Are you looking for the best online brokers for stock trading in 2021? We don’t blame you. The right online trading solution can make the difference between growing your wealth and losing your investments, so we’re here to help.
Below you’ll find a list of 15 of the best online brokerage firms in the industry today. While there are no guarantees, these brokers have positive track records regarding user satisfaction, competitive costs, helpful features, and reliability.
To compare these brokers side-by-side, click “Compare Brokerages” below.
15 of the Best Brokerage Firms in the USA
Here are 15 of the best online brokers in 2020, in no particular order. If you have specific questions about online brokers and stock trading, keep scrolling toward the bottom of the article to find answers to frequently asked questions!
TD Ameritrade is an online broker that has decided on $0 minimum deposits and online trades. Many refer to the company as one of the best online brokers for beginning investors as it offers an enjoyable user experience and many educational tools. Join TD Ameritrade to enjoy commission-free stock and ETF trades, amongst other benefits. Plus, manage your accounts on the go by downloading the TD Ameritrade mobile app.
Ally Invest’s Cash Enhanced Managed Portfolios is a first-rate trading platform and one of the best. It features a user-friendly interface with rich data and research tools, available at no charge, which is accessible via a desktop computer or mobile app.
Ally Invest also offers account automation, which makes responsible investments on your behalf, for no annual fee. However, a minimum deposit of $100 is required to open a managed portfolio, and online trades cost $3.95 to $4.95.
Robinhood is an online stock trading brokerage based in Palo Alto, CA.
It offers its users commission-free stock and ETF trades, options, and cryptocurrencies, right from its mobile app. You can also make trades online via the desktop trading platform.
Another plus, Robinhood does not require a minimum deposit to open an account and offers referral incentives in-app. This is one of the overall best online brokers, especially for those new to investing.
The Firstrade brokerage company enables you to invest without meeting a minimum deposit requirement. Further, online trading fees per contract start at $0, and the self-proclaimed discount broker totes no hidden fees. You can choose from a full suite of products from stock and ETF trades to fixed income to over 11,000 mutual funds, making it one of the most attractive brokerage firms. Further, access your accounts on the go using Firstrade’s mobile app.
The respondents of the J.D. Power, Self-Directed Investor Firm Ratings, gave Charles Schwab high marks across the board. The broker reportedly provides great value with services like virtual trading and commission-free account transfers. Again, no minimum initial deposit is required, and online trade commissions start at $0 per contract. New investors also receive a bonus of $100 just for opening an account.
The E-Trade Financial brokerage firm ranks as one of the best 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, making the company a great option for online stock trading. It also has a mobile app on the Google Play Store and the Apple App Store so that you can track your investments on-the-go.
No doubt, E-Trade is one of the best online trading platform options in the U.S. and beyond with a $0 minimum initial investment requirement. Online trades range from $0 to $6.95 per contract.
If you are a high-level investor who values a professional platform and a wide variety of trading choices, Interactive Brokers is going to be one of the best online brokers for you. You have your choice of options, stocks, corporate and municipal bonds, Treasury instruments, Forex, and more. Plus, there is no minimum initial investment requirement.
However, Interactive Brokers also features a tedious sign-up process that involves waiting for verification codes by snail mail, which causes it to lose a few stars from us.
SogoTrade is a brokerage firm based in New York City, NY. Founded in 1986, it’s a good option for experienced, active day traders who require advanced research tools and reports. Another plus, SogoTrade has no minimum balance requirement to open an account. However, online trade fees are higher than $0 per trade.
Fidelity brokerage company ranked especially high in customer support and research, two essential elements for enhancing investor confidence. It also offers good value for investors’ money and a wide variety of product offerings.
One area where Fidelity falls a bit short is in the user experience. Beginning investors may find it difficult to navigate the web trading platform. However, on the upside, there is a $0 account minimum so that you can start with a modest investment.
Despite high marks across the board in the J.D. Power survey, Vanguard brokerage manages to fly under the radar for many investors. But don’t write this online broker off.
Vanguard is a heavy hitter, managing almost $3 trillion in assets. It also administers the world’s largest mutual fund and features the research tools and educational materials you would expect from a top-notch operation. This ranks it up with the best online brokers. Plus, it’s another broker with a $0 minimum initial investment requirement.
The Platinum Merril 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 brokerage 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 here is a logical addition. Plus, the minimum deposit is only $25.
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 may make sense for you. However, the minimum initial investment is $500, which may be preventative for some.
The $99 monthly charge to use the downloadable TradeStation trading platform may be a deal-breaker for casual investors. The $500 minimum initial investment may also be preventative. 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 experience, its knowledgeable online trader community, and its customizable software.
Zacks Trade is a good online brokerage for experienced traders who require additional research tools and more advanced reports. It also has relatively low starting fees for online trades. However, the minimum initial investment is a hefty $2,500.
Lightspeed Trading offers competitive stock and options trading for professional traders, day traders, and trading groups. Highly robust and customizable tech is designed to give traders all the key data they need in real-time. They also boast cheap commission rates and quality customer support.
What’s the catch? Users must make a minimum deposit of $10,000. Further, online trades cost from $2.50 to $6.25 per trade.
FAQ about online brokers and stock trading
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.
Looking for more investment advice?
- Consider an investment advisor if you need personalized guidance.
- Learn 24 secrets to stock investing
- Newbie? Learn the basics of stock market investing
- Check out the best stock trading apps in 2020
Jessica Walrack is a personal finance writer at SuperMoney, The Simple Dollar, Interest.com, Commonbond, Bankrate, NextAdvisor, Guardian, Personalloans.org and many others. She specializes in taking personal finance topics like loans, credit cards, and budgeting, and making them accessible and fun.