Are you looking for the best online brokers for stock trading and don’t know where to start? There are many different discount brokerages offering their own online stock trading platforms, and each specialize in a different area. Through our experience in the industry, we’ve been able to see where each brokerage firm excels. If you need the best online brokerage for stock trading, this post will help you find a trading account with low fees, a solid platform, a variety of trading tools, and comprehensive access to stock research.
Best Online Brokerage Accounts
Here are some of the top online brokerage accounts categorized by what they specialize in:
- Scottrade – best online broker for support, service and research
- Etrade – best full-service discount brokerage
- TD Ameritrade – best brokerage for commission-free ETFs
How To Choose The Best Online Stock Broker
Like mentioned previously, there are many online brokerages you can use. We cover many of the best discount brokers here on the site. There’s one small thing – the best discount brokerage is a bit of a misnomer.
You need to find what works best for your needs. That will likely be different from what I choose and vice-versa. That being said, there are a few standards you need to look for when choosing a discount broker:
- An easy to use platform. This is a bit relative, but you want to choose a broker that has a platform you can easily use. If the platform is cumbersome or difficult to understand that will hinder your experience.
- Low on the fees. The last thing you want is a broker that nickels and dimes you on fees. Additionally, you don’t want to pay more for trades than you should have to. Yes, they need to make money, but it shouldn’t be over the top.
- Basic research is available. Regardless of your investing knowledge, you need to have access to a certain amount of research and charting. If the broker doesn’t offer basic research, you may want to look elsewhere.
In short, the best online broker for you is one that meets your needs. There are dozens of discount brokerages in the space so you want to make sure it’s one that will fit your needs. Don’t just fall for their sales tactics or promise of low prices. Take the time to research which will work best for you then pull the trigger. You’ll be glad you took the time. With that, let’s move on to the best online brokers for stock trading.
Analysis of the Best Online Brokers
If low-cost is important to you, TradeKing wins hands down versus its competition. At $4.95 per stock trade, TradeKing is the cheapest brokerage in the space – alongside OptionsHouse and Motif Investing. If you like to trade options, TradeKing adds an extremely competitive $.65 to that $4.95 commission.
TradeKing’s bread and butter are active traders, thus the low pricing. Where OptionsHouse is rather disappointing in their offerings, TradeKing brings solid value for the price you pay.
TradeKing doesn’t just serve those who are active traders. They also provide great value for more long-term investors. TradeKing charges $9.95 for mutual fund trades, which is one of the best in the industry. TradeKing also offers has a robo-advisor platform, TradeKing Advisors, that can manage your investments for you as you start investing – with a minimum balance of $500.
Why you should pick TradeKing:
- Chosen by Barron’s as having the top trading platform
- Ability to fully customize the trading environment
- No minimum balance requirement to open an account
- Offers over 12,000 mutual funds
- Lowest price in the industry
Why you may want to look elsewhere:
- TradeKing charges an annual inactivity fee of $50. However, if you have over $2,500 in your account or have placed one trade within the past 12 months, the fee is waived.
If you’d like to read more about TradeKing, check out our TradeKing Review.
If you want a lot of support, a wide array of research options and a fair price, Scottrade is the online broker for you. Scottrade has been in the space for over 30 years which allows them to bring a lot of value to the table – all for a competitive $7 per trade commission, with an additional $1.25 if you want to trade options.
Online brokers just aren’t about price. You want to look at what else they have to offer. This is where Scottrade shines. Scottrade offers a full suite of research and educational tools to help new and seasoned investors alike. If you need help, Scottrade has a nationwide branch network of over 500 branches. They can help you open an account or answer any questions.
Scottrade also leads in the mutual fund space, offering access to more than any other brokerage – over 14,000. If you want no-transaction fee funds, they lead in that as well with over 3,100 funds for only $17 per trade.
Why you should pick Scottrade:
- Stellar service, with over 500 local branches
- Competitive pricing at $7 per trade
- Wide range of investment options from international investing options, Treasuries, CDs and more
- Flexible reinvest program for dividends
- No hidden or maintenance fees
Why you may want to look elsewhere:
- Higher minimum balance requirements. It takes a minimum balance of $2,500 to open an account with Scottrade. However, you can open a retirement account with Scottrade for just $500.
If you’d like to read more about Scottrade, check out our Scottrade Review.
Not every discount brokerage is bare bones in their offerings. One such example is E*Trade. E*Trade, like Scottrade, has been in the business for over 30 years, and it shows when it comes to what they have to offer. On the higher end of competitive, Etrade charges $6.95 per stock trade, plus an additional $.75 if you like to trade options. If you like to invest in mutual funds, Etrade charges a very competitive $19.99 fee.
Thanks to their maturity, Etrade offers virtually anything you can think of – from a platform specialized for active traders to managed accounts for those who want assistance with their investments.
Etrade is similar to Scottrade in their maturity, but there are some key differences. Etrade offers over 100 commission-free ETFs plus future and forex trading. Like Scottrade, Etrade also offers access to foreign markets though they also throw in 24/7 customer service – something Scottrade does not offer.
Why you should pick E*TRADE:
- Wide range of investment options from international investing options, Treasuries, CDs, etc.
- Plenty of mutual funds to choose from – over 8,000 with 1,300 of them being no-transaction fee
- Low initial minimums. You need $500 to open an account with Etrade. However, if you want to open a retirement account, there’s no minimum balance requirement.
- 24/7 customer service – that’s not common in the industry
- Extensive research tools from Morningstar and Reuters
- Branch network of over 30 branches nationwide
Why you may want to look elsewhere:
- Higher commission than the competition. Etrade charges $6.95 per trade, which is on the high end of competitive. I’d like to see it lower. You can always negotiate the commission, though Etrade also offers a lower commission if you trade more actively.
If you’d like to read more about Etrade, check out our E*Trade Review.
If you want commission-free ETFs, you need to look no farther than TD Ameritrade. TD was one of the forerunners in the commission-free ETF space years ago and is a great tool for investors who want to take a passive, more lazy approach to their investing.
These funds were chosen in partnership with Morningstar – the premier mutual fund and ETF research site in the space. TD Ameritrade offers just over 100 commission-free ETFs, spanning numerous fund families. One word of warning on the ETFs – you must hold them for at least 30 days. If you sell before the 30- day mark, TD will slap you with a $19.95 fee.
If you aren’t interested in commission-free ETFs, there is still value to investing with TD Ameritrade. They offer many of the same tools and features found at Etrade and Scottrade, though at $9.99 per trade.
Why you should choose TD Ameritrade:
- Over 100 commission-free ETFs to choose from
- Managed accounts for those with over $25,000 to invest
- No minimum balance requirement for retirement or non-retirement accounts
- Extensive platform for active traders through their Thinkorswim offering
- 24/7 customer service
Why you should look elsewhere:
- Like Etrade, TD Ameritrade charges $6.95 per trade which is higher than it should be. TD is known to negotiate lower commissions if you want to give that a shot.
- Technical problems. TD Ameritrade has grown through acquiring other brokerage firms. This allows them to offer stellar tools, but since growth hasn’t been organic, it can tend to lead to technical problems with their site.
If you’d like to read more about TD Ameritrade, check out our TD Ameritrade Review.
Pick The Best Online Broker for Stock Trading
Choosing the best online broker for stock trading is important, especially if you plan to be active with your investments. There are many things to consider in choosing an online broker. There are dozens of brokerages to choose from, so make sure to find one that works for your needs. To recap the best online brokerages for stock trading, see below:
- For low-cost broker that doesn’t sacrifice service or investment options, try TradeKing.
- For an online broker that offers great service, solid value, and extensive research, try Scottrade.
- For an online brokerage that offers a lot of the same tools you’d find at a full-service broker, try Etrade.
- For an online broker that offers a solid stable of commission-free ETFs, try TD Ameritrade.