Find the Best Online Brokers
Compare Reviews for Top Online Brokers
Read 443 Reviews
Provides a variety of financial services and account types, including managed, brokerage, retirement, small business and bank accounts. Has offices in 17 states and offers $0 commission trades and transparent pricing.
Read 1,018 Reviews
TD Ameritrade is one of America's leading financial companies, and it is based in Omaha, Nebraska. Today, the company offers customers advice about stock trading, investing, retirement planning and more.
Read 241 Reviews
Vanguard is a client-owned investment firm with headquarters in Pennsylvania. It has been in business since 1975. Vanguard offers clients online brokerage services to expand their portfolios while saving for a long-term goal.
Read 623 Reviews
Established in 1946, Fidelity offers many investment products, including online U.S. and international trading. The company is headquartered in Boston and has over 190 branch offices across the country.
|Charles Schwab & Co.|
Read 287 Reviews
Charles Schwab has been in business since 1973. The company offers extensive financial and investing services, including online trading, managed investment and retirement accounts, banking and credit cards.
Read 389 Reviews
Offers investment, wealth management, life insurance, annuity and retirement planning advice. Complimentary initial consultations. Online Security Guarantee covers your losses due to unauthorized activity.
Provides free financial tools and resources online. Matches users with financial advisors that fit their needs. Uses patented Automated Financial Modeling technology. Publishes guides for all major financial topics.
|Ally Invest||Read Author Review|
Ally Invest is an online broker that offers both independent trading and managed accounts with professional brokers. The company prides itself on upfront pricing.
|Interactive Brokers||Read Author Review|
Interactive Brokers, headquartered in Greenwich, Conn., has been in the stock exchange industry since 1977. It offers professional investors and those with moderate experience the ability to trade online or by phone.
|Merrill Edge||Read Author Review|
Merrill Edge is a division of Bank of America that was created in 2010. It gives investors access to resources from both Bank of America and Merrill Lynch and offers brokerage tools and market research.
What should investors consider when choosing an online broker?
When choosing an online broker for trading, consider the look and feel of the website and trading platform. Make sure you’re comfortable using the site before funding your account.
- Demo: Many sites offer a demo version of their trading platform so you can try it out before creating and funding an account.
- Ease of use: Make sure the website is easy to use and that you can find any tools and features that are important to you.
- Speed: There likely won’t be much difference between the speed at which sites can make trades, but any differences that do exist can have significant financial repercussions if prices change quickly. Look for a site that talks about the platform speed.
- Best-execution: Brokers are legally obligated to provide clients with the best price for any particular stock at the moment the purchase is completed. The speed at which a platform operates contributes to the best price, as do the ways the sites place trades. Order execution is less important if you will be placing limited orders, meaning you request to buy or sell a certain number of particular securities when the price reaches your specified point.
When you trade stock online, you generally pay fees in addition to the price of the stock. Fees vary by site and account type. To get the best deal, read website fine print carefully so you’re not surprised by hidden fees.
- Commissions: Commissions are the most common fees associated with trading stocks and other securities online. Brokers usually charge fees per trade, so the more often you trade, the more money you’ll spend.
- Inactivity fee: Some sites charge inactivity fees if you do not trade often enough. There may be a requirement to make a minimum number of commission-based trades every month, quarter or year. If you don’t make the minimum number, you’ll be charged a fee.
- Initial deposit: If you do not want to invest a significant amount of money, you must choose a site that does not require an initial deposit amount. Some companies will let you open an account and begin making trades with only enough in your account to cover the commission and the stock price, while other sites require you to deposit thousands of dollars before you can begin trading.
If you’re new to online trading, look for a broker that will help you learn about the stock market and investing. If you plan to make trades without the assistance of a professional broker, make sure the resources available are designed for investors with your level of knowledge and experience.
- Educational articles: Most frequently, online investment sites provide informative articles. These articles and resources may be very in-depth or relatively basic, and they might use highly technical language or be aimed at novice investors.
- Live webinars: Some sites host live webinars with experts. These sites might be helpful if you want to learn a lot and hear from experts. Webinars are typically free for account holders.
- Local workshops: Brokers with traditional brick-and-mortar locations may host workshops for account holders. Workshops are not held at all locations, so check whether the location nearest you offers this benefit before signing up for an account.
- Instructional videos: Sites with more in-depth educational resources include videos that explain topics, actions and how to use the trading platform. If you’re an auditory learner, look for a site with video resources.
If you plan to make trades without the assistance of a professional broker or with only minimal guidance from one, make sure you have access to reliable investing and market information. Some sites provide this information for free while others charge you to access it.
- Research tools: Many sites have live updates to track stock prices. Having this tool built into your trading platform might help you make decisions more quickly, which could have financial benefits when prices are changing quickly. If you are investing for the long term and aren’t planning to make trades every day based on split-second decisions, you can use Yahoo Finance, Google Finance, MarketWatch or a variety of other finance websites to find the same information for free.
- News: Sites often feature a news section where you can see the latest market news. It may be convenient to see news stories on your trading site, but the same information is available for many other sources. If you don’t plan to visit your trading site daily, this isn’t a feature worth paying for.
- Investing options: Those who want the option to get professional advice should look for a company that offers multiple financial services. These services might include having occasional advising conversations, requesting market research, meeting with a broker to review your portfolio or having a professional take over all the management of your portfolio with a managed account. Fees for all of these services vary by company.
If you have any problems with your account, you’ll need to contact customer service. Choose a company that offers convenient options for getting in touch with representatives.
- Hours: If you plan to make trades after business hours, look for a platform with 24-hour customer service. Regardless of when you’ll want to contact the company, make sure the company’s website clearly lists their hours of operation.
- Contact options: Most companies offer customer support by phone, e-mail and online chats. If you prefer one of these options over the other, try contacting the company with a question before you sign up for an account using that option.
- Fraudulent activity: Some companies offer protection for consumers whose accounts are accessed by unauthorized parties. These brokers will replace the funds or securities stolen as long as you’ve followed all their best practices for security and privacy.
If you’re frequently away from your computer or an Internet connection, choose a broker that allows you to make trades in other ways.
- Phone: Many companies will place trades for you by phone. There may be additional fees for this service, but it can be helpful if you don’t want to wait until you’re at a computer to make a trade.
- Local offices: If the brokerage firm has brick-and-mortar locations, you can often make trades by going to a local branch. This option will be helpful if you’d like to talk to an advisor before making a trade, but that may incur an additional cost.
What are different types of online brokers?
Online trading focused
The Internet made it possible for people to trade from their home computers. Many online brokers went into business to serve specifically those who wanted to trade stock online without going to a financial advisor. Although these companies may have expanded to offer additional services, they remain focused on online stock, options and futures trading.
More traditional brokers and financial firms entered the online trading business to attract new customers. These brokers offer traditional investment options, retirement accounts, managed accounts and more. Those who want to trade securities online can usually get a wide variety of support levels from these firms.
Both brokers who focus on online trading and full-service companies often employ financial advisors to assist customers when necessary. There is usually a fee for working with an advisor. If you plan to work with an advisor extensively, determine whether they are a fiduciary, meaning they are legally bound to work in your best interest.
Brokers that merely provide a platform for online trading are the most basic choice for investors seeking online trading options. These brokers keep their costs down by offering a bare-bones service.
Who should have an online broker?
Those who feel comfortable investing their money on their own should consider an online broker.
Those who do not want to manage their own investments at all can still choose an online broker, especially if they find the Internet brokers’ advising service fees to be cheaper.
Investors who want to be involved in the management of their money and make some of their own choices about which securities to choose will like the flexibility of firms with the option for online trading as well as financial advisors’ services.
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Compare Reviews for Top Online Brokers
|OptionsHouse||Read Author Review|
OptionsHouse by E*TRADE is a site for trading stocks, options and futures online. The Chicago-based company has been in business since 2005 and became affiliated with E*TRADE in 2016. It has tools for all levels of investors.
|OptionsXpress||Read Author Review|
Established in 2000 and now a Charles Schwab company, optionsXpress is an online brokerage company. The company’s platform gives individual investors the ability to trade futures, options and more online.
|Robinhood||Read Author Review|
Robinhood was founded in 2012 with the goal of making online trading more widespread by eliminating trading commissions. The company allows investors to make trades from their smartphone using a simple app.
Information in this guide is general in nature and is intended for informational purposes only; it is not legal, health, investment or tax advice. ConsumerAffairs.com makes no representation as to the accuracy of the information provided and assumes no liability for any damages or loss arising from its use.
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