help Choosing a Broker
If you need help deciding which broker to choose or have a broker specific question please feel free to email me and I will be happy to help.
To view star ratings, summaries, screenshots, and more for these brokers, see our stock broker comparison tool.
Also, if you feel this guide was helpful for you please share it on Facebook, Twitter, Google+, or email it to a friend. This took many dozens of hours to put together so I appreciate your support!
* – The StockBrokers.com 2019 Online Broker Review included 16 brokers whom were each assessed within nine primary categories: Commissions & Fees, Customer Service, Platforms & Tools, Research, Ease-of-Use, Offering of Investments, Education, Mobile Trading, and Banking.
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