If you want to actively trade stocks and other securities, having a stock broker is a must, and thankfully- there are a plethora of online brokers for you to choose from. Whether you're a high-volume day trader or make only a few trades each year.
Meet the Best Stock Brokers
TD Ameritrade is a popular online stock broker that features low pricing and no minimum deposit. It also offers a generous selection of commission-free ETFs and educational tools that should make it a hit with new investors.
Merrill Edge is the discount stock broker of Bank of America. It has zero commissions for its stock and ETF trades. And there’s no base commission for options trades. For an added fee, you can get access to a professional investment advisor or managed account..
Ally Invest is Ally Bank's online brokerage firm, and together the services make for great one-stop banking and investing package that's, frankly, hard to beat. However, it can take inordinately long for your funds to transfer to your account (up to 10 business days).
E*TRADE may have been a pioneer in the online discount broker space, but it's still one of the best bets for active traders. It has easy-to-use platforms, great customer service, and quick trade execution. However, it's not the cheapest platform on the market.
Charles Schwab ranks high in customer satisfaction and offers all the features you'd find at any major brokerage, including no-fee professional portfolio management on accounts with at least $5,000. Plus, there's no longer a required minimum investment.
If you're looking for one-stop-shop banking and investing service, Fidelity Investments is for you. However, despite its stellar mobile app, the service lacks the functionality of other online brokers.
Vanguard offers an unbeatable selection of ETFs, no-load mutual funds, financial planning and other services you'd expect from a stock broker. While it's great for mutual fund and ETF investors, stock traders will likely prefer other services.
Public is a commission-free stock and ETF trading app for iOS and Android. Public supports fractional share investing in stocks and ETFs, so you can buy in dollar amounts instead of by a round number of shares.
How to Choose the Right Broker For You
Choosing the right stock broker for you depends on your particular trading style and goals. So we've compiled this list to help. At the following list, we've ranked the stock brokers by the overall rating we've given them in our reviews. However, keep in mind that just because one broker is ranked higher than another, it doesn't mean that's the better broker for you. You'll want to compare features, read the reviews, and check out the available promotional offers before making your decision.
>>Further Reading: How to Choose a Stock Broker
Best Online Stock Brokers
1. TD Ameritrade
TD Ameritrade is one of the biggest and most popular online discount stock brokers in the U.S. It offers a wide range of investment and account options, as well as several resources and tools, including tax-loss harvesting.
- Within the brokerage, there are four trading platforms to use. These include the award-winning Thinkorswim platform, which is ideal for experienced and active traders. It's a bit like having a Bloomberg Terminal but for a much lower price.
- But that's not to say TD Ameritrade isn't a good fit for more casual investors as well. We've found the broker's web trading platform to be easy to use. And you can even practice placing trades with virtual or “paper” trading on TD Ameritrade's site before you commit a single penny.
- This broker's mobile app is excellent, too. TD Ameritrade Mobile is available for both Android and Apple systems (and Apple Watch) and can help you keep tabs on your account no matter where you are. However, it lacks some of the functionality that active traders like on the website. For more advanced traders, there's TD Ameritrade Mobile Trader, which is the mobile companion to Thinkorswim.
- Besides, TD Ameritrade also has an affiliated bank, TD Bank. This means you can have a one-stop-shop for your financial needs.
- Access to more than 300 commission-free ETFs
- Easy-to-use interface
- Research and educational resources
- Broker-assisted trades are pricey
2. Merrill Edge
Our Score: 8
Merrill Edge is a great broker for those who already have an account at Bank of America or want to have all of their financial and investment accounts in one place. You also get free access to BofA Global Research, which is a great resource for researching individual stocks.
- There are a number of account options available, including Roth and traditional IRA accounts, custodial accounts, joint, and taxable accounts. You can choose to invest on their web-based platform or on their mobile app.
- If you want a more hands-off approach to investing, you can try Merrill Edge’s managed portfolios. These are available with a minimum deposit of $5,000 and cost 0.45% annually. While that isn’t the cheapest option out there for a robo advice service, it’s not outrageously priced either.
- And if you want a human advisor, you have the option of trying out Merrill Edge Select Portfolios. You get the technology of having a managed portfolio with the added benefit of getting the advice of a human advisor. This account requires a $20,000 minimum investment and charges 0.85% a year. You can get a discount on the select and managed portfolios if you have Preferred Rewards.
Pros & Cons
- No fees or minimums for self-directed accounts.
- Extensive research and education resources
- Discounts available for loyal Bank of America customers
- Fees for managed portfolios are higher than some competitors
- No support for futures or forex trades
3. Ally Invest
Our Score: 9.5 Ally Invest is a particularly great broker for beginning investors. With zero commissions on most trades and no required minimum deposit, Ally Invest makes trading easy and accessible.
- But that's not to say Ally Invest lacks the features and functionalities you'll find with the other brokerage services. Although Ally's platform isn't quite as robust as TD Ameritrade's Thinkorswim, it does provide traders with all of the tools they need. In large part, that's because Ally Invest was created when parent company Ally Financial purchased TradeKing. The company took all of TradeKing's functions and have added on to them, too.
- Speaking of Ally Financial, the broker also benefits from its relationship with its “sibling,” Ally Bank. Ally Bank is an award-winning, fee-free online bank that pays outstanding interest rates. You can easily connect an Ally Invest account with an Ally Bank account to create a one-stop-shop for all your financial needs.
- Ally Invest also offers a Cash-Enhanced Managed Portfolio that is essentially a robo advisor but charges no advisory fees. This portfolio maintains a cash buffer to protect your portfolio in case of a market downturn.
We also like Ally Invest's mobile app, which lets you do practically everything you need to do with your account from your cellphone.
Overall, there's plenty about Ally Invest to like, no matter if you're a beginning investor or an experienced trader.
- Commission-free trading
- Banking services
- Customer service
- Fund transfers can be slow
- No local branches
E*TRADE is considered the “granddaddy” of online discount brokers, and it's stuck around for a good reason. Its platforms are easy to use, customer service is responsive, and trades are quickly executed.
- It's a full-service brokerage offering investments in stocks, bonds, and other fixed-income assets, as well as a selection of more than 8,000 mutual funds, ETFs, target-date funds, options, and futures. You can choose to open a regular, taxable brokerage account or an IRA, Individual 401(k), or Profit Sharing Plan.
- If you want financial advice, E*TRADE offers a robo-advisor service, E*TRADE Core Portfolios. This service uses computer algorithms to custom-design and manages a portfolio just for you so you can “set it and forget it.”
- E*TRADE's mobile app is second to none. Available for both Android and Apple systems, it provides investors with nearly all the functionality of the E*TRADE website. Our reviewer felt he could use it instead of the traditional website. It's perfect for active traders on the go.
- Comprehensive trading platform
- User-friendly interface
- Accommodates investors of different levels
- Oriented toward active traders for options
5. Charles Schwab
For nearly 50 years, the name Charles Schwab has been synonymous with investing. But that doesn't mean it's a dinosaur. Schwab has kept up with the times quite well. That includes its recent decision to nix investment minimums.
- Schwab is famous for its white glove-level customer service. That extends into its more than 300 brick-and-mortar offices across the United States. In-person help is likely just around the corner.
- For the DIY crowd, Schwab offers just about everything you can think of to trade. Stocks, options, no-fee ETFs and mutual funds… the list goes on (however, forex is noticeably missing). For those who want to “set it and forget it,” Schwab has its own robo-advisor service, Schwab Intelligent Portfolios, which provides fully automated investment portfolios.
- Schwab also offers a mobile app for both Android and iPhone systems. With the app, you can view your holdings and trade stocks, ETFs, mutual funds, and options. But beyond that, it's more limited than the E*TRADE or TD Ameritrade apps. However, it could be helpful if you're also using Schwab's banking services since you can have a bird' s-eye view of all your financial accounts from one app.
Charles Schwab should appeal most to new and intermediate-level traders. More advanced day traders are likely to be happier with more complex platforms such as TD Ameritrade's Thinkorswim. Still, if you're looking for an excellent all-around discount stock broker, Schwab is hard to beat.
- Sterling customer service
- No-fee portfolio management via Intelligent Portfolios
- No investment minimum
- Commissions on funds not on the no-load list
- No forex trades
- Not the best margin rates
6. Fidelity Investments
With a history stretching back more than 70 years, Fidelity has had time to become one of the world's biggest stock brokers. In addition to its online service, which began practically at the dawn of the internet, Fidelity operates nearly 150 investment centers throughout the U.S.
- Fidelity's portfolio of mutual funds is legendary. You can use them for exposure to everything from U.S. large-cap stocks to real estate. And many of them are commission-free, to boot.
- We also really like Fidelity's mobile app. If you're logged in, you can see real-time market quotes, along with up-to-the-minute news stories about events that could affect your investments and the markets as a whole. You can also use the app to trade stocks, options, ETFs, and mutual funds, as well as monitor your positions.
- Like many of the other major stock brokers, Fidelity has rolled out a robo advisor, Fidelity Go. Fees for this service are competitive, at only 0.35-0.45% per year.
- No minimums for personal trading accounts
- Huge selection of commission-free ETFs
- Lots of investment options
- Platform missing some functionality for active traders
- High margin rates
- Expensive broker-assisted trades
Vanguard has long been the go-to for indexed-based mutual fund investing. The company's founder, the late Jack Bogle, understood that over 80% of all actively managed funds don't beat the market's indices. His mantra: If you can't beat the market, you should become the market.
- Vanguard is the largest no-load mutual fund company in the world. But that doesn't mean it's limited to just low-cost index funds. Instead, Vanguard also offers a vast selection of actively managed mutual funds and ETFs that are still low cost.
- You can use Vanguard to invest in taxable accounts, as well as both traditional and Roth IRAs. You can also invest in both fixed-income and variable annuities that are among the lowest priced in the industry.
- Vanguard offers a decent, reliable app for trading with your fingertips. However, it doesn't have all the bells and whistles that you'll find with more app-centric brokerages like Robinhood. However, it does the job well for both Android and Apple mobile systems.
- There's no minimum deposit required to start investing with Vanguard, and there are no commissions charged on most stock, options, and ETF trades.
- Great selection of free funds
- Handy screener tools
- Good customer service
- High minimum for mutual funds ($3,000)
- Website feels outdated
Public.com is a stock and ETF trading app available on iOS and Android. It offers commission-free trades and there is no required minimum to open an account.
- The platform takes its name from its social element. The investing profile of users is public, so you can check out what others are investing in (although not how much they invested). This gives you the chance to see what companies are popular among investors and discover new companies or funds.
- We also love that you can buy fractional shares of a stock. Buying a full share of stock in a popular company like Facebook or Coca-cola is expensive. With fractional shares you buy a small portion of the full share, which makes it more accessible. This is a great resource if you want to diversify your funds or don’t have a lot of money to invest but want to get started with active trading.
- If you’re unsure of what to invest in, you can also check out Public.com’s themes. These are lists of stocks that are separated by category. For example, “Stay at Home” features companies that are likely to benefit from social distancing.
- The downside is that Public.com doesn’t support mutual funds, bonds, or other investments. But if you’re looking for an easy to use app that lets you buy and sell stock, then Public.com is worth considering.
- Free to Invest
- Fractional Shares Supported
- No Account Minimums
- No Web Account Management
- Limited Available Investments
- Limited Account Types
Tips for Newbie Investors
If you're just starting out investing via a stock broker, make sure you consider your timeline, goals, and types of accounts you're interested in opening.
If investing is still far along on your timeline, you're in a particularly good spot. After all, the earlier you start investing, the more you'll benefit from the magic of compound interest. Over time, your return can compound and grow your assets even larger. So if you haven't begun yet, now is a great time to get started!
As for your goals, although returns can never be guaranteed, if history is any guide, investing in stocks can help you beat inflation. If inflation continues to increase between 1% and 3% each year, the average annual return of the S&P 500 — 8.5% — means the market is probably a good bet.
Investing is also essential when it comes to retirement accounts. If you're not going to need your retirement funds for a few decades, investing in the stock market via an IRA or 401(k) is perhaps the best option for significant growth.
So keep these things in mind as you choose the online stock broker that's right for you.