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 online stock trading companies charge the smallest trading fees and offer best customer service.
Top-tier brokerages cannot guarantee that you will always make money. But 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.
Best Brokerage Firms in the USA
TD Ameritrade has competitive fees and excellent research tools. Also, it does not require a minimum to open an account.
Don’t let the low $4.95 per trade price fool you. Ally Invest’s Cash Enhanced Managed Portfolios is a first-rate operation. The platform features a user-friendly interface with rich data and research tools, available at no charge. Ally also offers account automation, which makes responsible investments on your behalf, for no annual fee. A minimum balance of $100 is required to open a managed portfolio.
While USAA insurance is available only to military personnel and their families, its banking and financial services products are available to the public. USAA has a two-tiered fee system. Platinum members (who execute 25 trades in 90 days and maintain a $50,000 account balance) pay $5.95 per month. Gold members (everyone else) pay $8.95 per month. USAA charges no surcharges for after-hours trading and few other fees. If you already hold a USAA’s bank account, a brokerage account is a logical addition.
E*Trade Financial brokerage firm ranks highly in research and trading tools and features reasonable pricing. It is also massive and globally prominent, with a presence in Canada, Mexico, Asia, Europe, and South Africa so you can make international trades by investing in foreign companies. With more than 3,000 employees worldwide, E*Trade investors have access to live trader assistance which makes E*Trade Financial is a great option for online stock trading. Also, E*Trade Financial has a mobile app on the Google Play Store and the Apple App Store so you can look at your investments on-the-go.
Zacks Trade is a good option for experienced traders who require additional research tools and more advanced reports. This brokerage is a good choice for frequent traders who are looking for a fast platform with low costs that includes tools designed for day traders.
Robinhood is an online stock trading brokerage based in Palo Alto, CA. It offers a smartphone mobile app, which allows individuals to invest in public companies and exchange-traded funds listed on U.S. stock exchanges without paying a commission. Robinhood allows its users to invest in stocks, ETFs, options, and cryptocurrencies, all commission-free, right from their mobile app or trade online via their desktop. Also, Robinhood does not require a minimum to open an account and offers referral incentives in-app.
The respondents of the 2014 J.D. Power Self-Directed Investor Firm Ratings gave Charles Schwab high marks across the board. Schwab provides great value for the money, with services like virtual trading and account transfers offered free of charge. New investors receive a bonus of $100 just for opening an account with Schwab. Best of all, there’s no minimum required to open an account.
Despite high marks across the board in the 2014 J.D. Power survey, Vanguard brokerage manages to fly under the radar for many investors. But don’t write them off. Vanguard is a heavy hitter, managing almost $3 trillion in assets. Vanguard also administers the world’s largest mutual fund and features the research tools and educational materials you would expect from a top-notch operation.
Fidelity brokerage company ranked especially high in customer service and research, two essential elements for enhancing investor confidence. It also offers good value for the money and a broad variety of product offerings. One area where Fidelity falls a bit short is in ease of use. Beginning investors may find it difficult to navigate Fidelity’s online platform. If you are an experienced investor, you may find the minimum balance to open an account at $0 to be a great incentive to use Fidelity’s services.
SogoTrade is a brokerage firm based in New York City, NY. Founded in 1986, SogoTrade is a good option for experienced traders who require additional research tools and more advanced reports. This brokerage is a good choice for frequent traders who are looking for a fast platform with low costs that includes tools designed for day traders. Also, SogoTrade requires no minimum balance to open an account.
Firstrade brokerage company offers 10,000 mutual funds, stocks, options, and no-fee IRAs, and requires no minimum account balance for investors. Self-executed trades cost $6.95 for stocks and $6.95 plus 75 cents per contract. Alongside its clean, easily navigated dashboard, these features make Firstrade a great choice for independent investors. But broker-assisted trades cost a pricey $26.95 each. On the plus side, Firstrade offers no minimum balance to open an account if you are fine with the price tag for broker-assisted trades.
If you are a high-level investor who values a professional platform and a broad variety of trading choices, Interactive Brokers is ideal. You have your choice of options, stocks, corporate and municipal bonds, Treasury instruments, Forex, and more. But Interactive Brokers also features a tedious sign-up process that involves waiting for verification codes by snail mail.
Lightspeed Trading offers a variety of accounts, including Roth and traditional IRAs. New investors can practice on a free account, and Lightspeed’s online community offers encouragement and assistance. Lightspeed also offers automated trading and direct access to exchanges. What’s the catch? Users must maintain a minimum account balance of $5,000 to avoid a monthly $25 fee. Customer service is also not the best, and there are no mutual funds offered. Also, there is no mobile platform available.
The $99 monthly charge to use the downloadable TradeStation platform may be a deal breaker for casual investors. And the $5,000 minimum deposit will stop others cold. But for active traders who trade at least 5,000 shares or 50 options contracts per month, all fees are waived. Serious traders will also appreciate TradeStation’s user interface, its knowledgeable online trader community, and its customizable software.
The Platinum Edge program allows investors with more than $50,000 in assets either with Bank of America or Merrill Edge to receive 30 free trades each month. Merrill Edge is also dramatically increasing the number of traders on staff, from 1,500 to 2,000. The online platform is fast and feature-packed, and its mobile app enables multi-leg options trading. If you already hold a Bank of America bank account, a brokerage account is a logical addition.
FAQ on Brokerage firms and stock trading companies
Is day trading illegal?
While day trading is neither illegal nor is it unethical, it can be highly risky. Most individual investors do not have the wealth, the time, or the temperament to make money and to 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 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.
Looking for more investment advice? Compare the pros and cons of other investment platforms here, or read reviews of brokerages here. Or if you need more personalized guidance, consider an investment advisor.
Audrey Henderson is a Chicagoland-based writer and researcher. She holds advanced degrees in sociology and law from Northwestern University. Her writing specialties are sustainable development in the built environment, policy related to arts and popular culture, socially and ecologically responsible travel, civic tech and personal finance.