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Best Brokerages | January 2023

The best brokerage firms do offer reliability, security, and a global presence. The stock trading platforms here, listed in no particular order, offer user satisfaction, attractive features, global presence, safety, and reliability and are some of the best stock trading companies out there.

If you’re an active investor, stocks comprise a significant portion of your financial portfolio. But the stock market is volatile. If you’re lucky, knowledgeable, or both, you can make a killing. If you're not, you may be left with nothing. A reliable brokerage firm can make all the difference. Which is why a guide to the best brokerage firms will be helpful to understand which brokerages provide the best features, charge the lowest trading fees, and offer best customer service.

FAQs on Brokerage Firms & Stock trading companies

Do I need a broker to invest?

Buying stocks normally requires a broker who can execute your trade. By buying stock directly through the company, you can still build an investment portfolio without having to rely on the services or pay the fees of a stock broker.

What is the purpose of a brokerage account?

The brokerage firm helps you place investment orders, and typically collects a commission for doing so. Brokerage accounts offer you access to a range of different investments, including stocks, bonds, mutual funds, index funds and exchange-traded funds.

Is my money safe in a brokerage account?

While the FDIC protects up to $100,000 per individual depositor and $250,000 for IRAs, the SIPC insures up to $500,000 in missing brokerage funds. Nearly every brokerage registered with the SEC has to be a member of SIPC.

How do I find the best online brokers for beginners?

Entering the world of online stock brokers and trading platforms can be intimidating for new investors. But some platforms are designed to make it easier.

If you are a beginner, the best online broker trading platform will be one that offers a good user experience on the website or mobile app, comprehensive educational materials, and access to reliable market research. TD Ameritrade, E TRADE, Fidelity, and Charles Schwab are all known for being beginner-friendly.

TD Ameritrade, for example, gives users access to hundreds of webinars each month, along with free courses and videos. It’s also created an inviting user experience that turns stock trading into a game.

As you learn, you’ll take quizzes to earn points and badges. Plus, you can practice with fake money, making TD Ameritrade one of the most user-friendly trading platforms in our book.

E TRADE also has an accessible user experience that is easy to navigate, and it offers note-taking and practice trading.

Both platforms enable you to start without any minimum required deposit and offer commission-free trades on stocks. So they’re not only easy to use, but they’re low cost too. The best broker for you may not be the best for the next person. Review our top picks above and weigh the pros cons to find the right fit for you.

What types of investments can I make with online brokers?

Online brokers that are full service typically offer five types of investments. You can opt for individual stocks, options, mutual funds, ETFs, and bonds.

They may also offer futures, forex, and American depository receipts. Learn more about these investment types in our complete guide to brokerages.

The best online broker for you is going to be the one that offers the investment types you want. Full-service brokers can help you today and in the future as your needs may expand.

What is the ‘account minimum’ with online brokers?

An account minimum is the smallest amount a stockbroker allows you to invest. For example, Ally Invest requires investments of at least $100. However, account minimums vary from one company to the next, and many brokers (like E TRADE and TD Ameritrade) have done away with them altogether. A low-cost company without an account minimum can help new investors (who want to start out small) to get their feet wet.

How do I get a bonus from online brokers?

Some online brokers offer promotions for qualifying deposits in hopes of attracting more investors to their brokerage. Promotions often come in the form of cash bonuses, which increase as deposit amounts increase. However, you must usually maintain your balance for a certain amount of time to get or keep the bonus.

For example, brokers may offer a cash reward of $100 for deposits of $20,000. But to qualify, you must make the deposit within 45 days of opening the account and keep the balance at the deposit amount for at least 90 days.

Similarly, TD Ameritrade offers bonuses up to $2,500 in cash when you deposit $2M and maintain the balance for 12 months.

What fees do online brokers charge?

When investing, you need to understand the trading fees and pricing structure to find the best online brokers as the costs will eat into your profit. What should you know?

First, by opting for online trades, you can save significantly over what you would pay for broker-assisted trades. However, be sure to check the trading fees charged on each transaction.

TD Ameritrade introduced commission-free stock, charging no fees for online stocks and ETFs, as well as options trades. However, a $0.65 per contract options fee applies. Bonds available at auction are available commission-free, while the cost for other bonds depends on a net yield basis.

Aside from commissions, you should also watch out for service, exception, and regulatory fees. For example, you may face a charge for transferring your money out of the web platform, as well as annual fees and fees for inactivity.

It’s best to compare the best online brokers’ trading fees and pricing schedules to find the one with low cost, competitive fees for your planned use.

How do I choose the best online brokers?

Investing in a web platform for trading comes down to finding the best online broker for your needs. One company won’t be the best for all traders. We’ve highlighted a selection of the best online brokers in the section above.

It’s best to decide how you want to invest and then look for the web trading platform that offers you the best fit for your needs. Compare investment options, user-friendliness, commissions, fees, promotions, account minimums, and the tech fit (e.g., technical or not, mobile app or not). It also helps to have interactive brokers who will respond to your questions.

Compare the pros and cons of other investment platforms.

Is day trading illegal?

No, there is nothing illegal or even unethical with day trading. But it can be risky. Most individuals who go about investing do not have the wealth, skill, time, or the temperament to make money and sustain the devastating losses that day trading can bring.

Is my money safe in a brokerage account?

While the FDIC protects up to $100,000 per individual depositor and $250,000 for IRAs, the SIPC insures up to $500,000 in missing brokerage funds. Nearly every brokerage registered with the SEC has to be a member of SIPC. Most likely, says Harbeck, you won’t lose a dime.

Do I need a broker to invest?

Buying online stock normally requires a broker who can execute your trade. Another option is a discount broker who charges a commission on services but doesn’t offer other services or support. However, by buying stock directly through the company, you can still build an investment portfolio without having to rely on the services or pay the fees of a stockbroker.

What is the purpose of a brokerage account on a trading platform?

The brokerage firm helps investors with orders and typically collects a commission for doing so, but not always. A brokerage account on a trading platform offers you access to a range of different investments, including stocks, bonds, mutual funds, index funds, and exchange-traded funds. They can help you get into investing while having experts and resources on-hand. You'll have to weigh the pros cons to decide if it's right for you.

Which online broker has the lowest fees?

As more online trading platforms have entered the scene, competition has increased, driving the costs for online trading down—a great thing for investors. We are now seeing many companies such as TD Ameritrade, Robinhood, and E-Trade offer commission-free online trades.

Should brokerage accounts replace savings accounts?

It depends on what you use your savings account for. Some brokerage accounts are becoming more and more like checking and savings accounts. In some cases, you can withdraw money from an ATM and even use them to write checks and pay bills. However, brokerage accounts are typically not insured, so they are riskier than savings accounts and checking accounts, which are insured by the FDIC or the NCUA. If you are saving for a specific goal, such as a downpayment on a house or a wedding, and need a specific amount by a specific date, a savings account is probably a better option. On the other hand, if you are interested in investing, brokerages are the way to go. Most savings accounts offer minimal APYs, so it is usually a good idea to move to a brokerage account where you can access other investments with higher returns.

Which brokerage firms have the best mutual funds for investors?

When looking for a brokerage with the best mutual fund offers, there are a few things to consider. One is a good combination of index funds. Another is a brokerage that offers active management. Then, of course, you want low-cost pricing and a low barrier to entry. E TRADE and TD Ameritrade are among the best with thousands of mutual fund options to choose from, including lists with no transaction fees (NTFs).

What are active traders?

Active traders monitor the short-term movements on a stock chart and buy and sell securities in response. This is in contrast to passive or indexed investors that take a more long-term, buy-and-hold strategy. Active trading methodologies include day trading, swing trading, position trading, and scalping.

What brokers offer options trades?

Options trades are one of the common offerings by online brokerage firms. When comparing companies, look for one that offers low contract fees, resources for high-quality research, customer service, and quality trading tools.

Can you invest with an online broker using credit cards?

Most brokers and online trading platforms won't let you fund your account with credit cards (borrowed money). Instead, you'll have to put up cash from a wire transfer, debit card, or PayPal account. For example, TD Ameritrade, E TRADE, Vanguard, and Fidelity have policies against credit cards. However, in some cases, you can invest in margin accounts using credit cards.

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