Best Online Stock Trading Brokerage Firms
When looking for an online stock trading broker, weigh your options when it comes to services, cost, how much guidance you’ll want, and whether you like the platform. Watch out for high investment minimums, high trading fees, and what’s being offered.
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Online investment companies have opened the world of investing to people who might have otherwise felt it wasn’t an option for them. Online stock trading platforms provide convenience, and they help everyday investors save money on the cost of fees while getting a professionally balanced portfolio.
There are a lot of online stock trading brokers available, but they aren’t all the same. Their differences range from fees to the approach used to create portfolios. It can be daunting to choose the online stock trading broker that fits your budget, goals, and preferences. We aim to make that task easier by exploring the details of several of the best online stock trading brokerage firms.
What to Look for in an Online Stock Broker
When you’re choosing an online broker, there are a few things to keep in mind. These include:
- Account minimums. While the barriers to entry are much lower than traditional brokerages, there may still be minimum amounts you have to deposit into your investment account. Most online brokers have minimums of around $1,000
- Commission fees. If you want to pick individual stocks, you might be paying anywhere from $5 to $10 per trade, which can add up to a large expense
- Account fees. Account fees can vary significantly between brokers. For example, brokers may charge annual fees, trading platform fees, or additional fees for broker-assisted trades
- Professional guidance. Some online brokers offer the option to receive professional guidance or advice, others do not
Best Stock Trading Brokerage Firms
Now, here’s a look at what several of the major online trading platforms offer.
Merrill Edge is a trading platform that requires a relatively low initial investment to open an account. Users can link their Merrill Edge investment account to their Bank of America bank accounts to easily manage them with one login. This also makes transferring funds simpler.
Merrill Edge users can choose from stocks, bonds, ETFs, options, mutual funds, and other professionally-managed portfolios.
Some of the options and benefits of the Merrill Edge online broker platform include:
- With an Online Investing and Trading account, a flat rate of $6.95 per trade. Some users may qualify for free trades, and for this account there is no minimum investment. People who opt for the online investing and trading option have access to simple tools, research, and guidance.
- There is also the Merrill Edge Guided Investing option. This is an investment advisory program, and it offers professional portfolio management. The fee is 0.45 percent of assets managed, and the minimum investment is $5,000.
- Merrill Edge provides the option of working with a Financial Solutions Adviser for an annual fee of 0.85 percent.
- Users may get up to $600 when they open and invest in a new qualifying Merrill Edge Account.
- Merrill Edge is often recognized by organizations like J.D. Power and Barron’s for being an excellent online broker.
TD Ameritrade with a history that dates back 40 years, is an online broker that offers a number of free tools, educational courses and webcasts, as well as a wide variety of investment products. Many customers laud its flat-rate commissions.
Some of the benefits of using TD Ameritrade as an online broker include:
- Flat-rate $6.95 commissions on all equity trades
- No trade requirements to access advanced features, and no account opening deposit minimums
- Customer service as well as information and guidance by phone, email, online, and in-person
- Access to the trading platform thinkorswim. This trademarked technology features advanced options like the Social Sentiment feature. Social Sentiment creates graphs based on the social media sentiment of certain stocks to keep traders up to date with quarterly earnings, mergers and other relevant events.
- For certain trading options like mutual funds, there is no commission fee. The broker offers many other free options, such as more than 300 commission-free ETFs
ETrade is a very well-known online broker with a simple, intuitive, user-friendly platform. Users can customize their portfolio and trade experience in numerous ways with ETrade. More than 30 years ago, ETrade executed the first-ever electronic trade made by an individual investor. Now, it has 30 retail branches around the U.S.
Types of accounts available through ETrade include brokerage accounts, retirement accounts, managed portfolios, and small business retirement options.
- The standard pricing for trading stocks, options, and ETFs is $6.95. Currently, customers can get up to $600 and 60 days of commission-free stocks and options trades if they open an account with at least $10,000.
- There are more than 9,000 mutual funds available through ETrade. Of these, more than 4,400 are no-load, and they don’t have a transaction fee.
- For a $25 fee, broker-assisted trades are an option for anyone who wants professional guidance.
- ETrade frequently offers special promotions. For example, customers can take advantage of the Core Portfolios produce and pay no advisory fee for a year. The minimum to start this kind of account is $5,000.
- The ETrade knowledge center is a robust resource with videos and information for users to become financially empowered.
Fidelity offers online trading options as well as mobile trading tools. When customers open a brokerage account with Fidelity, they have access to research and advanced tools. Fidelity also features real-time monitoring tools and users can customize alerts for market news and trade notifications. Users also have the ability to track profit and losses on all of their trades in real-time.
- Fidelity ranks as one of the best online brokerages. Investor’s Business Daily and StockBrokers.com named it the Best Online Broker in 2018. In 2016 and 2017, it was named as the Best Online Broker by Barron’s, Kiplinger, and Investor’s Business Daily.
- Customers have access to free and independent research from more than 20 providers.
- The fee for U.S. equity trades made online is only $4.95. For options trades, it’s $4.95 plus $0.65 per contract.
- Many ETFs and bonds have no fees associated with trading them.
- Fidelity mutual funds also have no fee per trade.
Ally is an online bank and financial institution that offers online trading and automated investing services. Ally offers self-directed trading as well as managed investment products, with generally low commissions.
Ally caters to all experience levels. It offers charting tools and calculators to help investors at any level make sound, data-driven decisions.
- For Ally Invest Managed Portfolios, which feature professional oversight and automated diversified portfolios, the minimum starting investment is only $2,500.
- Self-directed trading is only $4.95 per trade and there is no minimum required to open an account.
- Customers of Ally have 24/7 access to a broker who can answer questions.
- Accounts can be accessed and managed on mobile devices with the Ally Invest app, which is available for iPhone and Android.
- For some mutual funds, there are no commissions.
Online stock brokers are growing. The right fit for you should be driven by your objectives, your experience level, and your budget. Because so many brokers offer excellent services and pricing, your decision could come down to a matter of personal preference for the company or special offers.