The 8 Best Online Stock Brokers of 2020
We know just what institutions can help set you up for financial success
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If you want to manage your investments, the best way to do so today is with an online stock broker. There are a handful of really good stock brokers to choose from, so knowing which is the best for your needs may be a challenge. Some things you should take into consideration before you lock one in are fees, research, trading platforms, account options, customer service and investment choices. Luckily, The Balance team reviewed some of the best online stock brokers to help you find the right one for you.
Schwab takes the spot as the best overall online stock broker. Thanks to low fees, high-tech trading tools, extensive investment options, a wide range of investment options and great customer service, Schwab is a good choice for beginner and veteran investors alike.
Beginners will appreciate Schwab’s easy-to-use online investing platform and mobile apps, which give you the ability to buy and sell securities, enter transfers, manage your accounts or access research, ratings and reports on a wide range of investments. Schwab customers also get access to a wide range of commission-free ETFs and mutual funds from the Schwab fund family and Schwab’s Select List.
Expert investors will enjoy Schwab’s advanced online and desktop trading systems, quick and easy mobile trades and a wide range of investment options. And with a low $4.95 trade fee, you’ll get among the lowest prices in the industry when you do decide to buy and sell.
Fidelity is another leader in low-cost investments, with a $4.95 per trade fee. Fidelity is known for its family of low-cost funds and in-depth research tools on the Fidelity website.
Fidelity is also a forward-looking leader in technology and tools for investors. Some useful tools from Fidelity include a retirement planning evaluation, trade strategy tools, estate planning features and more. Fidelity also offers its own family of funds.
When logged into a Fidelity account, the standout feature is the news and research tab. Here you can get detailed information about many stocks, bonds, funds and other investments, useful investment screeners and even information on participating in the coveted IPO process.
Robinhood is a unique online brokerage. While it doesn’t have nearly the number of features or investment options as a traditional brokerage, this company offers something none of the others do on an ongoing basis: free stock trades. Unlimited. Forever.
Yes, Robinhood offers free trades. In fact, when you apply you can also get access to free options trades and cryptocurrency trades as well (that’s Bitcoin, Ethereum and other digital currencies).
Robinhood is a mobile-first trading platform. The Web version is actually brand new. Once you log in, you won’t get many bells and whistles, but you will get free trades. You can't beat the price.
Etrade is one of the oldest online brokers, and they are popular due to their easy-to-use tools and powerful trading platform. At $6.95 per trade (for the first 29 trades, $4.95 after up to 500), they are not the cheapest game in town. But they can have a lower cost with some volume discounts.
The OptionsHouse platform rests in the middle of the Etrade experience. While you can trade just fine on the Web or website, opening up OptionsHouse gives you quick access to the trendline, volume, as well as other important market charts and data, so active traders know they are making the right decision.
Like most brokerages, you can get access to a range of investment choices. Etrade offers stocks, bonds, mutual funds, ETFs, options and futures. Pretty much anything that can be traditionally traded by a retail investor is tradeable with Etrade
Ally Invest joins other low-cost brokerages with $4.95 trades, with volume discounts when you trade more. Thanks to low commissions, no account minimums and automated investment plans, Ally Invest is a great choice for beginners.
Ally Invest is formerly known as TradeKing, which Ally acquired in 2016. TradeKing became Ally Invest. If the Ally name sounds familiar, it may be because of Ally’s top-rated checking and savings accounts. Investing is a natural extension of Ally’s online banking.
Ally offers volume-based discounted trades, only $3.95 each, for account holders with a $100,000+ average daily balance or at least 30 trades per quarter. But even if you don’t qualify for the discount, Ally offers competitive standard pricing and a range of investment choices, including foreign currencies.
TD Ameritrade is a long-time brokerage that offers $6.95 trades. TD Ameritrade completed an acquisition of Scottrade back in September 2017, making it one of the larger players in the online brokerage industry.
Active traders prefer TD Ameritrade, thanks to its thinkorswim platform. While you can trade on the Web or your phone as well (or even with a smartwatch!), thinkorswim sets a high bar for trading platforms.
Thinkorswim offers professional grade trading tools. If you have a background in investing, this is about as close to a Bloomberg terminal as you can get in retail investing without spending a massive amount of subscription fees. With thinkorswim, you can even trade 24 hours per day (five days a week) on select securities with a global 24-hour trade cycle.
Between alerts, charts, economic- and investment-specific data and advanced trading entries, veteran traders with an active account may like TD Ameritrade best.
Merrill Edge, part of Bank of America, has some serious Wall Street heritage. Merrill Edge gets its name from Merrill Lynch, a long-time Wall Street powerhouse with roots going back to 1914. Merrill Lynch was a big loser in the Great Recession and ended up selling out to Bank of America in 2008.
These days, Merrill Edge is the discount brokerage arm of Merrill Lynch/Bank of America. But what makes Merrill Edge most unique is its participation in the Bank of America Preferred Rewards program. If you already bank with Bank of America, this might make Merrill Edge the best option for you.
Benefits for Merrill Edge customers in the Preferred Rewards program include discounts and interest rate boosts based on your account balance. Some of these perks, like no-fees at other Bank ATMs, are not all that exciting because many banks offer that for free these days.
But among big brick and mortar banks, that is a rare and valuable add-on for some people, as are waived monthly maintenance fees and priority customer service. The best rewards are reserved for those with a $100,000+ combined Bank of America balance who fall into the “Platinum Honors” tier.
Interactive Brokers offers a unique pricing structure that can help the most active traders save on fees. You can choose between fixed-rate plans and tiered plans depending on your needs and trading strategy.
Under the fixed pricing model, U.S. stock trades are $0.005 cents per share (that’s a half a cent per share), with a $1 per order minimum. Interactive Brokers offers nine fund families with commission-free ETF trades. International markets charge different fees depending on where you trade.
Under the tiered pricing structure, you pay less per share, but your fees are based on your total trade volume. You’ll pay anywhere from $0.0035 cents to $0.0005 cents per share depending on your trade volume. Exchange fees are broken out from the trade fees, you’ll pay more than just that rate depending on the exchange and trade volume.
Interactive Brokers gives you direct access to a handful of popular global stock exchanges. Countries include Canada, Mexico, Austria, Baltic States, Belgium, France, Germany, Hungary, Italy, Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland, United Kingdom, Australia, Hong Kong, India, Japan and Singapore.