Technology has ushered in a new era in the investing world, including the ability to trade stocks from home, in real time, and often for zero commission. But what’s the best online brokerage for stock trading in 2020? This can depend on the type of investor you are, the features you need and how much you’re willing to pay for top notch trading technology.
Bankrate pored over all the features the major stock trading sites offer to help you find the best online stock trading platform for your needs. Here are our picks based on investing style and major benefits.
Here are the best online brokers for stocks in 2020:
- Fidelity – Best for investing research
- TD Ameritrade – Best for beginners
- Charles Schwab – Best for customer service
- Robinhood – Best for digital user experience
- E-Trade – Best for ongoing education
What to consider when choosing a broker
The best online stock trading websites offer consumer-friendly features and fees traders can easily justify. To come up with this list of options consumers should consider for their trades 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 stock and ETF trading 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 August 2020
Fidelity – Best for investing research
Fidelity has a strong reputation for offering some of the best research and tools for consumers planning for retirement, which is part of the reason they have gained so much consumer trust.
Overview: As Bankrate’s in-depth review put it: “Really the resources go on and on, and with the clean layout you’ll have no problems finding what you’re looking for.”
The information available on their platform— which includes sophisticated screening tools, such as dividend screens with payout ratio and ex-dividend dates — makes the account a good option for investors who want to dig in.
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 has a reputation for being investor-friendly and also has zero fees on many other services that other brokers routinely charge for.
Bolstering their 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.
TD Ameritrade – Best for beginners
TD Ameritrade has introduced an interesting lineup of innovations over the last few years, many of which make it ideal for first-time investors who are comfortable with technology.
(As of November 2019, Charles Schwab has agreed to purchase TD Ameritrade, and plans to integrate the two companies once the deal is finalized.)
Overview: The company made a splash by announcing that customers can now ask Alexa-equipped devices to buy and sell stocks in addition to other things they’ve been able to ask for months, such as getting market updates.
A voice command is designed to simplify your life at times when you’re, say, cooking spaghetti and have your hands covered in carbonara sauce — a scenario that would make firing up a mobile app more complicated. Besides that, there are plenty of people who think voice is the future of navigation.
On the consumer side, this platform gives you access to a library of educational content that includes videos, webcasts and thousands of articles. Yes, that sounds a bit overwhelming. But that’s also why TD Ameritrade says its education center curates the most popular content based on the overall viewership numbers.
The company’s Trade Architect platform is also extremely easy to use, making it a popular option for first-time investors who want to get their feet wet.
Pricing: In October 2019, TD Ameritrade dropped its stock and ETF commissions to zero, and options trades cost $0.65 per contract. Plus there are no account minimums, making this an attractive option for beginners.
Charles Schwab – Best for customer service
There’s a reason investing leaders like Warren Buffett continually harp on the importance of assessing investing fees.
Overview: The more fees you pay over the long haul, the more they eat away at your returns. When you pay less to invest your money and let it grow, on the other hand, you keep more of your money in your pocket. That’s why many cost-conscious investors opt to trade with Charles Schwab.
Yet, Charles Schwab won’t make you endure shoddy customer service in exchange for low costs. 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.
Charles Schwab also has an innovative customer service policy that says clients can get refunds on related commissions, a transaction fee, or an advisory program if they feel unsatisfied — something Walt Bettinger, president and CEO of Charles Schwab, said you already expect.
“Today’s consumers expect great value, a great experience and a refund if they aren’t satisfied,” Bettinger said in a press release announcing the guarantee. “We believe a modern investing experience should deliver on these expectations – period.”
Pricing: The company’s online stock trading platform just got a little more interesting, with the broker announcing that it’s cutting commissions to zero on its stock, ETF and options trades, though it will still charge a $0.65 per-contract fee on options.
Robinhood – Best for digital user experience
Robinhood is a newcomer, but the online brokerage has made quite a splash, developing a devoted following for its commission-free trading.
Overview: Robinhood’s mobile app is particularly useful and rewarding for consumers who give it a try. The app itself is sleek and easy to use, and its language is more accessible than others. For example, the app’s help box leads with, “Hey! How can we help?” instead of formal, boring investing speak.
Robinhood’s research tools are less robust than other options, which is part of the reason this platform is more geared to experienced investors. However, there’s also an option to pay for premium services. And regardless, the limited approach helps make the experience feel less overwhelming.
More recently, the company built an independent clearing system to settle and clear transactions. Translation: The digital customer experience should only improve from here.
Pricing: Why should you consider it? Not only does the fintech company offer a zero-fee stock trading app, 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.
Robinhood was founded in 2013, and the company already claims 13 million customers — many of whom are millennials.
E-Trade – Best for ongoing education
Investors who want to become lifelong learners need an online stock trading platform that continually educates them as markets change.
(As of February 2020, Morgan Stanley has agreed to purchase E*Trade, and plans to operate the broker as a separate unit once the deal is finalized.)
Overview: This is one area where E-Trade absolutely shines.
Not only does the platform offer a library of educational tools, but they roll out 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. Their helpful customer service representatives can help you navigate the online platform or answer timely questions.
Pricing: With these benefits in mind, we believe E-Trade is ideal for careful investors who want to keep learning more with each passing year. Like other major brokers, E-Trade has lowered its trading commissions, and 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.
Featured image by JONATHAN WEISS / Shutterstock.