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12 Best Online Brokers for Stock Trading in 2022

A good online broker should offer low account minimums, a robust trading platform, and solid research & analysis tools.

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The information provided on this page is for educational purposes only. The Modest Wallet is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual.

Online brokers are definitely here to stay. And they have effectively disrupted the trading industry (and retail trading for that matter) by introducing low-fee services, user-friendly trading platforms, and a high number of available securities to trade.

However, there are so many alternatives when it comes to picking an online broker if you live in the US that you may feel a bit overwhelmed as you browse through the lists of features they offer, their pricing, and other key characteristics. This article will help you choose the best online broker for you.

Broker Account Minimum Fees Learn More
TD Ameritrade $0 $0 per trade Learn More
Webull $0 $0 per trade Learn More
Robinhood $0 $0 per trade Learn More
Firstrade $0 $0 per trade Learn More
Ally Invest $0 $0 per trade Learn More
SoFi Invest $0 $0 per trade Learn More
E*TRADE $0 $0 per trade Learn More
Interactive Brokers $0 $0 per trade Learn More
TradeStation $500 $0 per trade Learn More
Fidelity $0 $0 per trade Learn More
Charles Schwab $0 $0 per trade Learn More
Public.com $0 $0 per trade Learn More

Best Online Brokers

Given the importance of selecting the broker that suits your particular needs best, we have curated this list of the best online brokers which you can use to short-list candidates before you make a final decision.

1. TD Ameritrade: Best Overall

TD Ameritrade Homepage
Source: TD Ameritrade

TD Ameritrade is an online broker with almost 50 years in the trading industry, currently offering its services to roughly 12 million clients in the United States and holding more than $1T in assets from its investors.

Fees and Pricing

Similar to other providers, TD Ameritrade has also slashed its commissions for stocks and ETFs to zero, although they still charge fees for trading other instruments like bonds, mutual funds, and Forex pairs.

For mutual funds, TD charges around $50 per each $2,000 invested, while corporate bonds can be traded for as little as $1 per bond with a minimum of $10 per transaction. 

Trading options with this provider generates a $0.65 commission per contract, while trading futures costs around $2.25 per contract. 

TD Ameritrade does not charge any deposit or withdrawal fees for US-based clients. However, non-US clients have to pay a $25 fee per withdrawal if they have an international bank account.

What do we like about it?

TD Ameritrade’s long-standing reputation in the stock trading industry has made it one of the strongest players in the landscape and virtually every single feature they offer is considered either decent or excellent for both amateur and experienced traders.

The research tools and technical features of its trading platform are highly sophisticated and traders can enjoy a wide range of market orders that are quite useful for trading certain instruments.

Additionally, the number of financial instruments available for trading is another positive aspect of this provider, as TD Ameritrade supports 75 different currency pairs, more than 2,300 ETF, and individual stocks listed in 5 different stocks markets.

Moreover, the platform covers 740 different fund providers, 40,000 bonds, 5 options markets, and 8 futures markets.

Read our full TD Ameritrade review to learn more.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
  • Promotion: None at this time

on TD Ameritrade’s website

2. Webull: Best For Beginner Investors

Webull Homepage
Source: Webull

Webull is an online broker that was founded in 2017 (making it one of the youngest candidates on our list). It provides retail traders with cutting-edge technology for their trading activities, along with an inexpensive trading service that features real-time quotes and full extended hours, meaning users have access to pre-market and after-hours action. 

Fees and Pricing

WeBull offers zero-commission trades for US-listed stocks, ETFs, and options, similar to what other online brokers offer. 

That said, the firm still charges the regulatory fees applicable to each trade, including those mandated by the SEC, FINRA, and clearing houses — which are almost imperceptible. 

On the other hand, Webull offers marginable trades that amount to 4 times the account’s balance for day trading and 2 times the account’s balance for overnight trading. A minimum amount of $2,000 is required to be eligible for a margin account.

Margin rates start at 6.99% for accounts with less than $25,000 and progressively go down to 3.99% for accounts with a balance higher than $3 million.

Other fees charged by Webull include a $25 withdrawal fee for US-based accounts and a $45 withdrawal fee for international accounts. Additionally, deposits made via wire transfer are charged an $8 fee per deposit for US bank accounts, and $12.5 for non-US accounts.

What Do We Like About It?

Webull’s trading platform is probably the firm’s strongest suit, and it was conceived to serve both amateur and experienced traders. 

The platform offers 45 different technical indicators along with an intuitive search function. It also provides fundamental data on the different securities available to trade. 

Another positive feature is the stock screener, which can be applied not just to US-listed stocks, but also to securities listed in various other exchanges around the world.

The trading interface of the web-based version is highly customizable, and WeBull’s mobile trading app is possibly one of the best in the industry, as it includes a significant number of features that other mobile trading apps have failed to incorporate.

You can read our full Webull review for more details.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading
  • Promotion: 2 free stocks

on Webulls’ website

3. Robinhood: Best For Millennial Investors

Robinhood Homepage
Source: Robinhood

Launched in 2015, Robinhood is a growing online broker that currently serves more than 13 million users by providing zero-commission trades for traders in the United States.

The firm’s founders, Vladimir Tenev and Baiju Bhatt, aim to democratize access to the financial markets by introducing inexpensive trading services. It should be noted that this broker has seen significant growth in its user base during 2020 following the pandemic retail trading boom.

Robinhood currently offers US-listed stocks, ETFs, options, and cryptocurrencies.

Fees and Pricing

Robinhood offers zero-commission trades for US-listed stocks, ETFs, options, and cryptocurrencies. while it also provides the possibility of owning fractional shares of certain companies whose stocks are considered high-priced.

For international shares, zero-commission trades are also available — but custodial fees may apply.

Robinhood does not charge any deposit or withdrawal fees for wires or ACH payments,  and they also offer a premium package called Robinhood Gold  (which is the equivalent of a margin account).

This package charges a monthly subscription fee of $5, and margin rates start at 5%. It provides access to in-depth research reports from Morningstar and Level II market data. 

What Do We Like About It?

Robinhood saw a popularity boost in 2020 as a result of a retail trading boom that occurred as individuals confined at home due to the pandemic found it interesting to trade in the stock market.

The firm’s competitive advantage is definitely its inexpensiveness, as Robinhood doesn’t charge any fees for trading stocks, options, or ETFs. They also waive certain non-trading fees like deposit or withdrawal fees, which other providers usually charge.

Additionally, Robinhood offers the possibility of trading cryptocurrencies like Bitcoin, Ethereum, and Dogecoin for free. 

You can read our full Robinhood review for more details.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading 
  • Promotion: 1 free stock

on Robinhood’s website

4. Firstrade: Best For Retirement Accounts

Firstrade Homepage
Source: Firstrade

Formerly known as First Flushing Securities — a company with over 35 years of positive track record in the financial industry — Firstrade is a strong player in the self-directed trading segment that offers zero-commission trades for US-listed stocks and ETFs and zero-fee options trades.

This brokerage was awarded best online broker in 2020 for options trading by Kiplinger’s and one of its strongest suits is research as the company has developed a robust portfolio of solutions for advanced traders including its Options Wizard, Firstrade Navigator, and crypto market tracker powered by Apex Crypto.

Fees and Pricing

Firstrade charges no fees for trading US-listed stocks, ETFs, or mutual funds. Meanwhile, this broker also offers zero-fee options trades.

Finally, for fixed-income securities, Firstrade pricing structure is “net yield basis” meaning that the broker acts as principal in the transaction and, therefore, the price of the financial instrument will be subject to a markup or markdown.

What Do We Like About It?

Aside from the traditional instruments supported by most trading platforms — i.e. stocks, bonds, and ETFs — Firstrade enables its users to trade over 30 different digital assets including Bitcoin, Ethereum,  Algorand, Avalanche, and Dogecoin, among others.

In addition, this broker’s zero-fee options trading service is particularly attractive for traders who prefer to operate with derivatives rather than buying the underlying asset directly. Read our full Firstrade review to learn more.

In A Nutshell

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF, mutual fund and options trading
  • Promotion: 3 free stocks

on Firstrade’s website

5. Ally Self-Directed Investing: Best Web-Based Platform

Ally Invest Homepage
Source: Ally Invest

Ally’s Self-Directed Trading service is offered by Ally Invest, a unit of Ally Financial — a big bank holding company that manages more than $180B in assets for its clients.

The firm currently provides its self-directed trading services to more than 350,000 users, offering zero-commission trades for US-listed stocks and ETFs and low-fee options trading services.

Fees and Pricing

Ally does not charge a fee for trading US-listed stocks or ETFs. However, the firm does charge a $0.5 fee per contract for options and $1 per bond traded within the platform, with a minimum of $10 per trade.

A minimum deposit of $250 is required to open an account with this provider, although no minimum balance is required to maintain it. For margin accounts, a minimum deposit of $2,000 is required.

Margin rates start at 7.75% for accounts with a balance lower than $9,999 and go as low as 3.25% per year for accounts with a balance higher than $1 million.

What Do We Like About It?

Ally’s banking background makes it a solid online broker that you can safely entrust with your money. 

The firm’s proprietary trading system features a wide range of advanced functionalities, including 117 chart studies and 36 different drawing tools, along with a significant number of research tools like an ETF screener, specific graphs, and add-ons designed for options traders.

Unlike other providers, Ally also offers the alternative of trading Forex within its platform, and they’re currently offering 50 different currency pairs. Its system also supports MetaTrader 4, which is popular trading software used by sophisticated traders.

You can read our full Ally Invest review for more details.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+0.50 per contract)
  • Promotion: None at the moment

on Ally Invest’s website

6. SoFi Active Investing: Best For Fractional Shares

SoFi Invest Homepage
Source: SoFi Invest

SoFi Active Investing is the self-directed trading solution of Social Finance Inc., a financial services firm founded in 2011 with over 1 million clients in the United States.

Similar to other providers, SoFi also offers the best of both worlds as it allows its users to either let the robo-advisor build their portfolio for them, or they can also engage in active trading through its platform, offering a selection of more than 2,000 ETFs and stocks listed in major US exchanges, including the NYSE, NASDAQ, and AMEX. 

Fees and Pricing

SoFi charges no trading fees on transactions made with US-listed stocks or ETFs. Cryptocurrencies can also be traded with a markup of 1.25% above their current market prices — which is a bit expensive.

On the other hand, the firm doesn’t charge any other fees aside from these, as no additional expenses are incurred when depositing or withdrawing money from the account.

What Do We Like About It?

SoFi offers several innovative features that other online brokers have progressively incorporated into their portfolio of products, like fractional shares, cryptocurrencies, and special rewards for signing up or referring a friend.

Additionally, SoFi has recently launched a series of proprietary ETFs including one that tracks a broad-market index— the S&P 500 – and charges no expense ratio (at least for now)  while others are designed with the millennial generation in mind.

One of them, the SoFi Gig Economy ETF (GIGE), tracks a basket of stocks in the so-called “gig economy” while the other — SoFi’s 50 (SFYF) — incorporates a selection of the 50 top stocks held by users within its platform.

These innovations make SoFi an interesting competitor that caters to the younger generation (such as Robinhood and Webull).

You can read our full SoFi Invest review for more details.

In A Nutsehll

  • Account Minimum: $0 ($1 to start investing)
  • Fees: Zero-commission stock and ETF trading
  • Promotion: None at the moment

on SoFi’s website

7. E*TRADE: Best Extensive Research Tools

E*TRADE Homepage
Source: E*TRADE

Founded in 1982, E*TRADE is one of the most well-reputed online brokers in the United States, currently providing its services to more than 5.2 million traders. 

The company was acquired by US investment bank Morgan Stanley in February 2020, a move that has provided a credibility boost for the firm while also raising expectations as to what may come next.

This broker only supports US-listed instruments, including stocks, ETFs, funds, bonds, options, and futures. No cryptocurrencies or Forex pairs can be traded through their platform.

Fees and Pricing

E*TRADE provides free stock and ETF trading. Mutual funds can be traded for $19.99 per trade.

Moreover, US treasury bonds can be traded for free, while other bonds carry a $1 commission per bond. 

Options can be traded for $0.65 per contract, and futures can be traded for $1.5 per contract. These are referential fees that apply to stock indexes. The actual fees may vary depending on the instrument that is being traded.

Margin rates charged by this provider start at 8.95% for $10,000 or less, and are progressively reduced to 5.45% for account balances higher than $1 million.

Finally, outgoing withdrawals cost $25 when made via wire transfer. No fees are charged for deposits or withdrawals made via ACH.

What Do We Like About It?

The acquisition of E*TRADE by Morgan Stanley generated a positive sentiment towards what may come next for the firm, as the investment bank may help introduce new insightful features like advanced research tools and deep-market analytics.

On the other hand, E*TRADE already offers a user-friendly proprietary trading platform that is suitable for both amateur and experienced traders, currently incorporating a wide range of market reports from reputed sources, real-time fundamental data for US-listed companies, and a charting tool that features 29 different indicators.

Check out our full E*TRADE review to learn more

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
  • Promotion: None at this time

on E*TRADE’s website

8. Interactive Brokers: Best For International Users

Interactive Brokers Homepage
Source: Interactive Brokers

Interactive Brokers is one of the biggest independent brokerage firms in the world, providing its services to more than 600,000 clients around the globe through a network of 24 offices located in 14 different countries.

This online broker provides traders with access to virtually all the financial markets in the world, which makes it a very interesting choice for traders who have a wide scope when it comes to the range of instruments they usually negotiate with.

Fees and Pricing

Interactive Brokers follows a tiered pricing structure,  which means that the cost of trading with them varies depending on the volume.

That said, the firm offers two packages — one is the IBKR Lite program, primarily designed for retail clients. This alternative allows the trader to enjoy zero-commission trades on US-listed ETFs and stocks.

On the other hand, the IBKR Pro — conceived for more sophisticated traders and investors — provides a tiered fee that goes down as trading volume goes up.

For other instruments like options and futures, fees start at $0.65 per contract for US-listed options and $0.85 for US-listed futures.

Fixed-income instruments like US-listed bonds can be traded at a cost of 0.1% of their face value with a minimum of $1 per order while mutual funds can be traded for $14.95 per trade.

Other non-trading fees include a $1 fee for withdrawals made via ACH and $10 for those made via wire transfer. 

Margin rates start at 2.59% per year for IBKR Lite accounts under $100,000, and the rate goes down to 1.59% for IBKR Pro accounts. The rates are progressively diminished to as little as 0.75% for IBKR Pro accounts with a balance higher than $3 million.

What Do We Like About It?

Interactive Brokers is a great alternative for advanced traders who would like to have access to a multitude of sophisticated trading instruments from multiple corners of the world. 

IB’s margin rates are probably the lowest available in the marketplace, which also makes it an attractive choice for individuals with large account balances who can save significant amounts of money by financing their trades with this provider.

Read our full Interactive Brokers review to learn more.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Stocks and ETFs $0.005 per share (IBKR Pro), $0 (IBKR Lite) and $0.65 per options contract
  • Promotion: None at this time

on Interactive Brokers’ website

9. TradeStation: Best Active Trader Community

TradeStation Homepage
Source: TradeStation

TradeStation is an online broker owned by the Monex Group, a Japanese brokerage firm listed on the Tokyo Stock Exchange. The firm has been operating in the US since 1982, which makes it a long-standing player in the financial landscape.

TradeStation has many positive features, especially for buy-and-hold investors, although it is important to note that this provider primarily focuses on US-listed securities.

This provider currently offers access to US-listed instruments, including stocks, ETFs, options, futures, e-Mini futures, and cryptocurrencies.

Fees and Pricing

US-listed stocks and ETFs can be traded for free with this provider, while option trades cost $0.60 per contract for TS Select customers and $0.50 for TS Go clients.

Futures can also be traded with TradeStation for a $1.50 fee per contract for TS Select clients and $0.85 per contract for Premium.

A minimum deposit of $2,000 is required to open a TS Select account with this provider, while no minimum is required for TS Go accounts.

Mutual funds can be bought for $14.95 from a list of 50 leading fund providers, and bonds can be traded for $14.95 plus an additional $5 fee per bond.

Other fees charged by TradeStation include a $50 per year inactivity fee if the account falls below a $2,000 minimum balance; a $25 fee also applies to wires made to a US-based account. ACH withdrawals are free.

What Do We Like About It?

Although the portfolio of securities offered by this provider is fairly limited, the discount they offer on their trading fees if you sign up for a TS Go account is very interesting — especially for options traders.

Additionally, the firm offers the possibility of trading cryptocurrencies, which is an alternative that not all providers in this list have made available.

Learn more about TradeStation in our full TradeStation review.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.50 per contract)
  • Promotion: None at this time

on TradeStation’s website

10. Fidelity: Best Customer Service

Fidelity Homepage
Source: Fidelity

Fidelity is one of the oldest and largest online brokers and asset managers in the United States, with a history of almost 75 years in the financial industry, and they currently hold more than $8T in assets for their clients.

Fidelity was rated as the Best Online Broker in 2020 by Barron’s and by Investor’s Business Daily, which points to the quality of the firm’s trading services and the positive perception they have among investors.

Fees and Pricing

US equity trades  (including stocks and ETFs) can be made for free, while trading options generate a commission of $0.65 per contract. 

Bonds can be traded with Fidelity for $1 per bond, and Fidelity’s own mutual funds can be traded for free. Third-party funds generate a trading fee of $49.95 per purchase.

Finally, this broker charges 8.325% per year for margin loans for accounts with less than $25,000, and the rate decreases to 4% for accounts with a balance higher than $1 million.

What Do We Like About It?

Fidelity offers a few things its competitors lack. First, they have a portfolio of zero-fee index funds (which is only available to Fidelity’s customers), and they offer fractional shares of more than 7,000 different stocks and ETFs.

In addition, their trading platform includes  software called Recognia®, which recognizes potential technical patterns and events.

Their platform also incorporates research from 20 different providers and a selection of 2-year back-tested options strategies, a feature that is very interesting for options traders.

Check out our full Fidelity review to learn more.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
  • Promotion: None at this time

on Fidelity’s website

11. Charles Schwab: Best For ETF Trading

Charles Schwab Homepage
Source: Charles Schwab

Charles Schwab is one of America’s biggest financial institutions and the third largest asset manager in the world, currently overseeing more than $6T in assets and serving a total of 28 million brokerage accounts after the successful acquisition of TD Ameritrade.

The firm was one of the first to introduce the discounted model in the brokerage world, and since then, it has revolutionized the industry by using technology to expedite and expand its trading services.

Schwab offers investors the possibility of engaging in active trading by providing access to an extensive portfolio of ETFs (including their own) along with both domestic and international stocks, futures, options, fixed income instruments, and mutual funds. 

Fees and Pricing

Schwab has joined the group of online brokers offering zero-commission trades for US-listed stocks and ETFs, although a commission may apply to foreign instruments.

Moreover, options and futures can also be traded with Schwab for as little as $0.65 and $1.5 per contract respectively.

The firm also offers a wide range of mutual funds — including their own, which can be traded for free — while third-party funds can be traded for $49.95 per trade.

Finally, fixed income instruments such as US treasury bonds can be traded for free, while other forms of fixed income will generate a trading fee of $1 per bond. 

Schwab charges a margin rate of 8.325% for accounts with a balance lower than $25,000, and the rate progressively decreases to 6.575% if the balance of the account is higher than $500,000.

What Do We Like About It?

The research tools provided by Schwab’s platforms are significantly advanced. They include a newsfeed powered by major media outlets, market research reports from different providers, trading ideas, and detailed fundamental data on a large number of companies.

Additionally, Schwab has launched a wide range of ETFs and funds that cover different industries and track multiple broad-market indexes. For Schwab’s clients, these funds can be traded for free.

Finally, Schwab also recently launched a program called Stock Slices™ which allows investors to buy a fraction of a share of a company that trades at a high price.

Read our full Charles Schwab review to learn more.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock, ETF and per-leg options trading (+$0.65 per contract)
  • Promotion: None at this time

on Charles Schwabs’ website

12. Public.com: Best Social Trading Features

Public.com Homepage
Source: Public.com

Public.com is an initiative that aims to democratize access to the US financial markets by allowing individuals to buy stocks for free through a mobile app the company has designed for its users.

Public Holdings Inc (the firm) is regulated by FINRA, the NFA, and the SIPC, and the company makes money off the margin rates it collects from short-sells and from directing their orders to clearing houses. 

Public only offers US-listed stocks and ETFs at the moment, and they support fractional shares.

Fees and Pricing

Public does not charge a commission for any of the trades made within their platform. 

The firm charges a $30 withdrawal fee for domestic wire transfers and $75 for transfers made via ACAT. 

Additionally, they charge $30 per trade commission for broker-assisted trades.

What Do We Like About It?

Public’s innovative approach is attempting to disrupt the way people trade stocks by introducing a low-cost operating structure that aims to crunch fees as much as possible for investors. 

Public also offers “themes” so you can invest in things you care about, like the environment, AI, self-driving vehicles, and much more.

Read our full Public review to learn more.

In A Nutsehll

  • Account Minimum: $0
  • Fees: Zero-commission stock and ETF trades
  • Promotion: None at this time

on Public.com’s website


Methodology

In this section, we will be discussing the parameters that we have focused on to pick the best online brokers that made it to our list.

Our focus is to provide an independent and objective assessment of each of these providers to help our readers in making an informed decision when deciding who to go with.

  • Account Minimum: Most online brokers require a minimum deposit to open or activate an account. The lower the minimum deposit, the more enticing the broker will be for investors with a small budget.
  • Commissions and Fees: The cost of buying and selling securities with a certain broker could have a sizable impact on the performance of the investment portfolio down the road. Therefore, the best online brokers are those that offer the lowest rates in the market.
  • Investment Selection: In most cases, investors prefer to sign up with brokerage firms that offer the highest number of investment products as they can assemble and monitor their portfolio in a single place rather than having to jump from one platform to the other.
  • Account Types: Depending on the investor’s goals, having access to different types of accounts can be quite advantageous. For example, investors seeking to build a retirement fund will prefer to open an account with a provider that also offers tax-advantaged accounts instead of just taxable ones.
  • Trading Platform: Each investor has a unique set of needs that will vary depending on the strategy they adopt. Those who prefer to day-trade or swing-trade would probably lean toward brokers that incorporate the most advanced features into their systems. Meanwhile, investors who adopt a buy-and-hold approach may feel comfortable with a user-friendly platform that offers access to top-notch research and educational materials.
  • Customer Support: Custodying other people’s money is a serious business and that makes troubleshooting a particularly valuable service to expect from a broker for investors. Customer support means access to a representative in case something is not working as it should or if there are questions that need to be answered by a professional. The more channels available to reach out to the broker, the better.
  • Mobile App: Phones have become an essential item in our modern society and we tend to rely on them for almost anything. Having access to a brokerage account via a mobile app is considered a must for most investors. However, not all apps are created equal and, therefore, we focused on assessing how user-friendly and functional these apps are for each provider.

Some of the brokerages that we’ve reviewed this year that didn’t make the cut include:

  • tastyworks
  • Merrill Edge
  • J.P. Morgan Self-Directed Investing
  • Alpaca Trading
  • Oanda
  • Passfolio
  • Moomoo
  • NinjaTrader
  • Forex.com
  • TradeZero
  • Revolut
  • M1 Finance

Please keep in mind that the brokerages that didn’t make the list are not necessarily bad. Each broker comes with its advantages, disadvantages, and unique features.


Online Brokers Pros

  • Investors who sign up with an online broker in the United States are typically covered by SIPC for up to $500,000 in securities and $250,000 in cash in case the broker goes out of business.
  • Online brokers offer fast execution speeds and trading costs have been lowered amid an industry-wide push toward zero-commission trading.
  • Investors can access thousands of different financial instruments through the same provider including stocks, exchange-traded funds (ETF), mutual funds, futures, options, and even cryptocurrencies in some cases.
  • Most online brokerage firms offer complementary services such as retirement planning, robo-advisors, and human-led financial advice.
  • Signing up with these online brokers is easy and can be done in a matter of minutes.
  • The minimum investment required to open an account with most online brokers is low.
  • Most online brokers have created very intuitive and highly user-friendly trading platforms that cater to both beginner and seasoned investors.

Online Brokers Cons

  • Not all online brokers offer access to the same instruments meaning that investors may have to open an account with two providers in case their top pick does not support a certain kind of asset.
  • Since order execution is investor-led, there is room for error and investors may not be fully aware of what they are doing unless they study a bit about the broker’s supported trade orders and other financial terminology.
  • Some may say that online trading platforms “gamify” investing to the point that investors may act more recklessly than they would when deploying money electronically compared to when they go to the market and compare prices between different kinds of products.

What To Look For In An Online Broker

Not all online brokers are created equal and that calls for the creation of a systematic approach when shopping around to short-list and ultimately pick the provider that suits you the best.

In this section, we highlight some of the features that would make a provider stand out when comparing it with other available choices.

Account Minimums

If your investment budget is relatively low, some brokers nowadays offer the possibility of opening an account with a deposit of as little as $1. The best brokers don’t necessarily limit your access to advanced features due to this low deposit although some programs may require you to put up more money to be enrolled.

Commissions & Fees

Brokers earn money via commissions and fees collected per trade and also through non-trading fees. Nowadays, many brokers have opted to offer commission-free trading for US-listed stocks and ETFs primarily.

Depending on what kind of instrument you are looking to trade, zero-commission brokers are probably the best choice unless you want to trade options and futures in which case you will have to shop around to see who offers the lowest rates.

Trading Platforms

Most buy-and-hold investors don’t necessarily need sophisticated trading systems to build portfolios. However, if you are a day or swing trader, you’ll probably want to pick the broker that offers access to top-notch charting tools, technical indicators, and in-depth market data.

The most advanced trading platforms typically have desktop versions for both Windows and macOS. In addition, access to your account via a mobile app is considered a must as you may want to execute transactions from time to time without having to go to your laptop.

Research & Screening Tools

Research tools allow investors to get ideas of potential opportunities within the market. The most common features that online brokers include that facilitate research include breaking news from top media outlets, stock screeners, and proprietary software that presents trade ideas based on a pre-defined criteria.

Paper Trading

Paper trading is a great way to test the waters before committing any serious money to investing or trading in the financial markets. The best brokers offer access to most of the features available in the live version of their trading systems along with a sufficiently high account balance (fictitious) to allow investors to test different strategies and approaches at the same time.

Educational Resources

For beginners, understanding how the financial markets work can be quite complex as there is so much terminology to learn and things to follow up on. Great brokers understand the need to promote financial literacy among their clients to help them in improving the performance of their portfolios. To achieve this goal, they make available guides, tutorials, webinars, and online conferences in which interesting topics are discussed to help investors further enrich their knowledge.

Investment Selection

Online brokers typically offer access to stocks as this is the most sought financial instrument for both traders and investors. However, for those seeking to build diversified portfolios that use more complex strategies to achieve their expected returns, the availability of other instruments such as foreign stocks, futures, options, and even cryptocurrencies is a positive characteristic as it allows investors to further diversify their portfolios through the incorporation of multiple asset classes.

Account Types

Investing should be made easy for those who are not willing to devote that much time to building and monitoring their portfolios. With this in mind, top brokers can simplify things for investors by supporting many different types of investment accounts including taxable and tax-advantaged alternatives such as IRAs and Roth IRAs so they can easily keep track of their portfolios without having to log into multiple apps and platforms to do so.

Customer Support

The best services are those that respond positively when things don’t go as expected. Since your broker will provide custody of your money, having access to a representative from the company without having to wait hours by the phone or days for an email to be responded is the ideal situation. As a rule of thumb, go with the brokers that allow you to get in touch with them in many different ways – live chat, phone, e-mail, support tickets, etc.


FAQ Best Online Brokers

These are the most frequently asked questions regarding the best online brokers.

What is An Online Broker?

An online broker is a financial services firm that provides access to the financial markets via an electronic trading system. Through these companies, users can place buy and sell orders for the different instruments supported by their platforms.

How Do Online Brokers Work?

Online brokers are also known as broker-dealers. They act as intermediaries through which customers can place buy and sell orders that are re-routed to the exchanges where the financial instruments are listed. These organizations charge commissions and fees per trade and they may provide a wide range of other services and features including research tools, educational materials, and financial advice.

Do Online Brokers Provide Insurance?

Online brokers in the United States have to obtain a license to operate legally in the country. Investment accounts opened with licensed providers are covered by the Securities Investor Protection Corporation (SIPC) – an organization created to protect clients from losing their money in case a provider faces operational and financial issues.

The SIPC policy covers up to $500,000 in securities held within an investment account and $250,000 in cash.

Can I Buy Stocks Online Without a Broker?

Formal exchanges require the involvement of an intermediary to execute transactions within their systems. Therefore, it is not possible to buy stocks online by yourself or directly with the exchange.

How Much Do I Need To Start Investing With An Online Broker?

The minimum amount required to open an account with an online broker is typically low nowadays – usually less than $100 – and, in some cases, with as little as $1. To execute your first trades, some brokers have created fractional shares. These instruments allow investors to buy a portion of a financial instrument, in this case a stock or ETF, and they can typically do it with as little as $1 as well.

Can I Lose Money With A Brokerage Account?

Even though the money held in a brokerage account with a US-based institution is protected by SIPC, investors can still lose money on their investments if the value of the assets declines.

These losses are not covered by any insurance and, therefore, it is possible to lose money with a brokerage account.

Which Broker is Best for Beginners?

The best broker for beginners is one that requires a little amount to open an account, offers top-notch research tools and educational materials, supports the most types of accounts and securities, and offers outstanding customer support. Moreover, trading and non-trading fees should either be the lowest in the market or be within the average if the broker excels at everything else mentioned earlier.

Can I Invest With Little Money With An Online Broker?

Yes. The introduction of fractional shares for both stocks and exchange-traded funds (ETFs) has allowed investors to create broadly diversified portfolios with as little as $20.

Which Online Broker is The Cheapest?

Most online brokers nowadays offer zero-commission trading for US-listed stocks and ETFs. If you are looking to build a portfolio composed of these instruments only, most providers have the same pricing structure.

On the other hand, if you are looking to trade other types of assets such as bonds, options, futures, and cryptocurrencies, Robinhood and Interactive Brokers are among the cheapest providers for these particular instruments.

What Types of Accounts Do Online Brokers Offer?

Most brokers offer both taxable and tax-advantaged accounts such as IRAs, Roth IRAs, and 401(k)s. That said, some providers do not support tax-advantaged accounts as is the case of Robinhood.

Do Online Brokers Offer Paper Trading?

Not all online brokers support paper trading. Therefore, if you want to give the financial markets a try without committing any money in the beginning you should make sure that the brokerage firm you go with supports this feature.

Do Online Brokers Offer Margin Accounts?

Yes. Margin accounts allow investors to borrow money. The loan is backed by the securities held in the account and the interest rate charged on the loan varies from one provider to the other. Most online brokers support margin trading.

Final Thoughts

Online brokers have disrupted the trading industry for good. The former ways are likely to remain in the past, and that is good news for traders, especially as trading fees continue to be slashed as part of an industry-wide trend. 

If you are currently interested in taking the wheel of your financial portfolio, you should read this list carefully to pick the broker that will serve you in that process.  Pick wisely, but  keep in mind that you can always switch to another if you don’t feel things are going as you had expected.

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