Technology has ushered in a new era in the investing world, and it’s never been easier to trade stocks – from wherever you are at virtually no cost. But what’s the best online brokerage for stock trading? This depends on the type of investor you are and the features you need.
Bankrate analyzed the major players to help you find the best online brokers for stocks. Here are our picks.
Here are the best online brokers for stocks in 2021:
- Fidelity Investments
- TD Ameritrade
- Charles Schwab
- Interactive Brokers
- Merrill Edge
What to consider when choosing a broker
The best online stock trading websites offer investor-friendly features and fees traders can easily justify. To come up with this list of options consumers should consider this year, we considered the following factors:
- Price: When it comes to fees, you’re in luck — fees have been dropping swiftly as many online brokers have slashed their trading commissions on stocks and ETFs to $0. For this list of best online trading sites, we considered fees and trading costs to see how they stack up.
- Broker resources: You’ll also want to consider factors like the kind of advice and research tools from the broker, the quality of the digital trading app, and the ability to place trades quickly and reliably, among other details.
- Strategy: The account you really want will ultimately come down to your personal investment strategy — including how frequently you plan to trade and whether you’re a beginner or are more experienced. We considered how each investing platform tailored its offerings to a different type of consumer.
Overview: Top online stock brokers in January 2021
Whether you’re looking for a great trading platform, low commissions or helpful customer support, Fidelity will do right by you. This broker does it all well, and it’s a great investor-friendly pick, especially if you’re just starting out, but works well for advanced investors, too.
Fidelity has a strong reputation for offering some of the best research and tools for investors planning for retirement. The information available on its platform — which includes sophisticated screening tools — makes the account a good option for investors who want to dig in.
Bolstering its reputation further is the fact that Fidelity won the top spot in Investor’s Business Daily’s 2020 investor survey, which polled the people who ought to know best – customers who actually use their services.
Pricing: Along with most of the industry, Fidelity dropped its trading commissions to zero, a boon to all traders, but especially long-term buy-and-hold investors. Fidelity also has zero fees on many other services that other brokers routinely charge for.
Read more in Bankrate’s full review of Fidelity.
TD Ameritrade is a great choice for investors of all abilities, whether you need guidance and education as you’re starting out or when you’re ready to turn to the broker’s high-powered thinkorswim trading platform. Either way, you’ll likely find what you need at TD Ameritrade.
The broker also gives you access to a library of educational content that includes videos, webcasts and thousands of articles. Yes, that may sound a bit overwhelming, but you can select exactly the course you need, whether you’re a novice or an expert looking for a little extra edge.
You can trade a range of securities beyond stocks. Bonds, options, and futures are available, and you can trade cryptocurrency via futures. You can do it all via the broker’s mobile app, too.
Pricing: In October 2019, TD Ameritrade dropped its stock and ETF commissions to zero, and trading options now cost $0.65 per contract, which is standard for the industry. With no account minimums, TD Ameritrade’s an attractive option for beginners.
Read more in Bankrate’s full review of TD Ameritrade.
(Charles Schwab has purchased TD Ameritrade, and will eventually integrate the two brokers.)
Charles Schwab has a long pedigree of helping out individual investors, and that tradition remains firmly intact. The company was ranked by J.D. Power from 2016-18 as “Highest in Investor Satisfaction with Full Service Brokerage Firms, Three Years in a Row.” For the 2020 survey, Schwab ranked top among do-it-yourself investors.
The broker remains a great choice overall – offering great trading tools, excellent customer support, and a wide range of research and educational materials, all with no commission.
Charles Schwab also has an innovative customer service policy that says clients can get refunds on related commissions, a transaction fee, or an advisery program if they feel dissatisfied.
Pricing: Schwab meets the industry standard on stock and ETF commissions – zero – which it helped usher in. Options trades, though, still ring up a $0.65 per-contract fee.
Read more in Bankrate’s full review of Charles Schwab.
Robinhood is a newcomer, but the online brokerage has made a quick splash, developing millions of devoted followers for its commission-free trading and user-friendly mobile app. You’ll get no-fee trading on stocks and ETFs as well as options and cryptocurrencies. It also has a cash management account, so you can make a quick transfer whenever you want to trade.
Robinhood’s research tools are less robust (i.e. almost non-existent) than other brokers’ offerings, though you can join their premium tier, Robinhood Gold, for $5 a month and gain access to some research and margin trading. One downside: Robinhood offers only individual taxable accounts, at least for the moment, though it hopes to expand to joint accounts and IRAs down the road.
Pricing: Not only does the fintech company offer zero-fee stock and ETF trading, it is aggressively striving to disrupt the industry and become a platform that offers all kinds of financial products and services. For example, it also offers free trading for options and cryptocurrency.
Read more in Bankrate’s full review of Robinhood.
E-Trade provides a solid option, regardless of what type of investor you are — passive or active, novice or expert. And it has a great educational section, offering not only a library of educational tools, but a merry-go-round of webinars, news clips and educational videos aimed at investors of all speeds. You can also check in with E-Trade analysts for up-to-date analysis and commentary that can help you craft your trading strategy.
If you’re worried about being left to invest on your own, rest assured that E-Trade also offers 24/7 phone support and an online chat option. Active traders may appreciate the broker’s flagship trading platform, Power E-Trade, which offers tons of tools and comes in a mobile version, too.
Pricing: Like other major brokers, E-Trade now charges zero commissions for stock and ETF trades and $0.65 per options contract. Traders can receive a discounted commission of $0.50 per contract if they make 30 or more trades each quarter.
Read more in Bankrate’s full review of E-Trade.
Interactive Brokers has long been known as a brokerage for professionals and active investors, with a powerful trading platform and good trade execution. But it’s taken strides in recent years to become more attractive to newer investors, in particular with a “lite” version of its service that has no-fee trading. It’s also upped its game on customer support and basic research.
That shift has taken the rougher edges off a formerly no-frills service that even the pros thought was stripped down in favor of low costs and trade execution. A newly designed customer support page is easier to navigate while still providing the old page’s high level of functionality.
Pricing: Interactive Brokers really kicked off the industry’s shift to no fee stock trading. Its Lite service charges no fees, while its Pro service charges a $1 per trade for up to 200 shares, with subsequent shares costing a half-penny each, though volume pricing is also available. Options cost $0.65 per contract, and volume-based pricing is available here too for truly active traders.
Read more in Bankrate’s full review of Interactive Brokers.
Merrill Edge is a full-service broker that offers high-quality tools for traders while still catering to investors looking to get started. That’s especially evident when you consider that the broker has more than 2,000 locations inside parent Bank of America’s branches, making human advisers easily accessible, a particularly valuable feature for newer investors needing a guiding hand.
If you become a preferred client of the broker, you’ll receive access to detailed research reports on individual stocks, but you can receive research from Morningstar and Lipper, too. Merrill also does well with educational materials, helping you plan your financial future. Customer support is available 24 hours a day throughout the week, so someone is always on hand to help you out.
Pricing: Merrill Edge charges no fees for stock and ETF trades, while options trades come in at $0.65 per contract, right in line with most of the industry.
Read more in Bankrate’s full review of Merrill Edge.